A Sneak Peak at T-Mobile in 2014

This past year has been quite an interesting one for T-Mobile (NYSE: TMUS  ) investors. The company completed its merger with MetroPCS, branded itself as the uncarrier, had a massive rollout of its LTE network, launched a second stock offering -- and increased its stock price by about one-third to boot.

Though it's always nice to look at a company's year in review, it's more important for investors to keep an eye on what's coming ahead.


Source: T-Mobile.

Takeover rumors
Over the past week rumors have surfaced that Sprint (NYSE: S  ) may want to make a bid for T-Mobile. The Wall Street Journal reported Sprint may be interested in the company, but that no talks have begun. Sprint is likely a little cautious to pursue any consolidation in the wireless-carrier space, considering the Justice Department struck down an AT&T bid for T-Mobile back in 2011. The government isn't too keen on seeing fewer wireless carriers and even said back in April that four major carriers is the right amount of carrier choices for consumers.

But that doesn't mean 2014 couldn't bring a bid for T-Mobile from Sprint or DISH Network (NASDAQ: DISH  ) . DISH's chairman, Charlie Ergen, has been very public about the company's interest in T-Mobile, but so far nothing has materialized. The satellite provider tried unsuccessfully to buy Sprint eariler this year, and is still very much interested in the wireless-carrier space. With T-Mobile increasing its subscriber base and LTE network, the company must look like an even stronger potential buyout than before. T-Mobile itself has said more consolidation in the carrier space would be a good thing, which makes it seem like it'd be more likely to make a deal with Sprint, but going into 2014 it seems that everything is wide open.

Source: T-Mobile.

Expanding coverage into 2014
Though takeover speculation looms, T-Mobile continues to build out its 4G LTE network and has more plans to do so in 2014. The company currently covers about 205 million people and will hit between 225 and 230 million next year. The company recently told FierceWireless that though nothing has been officially announced, "We will expand LTE over time, and as we have clearly demonstrated already, we will execute quickly."

Though T-Mobile's LTE ambitions won't likely be as aggressive in 2014 as they were this year, the company will probably buy more spectrum to beef up its current spectrum portfolio. The company is rumored to be in talks with Verizon Communications to buy some of its spectrum, though nothing has materialized just yet.

Looking ahead
Aside from any news of Sprint or DISH moving in on T-Mobile, one thing to watch in 2014 is the company's average revenue per user, or ARPU. In the third quarter of 2013, the ARPU was at $52.50, down from $57.35 year over year. T-Mobile has said that number should level off in the second part of 2014, and with the company's fiscal Q4 earnings report due in February, investors will be able to see how that starts to play out. For now, investors should be pleased with T-Mobile's turnaround this past year and its 37.5% stock price growth year to date.

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