CLWR

Wireless Industry Consolidation Continues

by

According to The Wall Street Journal, Sprint (click ticker for report: ) will acquire spectrum and wireless operations from Midwest-provider US Cellular (USM) for approximately $480 million. Sprint will acquire key markets, including Chicago and St. Louis, and the deal includes approximately 585,000 customers. We don’t see any material impact on our fair value estimate for Sprint. The deal isn’t incredibly material for Sprint, but we think it certainly acquired these assets on the cheap. US Cellular has struggled to maintain market share in large markets due to the competition from larger providers with stronger smartphone offerings. We believe giving existing US Cellular customers the option of the iPhone, as well as other high-end Android phones, will help reduce churn. … Read more

Sprint, Dish, Clearwire, and SoftBank: The Saga Continues

by

Key Takeaways: ·        The entire Sprint/Clearwire/Dish/SoftBank situation is very complicated. ·        We believe SoftBank’s offer makes more sense for Sprint’s near-term future. ·        However, we like the well-rounded package that a combined Sprint/Dish entity would be able to offer consumers over the long haul, and we tend to have faith in skilled managers like Dish’s CEO Ergen. ·        In any case, we think the saga will eventually result in a winner’s curse—whoever wins the battle for Sprint will likely have paid too much! ·        Ideas o       One industry in particular would be highly in favor of SoftBank’s deal with Sprint—the networking equipment makers. If Sprint receives a huge capital infusion from a SoftBank deal, network upgrade spending would accelerate. Cisco (CSCO) is our favorite fundamental idea … Read more