T-Mobile MetroPCS Communications Inc (PCS) Deal: The Dawn is Yet to Break – Verizon Communications Inc. (VZ), AT&T Inc. (T)

So where does the combined entity stand?

Taking on Verizon Communications Inc. (NYSE:VZ)or AT&T Inc. (NYSE:T) now, or even in the near future, would be a mammoth task for the merged entity. However, overtaking Sprint would be easier. T-Mobile and MetroPCS Communications Inc (NYSE:PCS) together account for around 42.3 million customers against Sprint’s 55.6 million, which is not much of a difference considering the huge subscriber base difference with the top two biggies. With greater spectrum capacity and a solid network infrastructure, along with correct planning, the new entity could give Sprint tough competition for the third spot.

However, the fact that the Kansas-based carrier is awaiting its deal with Japan’s Softbank cannot be disregarded. Softbank would back Sprint with its big pockets and serve its financial requirement. In addition to this, Sprint has also struck a deal with spectrum rich Clearwire Corporation (NASDAQ:CLWR) to augment its spectrum holding, and possesses sufficient spectrum for its network overhaul.

To complicate the situation, DISH Network Corp. (NASDAQ:DISH) made a premium counter-bid for Clearwire, but Sprint still stands a stronger chance. Clearwire is facing opposition from unhappy investors who are against Sprint’s $2.97 per share proposal which, they believe, undermines the company’s spectrum asset. However, the company has recommended its shareholders to accept Sprint’s deal. If both the Softbank and Clearwire deals work out for Sprint, the company would emerge as a tough contender for T-Mobile.

Looking ahead

The U.S. mobile broadband service market is witnessing several interesting turn of events. While Sprint is working hard to challenge the top two, T-Mobile is paving its path to combat Sprint and overtake it to fight Verizon Communications Inc. (NYSE:VZ) and AT&T Inc. (NYSE:T). The wireless industry is strengthening with stronger competitors in the making. It would be interesting to watch how the telecom sector carriers are positioned in the market some years down the line.

The article T-Mobile MetroPCS Deal: The Dawn is Yet to Break originally appeared on Fool.com.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.