T-Mobile (TMUS) Stock Dropped on Low Band Spectrum Competition

NEW YORK ( TheStreet) -- Shares of T-Mobile US   ( TMUS) closed down 1.19% to $39.03 as it seeks to thwart AT&T  ( T)'s attempt to buy spectrum, Zacks Equity Research reports.

T-Mobile, the fourth largest national telecom operator in the U.S., is constantly building pressure on larger peers like AT&T and Verizon Communications (VZ) with respect to wireless spectrum procurement, Zacks Equity Research said.

T-Mobile has asked the Federal Communications Commission to block the purchase of low-band spectrum by AT&T from East Kentucky Network through a secondary market transaction.

T-Mobile US argued that the purchase of low-band spectrum is not in tune with the FCC's stated policy of public interest. The deal will have serious anticompetitive consequences with the increasing concentration of below-1-GHz spectrum in the hands of AT&T, analysts at Zacks added.

Meanwhile, AT&T has denied the allegation and stated that the said spectrum is at present fallow and unused and therefore will not affect the competitive spirit in any way.

This is not the first time that T-Mobile has raised questions regarding spectrum purchase by AT&T and Verizon. The FCC is likely conduct a low-band airwaves auction called "incentive auction," according to the analyst note.

Separately, TheStreet Ratings team rates T-MOBILE US INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate T-MOBILE US INC (TMUS) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

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