T-Mobile US Inc. is the likeliest acquisition target as media companies seek a wireless partner following AT&T Inc.’s proposed $85.4 billion takeover of Time Warner Inc., analysts tell Reuters.
AT&T announced the deal late Saturday, stoking urgency in the telecommunications and media sectors, where carriers facing a saturated wireless market are looking for content to attract mobile users and producers of shows and movies are seeking digital distribution.
T-Mobile took most of the wireless industry’s subscriber and revenue growth in the third quarter. Its strong balance sheet and fast-growing wireless business makes it an attractive target for a pay-TV or media company, analysts say.
T-Mobile shares jumped 9.5% on Monday after it announced third-quarter financial results. At least nine analysts raised their target price on the No. 3 wireless company, which said it added 851,000 postpaid subscribers in the quarter.
T-Mobile has taken market share from bigger rivals Verizon and AT&T, and that momentum is expected to continue, analysts say.
“The takeout target over the next 12 months has got to be T-Mobile,” says New Street Research analyst Spencer Kurn. Potential buyers include Comcast Corp, satellite-TV provider Dish Network Corp., and Mexican telecommunication company America Movil, analysts say.
“Content of all kind is rapidly landing on the internet, and the internet itself is rapidly transforming toward mobile,” T-Mobile Chief Operating Officer Mike Sievert tells Reuters. T-Mobile is “very interested” in exploring strategic opportunities, he says.
