While T-Mobile (NASDAQ:TMUS) waits for federal regulators to rule on its $26.5 billion merger with Sprint (NYSE:S), it's not simply biding its time. The company has rolled out a new cable service and introduced a banking service. That leaves the company in a very strong position even if the merger gets shot down.
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This video was recorded on April 23, 2019.
Shannon Jones: For T-Mobile, they've added more than a million customers now for I believe it's 23 consecutive quarters, which is pretty impressive. And let's not forget, T-Mobile is also planning to roll out a TV service. This merger with Sprint greatly expands that base as well. For T-Mobile, there's so much good happening right now.
Dan Kline: T-Mobile this week unveiled a banking service, which will help people that don't have a checking account not only get easy access to banking, but have a certain level of overdraft protection, no minimum balances, no fees. I've been underwhelmed by their cable offering, but I think that will change when 5G rolls out and it becomes something you use over your phone rather than what we've seen so far as the at-home version, which really looks a lot like cable. But T-Mobile is a company that's constantly trying to find new ways to make consumers happy. AT&T and Verizon... I'll put this nicely, it doesn't feel like that is baked into their DNA.
Jones: [laughs] Very good point, Dan! Totally agree. To close out this segment, where would you put the likelihood of this deal closing? Would you say it's a 50-50 shot at this point? Where are you at?
Kline: I think T-Mobile will make whatever reasonable concessions need to be made to make this deal. If the federal regulators who are looking at it want price guarantees, or a speed of 5G rollout guarantee, or whatever it is, I think T-Mobile is going to be very willing to do that. If they're stuck on the idea that there needs to be four companies, then I think what's going to happen is Sprint will make the merger happen the backdoor of going out of business, and maybe T-Mobile can acquire some of its assets. I think T-Mobile would acquire the vast majority of its customers organically -- which is, frankly, why I have some questions as to the value of this merger for T-Mobile in the first place.
Jones: Yeah, very good point. A lot to watch here in the coming months.