Sprint and Verizon Won’t Have to Deal with Bigger AT&T

It appears as if AT&T’s (NYSE:T) acquisition of T Mobile is becoming a long shot — great news for competitors Sprint (NYSE:S) and Verizon (NYSE:VZ). Early yesterday morning AT&T and Deutsch Telekom, T Mobile’s parent company, issued a statement withdrawing their FCC filing for merger approval. While both companies said that they are still pursuing the deal and preparing to fight the antitrust lawsuit road block, AT&T also said that it had set aside $4 billion in the fourth quarter to cover fees that would be assessed if the deal collapses.

The merger has largely been squelched by antitrust issues. Julius Genachowski, the FCC chairman, recently ruled that the deal did not meet requirements for FCC approval and referred the case to an administrative law judge. The deal was set to go to trial on February 13th. The NY Times reports that the application withdrawal could primarily be meant to prevent AT&T (NYSE:T) and T Mobile records regarding the potential effects of the deal from being released. AT&T has publicly said that the merger would create jobs and not diminish competition in the cellular market, but the Department of Justice says that AT&T’s company records paint a different story.

Deutsch Telekom has been vocal about its desire with leave the US cellular market while AT&T (NYSE:T) has been looking to grow its network in order to remain competitive. The withdrawal of their merger application may mean that both companies will have to look at alternative deals to achieve their goals. The New York Times quoted Gigi B. Sohn, president of Public Knowledge, a consumer group, who said, “The chances that AT&T will take over T-Mobile are almost gone. While you can never count out AT&T entirely, the fact that they pulled their F.C.C. application speaks volumes about the company’s lack of confidence” in getting approval.

Here’s how top telecoms are trading on the news:

  • AT&T, Inc. (NYSE:T): T shares recently traded at $27.94, up $0.53, or 1.93%. Its market capitalization is $165.57 billion. They have traded in a 52-week range of $27.20 to $31.94. Volume today was 1,143,937 shares versus a 3-month average volume of 30,473,100 shares. The company’s trailing P/E is 14.18, while trailing earnings are $1.97 per share. The company pays a dividend of $1.72 per share for a dividend yield of 6.30%. About the company: AT&T Inc. is a communications holding company. The Company, through its subsidiaries and affiliates, provides local and long-distance phone service, wireless and data communications, Internet access and messaging, IP-based and satellite television, security services, telecommunications equipment, and directory advertising and publishing. Get the most recent company news and stock data here >>
  • Sprint Nextel Corp. (NYSE:S): S shares recently traded at $2.50, up $0.12, or 5.04%. Its market capitalization is $7.49 billion. They have traded in a 52-week range of $2.10 to $6.45. Volume today was 3,713,409 shares versus a 3-month average volume of 65,524,600 shares. The company’s trailing earnings are $-0.84 per share. About the company: Sprint Nextel Corporation offers a range of wireless and wireline communications services to consumer, business, and government customers. The Company develops, engineers, and deploys various technologies, including two wireless networks offering mobile data services, instant national and international push-to-talk capabilities, and a global Tier 1 Internet backbone. Get the most recent company news and stock data here >>
  • Verizon Communications Inc. (NYSE:VZ): VZ shares recently traded at $36.16, up $0.81, or 2.29%. Its market capitalization is $102.37 billion. They have traded in a 52-week range of $31.60 to $38.95. Volume today was 748,051 shares versus a 3-month average volume of 16,006,000 shares. The company’s trailing P/E is 14.54, while trailing earnings are $2.49 per share. The company pays a dividend of $2.00 per share for a dividend yield of 5.70%. About the company: Verizon Communications Inc. is an integrated telecommunications company that provides wire line voice and data services, wireless services, Internet services, and published directory information. The Company also provides network services for the federal government including business phone lines, data services, telecommunications equipment and payphones. Get the most recent company news and stock data here >>

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