Sprint Nextel Corporation (S)’s Acquisition Triangle: A Stronger Future Together?

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This deal is expected to benefit the public at large, with the customers ending up with a faster and richer 4G LTE service. It would also increase the usage of mobile broadband services and further boost competition. However, SoftBank faced a debt rating downgrade by Standard & Poor’s by two notches to junk grade, due to the associated financial risks from the purchase of Sprint Nextel Corporation (NYSE:S), and Sprint’s projected takeover of Clearwire.

AT&T & Verizon expanding LTE networks: plenty more to come

In late June, AT&T declared that the company will start off selling customers’ smart phone data to the highest bidder, coming at par with Verizon, Facebook and others that utilize consumer records for their marketing needs. The online customer response has been tremendously negative, with many customers searching for ways to evade these new conditions.

On 2nd July, AT&T launched its 4G LTE service in New Iberia, Silverthorne, Grand Junction, Palatka, Homosassa Springs and Corinth-New Albany, bringing customers the latest generation technology of wireless network. Yesterday, it also launched its 4G LTE services in Wichita Falls. LTE technology is capable of delivering speeds faster than many other mobile Internet technologies. The geographical expansion was also aimed at increasing AT&T’s market presence.

Recently, Verizon conducted network improvements on the islands of Hawaii and Kauai. This has enabled customers to make more calls, download more applications and surf the internet at a faster pace. Verizon Wireless also provided new 4G LTE coverage on 17 sites in the Albany and Glens Falls, NY areas, including a newly built site in Bethlehem, increasing its coverage on high speed data network. Overall, the company has started off more than 350 4G LTE sites in New York during FY13.

Conclusion

The recent acquisitions and the future planned launches provide Sprint’s investors an attractive opportunity to participate in the future growth of a stronger, better equipped Sprint Nextel Corporation (NYSE:S), in the years to come. With the recent acquisitions, Sprint is now in a position to better serve its consumers, challenge the market share leaders and steer innovation in the U.S. economy. I would recommend buying the stock of Sprint and holding it for the next few years to earn a high return. The company is currently restricted from paying dividends by the covenants of the revolving bank credit facility.

With the speedy geographical expansion that AT&T is currently undertaking, the revenues and profits of the company are likely to rise in the forthcoming years. I recommend it for investors looking for regular income along with price return. AT&T is expected to increase its dividends by 2.3% in 2013.

Awais Iqbal has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Awais is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Sprint’s Acquisition Triangle: A Stronger Future Together? originally appeared on Fool.com and is written by Awais Iqbal.

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