AT&T Inc (NYSE:T): Moving Ahead in “Leaps” and Bounds

Posted On 15 Jul 2013

Denver, CO, 07/15/2013 (Avauncer.com) – AT&T Inc (NYSE:T) is the second largest wireless carrier in the United States. It has agreed to acquire Leap Wireless International for an amount of $1.2B. With this one move, 5 million users get added to its customer base. It gets more airwaves and a bigger chunk of the prepaid market or “use-as-you-pay” as well. Under this deal, the Leap Wireless shareholders will also receive the rights to proceeds from the company’s sale of the 700-megahertz Chicago spectrum. According to the statement, this had been bought last year. This offer of $15/ in cash represents a premium of 88% over yesterday’s $7.98 closing price. The company also has a net debt $2.8 billion.

Alternative solutions

Randall Stephenson, the Chief Executive Officer of AT&T has been on the lookout for spectrum. These are airwaves that permit mobile devices to download data and make calls. This hunt has been on ever since U.S regulators blocked the company’s proposal to acquire Deutsche Telekom’s T-Mobile USA unit for $39B, in 2011. Since that time, Stephenson stuck to smaller acquisitions, like the Verizon Wireless airwaves acquisition worth $1.9B, in January. All these are efforts to expand the company’s capacity to handle the increase in the demand for video streaming and music downloads on mobile devices.

The wireless mergers

Today, data pricing is getting very competitive and the tablets and smartphones are in every hand. This also makes spectrum more valuable as the speed and the quality of a service depend on it. The AT&T Inc (NYSE:T) offer definitely holds a great deal of value as Leap shares more than doubled in yesterday’s extended trading. There is also a possibility of a competing bid making an appearance on the scene. The wireless landscape has seen a large number of changes taking place over the past few months.

Softbank made a soft entry on the scene while Clearwire and Sprint merged. Competition sure seems to be getting tougher now and AT&T’s adversaries are gaining muscle. But AT&T is not letting up. It is moving ahead quietly and making waves. Staying ahead of the wireless game is about merging, acquiring, expanding and emerging as winners.

About the Author

Neha Gupta has completed her CFA Level 2 and has also her PGDBA, and has good analytical abilities. Getting into the intricacies of the stock information, delving into the company’s financial statements is my passion and have a great deal of understanding of Economy their impact on the Market and individual stocks.