T-Mobile US Inc (NYSE:TMUS) will continue being a low-cost carrier for the foreseeable future, John Butler of Bloomberg Intelligence said in a discussion on “Bloomberg West”.
The discussion about T-Mobile US Inc (NYSE:TMUS) comes as the team also discussed Deutsche Telekom AG’s recent admission that it is still interested in divesting its ownership of the U.S. wireless carrier.
“They are out there as the low-cost provider and I don’t see that changing. They really have stuck to their guns in terms of branding themselves as the ‘consumer-friendly carrier’ out there really using price as the key weapon and for good reason. If you look at telecoms, wireless and wireline, it’s a commodity service,” Butler said.
He added that he thinks T-Mobile US Inc (NYSE:TMUS) CEO John Legere has taken the right tactic and that he sees this tactic continuing for the carrier in the future.
Meanwhile, Butler also noted that Deutsche Telekom AG has expressed their interest in selling their stake in T-Mobile US Inc for years. He said that the prospect of acquiring the carrier is attractive to other telecommunications company in the U.S. because the market in the country cannot support four big carriers.
The current dominant players in the U.S. telecoms industry are AT&T Inc. (NYSE:T), Verizon Communications Inc. (NYSE:VZ), Sprint Corporation (NYSE:S) and T-Mobile US Inc (NYSE:TMUS).
However, the team also noted at a later part of the interview that unless views change in the U.S. government, there will continue to be four major carriers in the country as the government is opposed to consolidating the companies to fewer organizations.
Bloomberg’s Cory Johnson said that the possible companies which may buy the stake Deutsche Telekom AG is interested in selling may only be companies in different industries that are parallel to T-Mobile US Inc’s line of business.
However, in Johnson’s view, Iliad SA will not be able to acquire T-Mobile US Inc because the French company cannot raise enough capital to acquire the U.S. carrier. Butler noted that the most probable candidate to acquire T-Mobile US Inc at the moment is DISH Network Corp (NASDAQ:DISH).
Watch the team discuss other issues such as how John Legere has successfully branded T-Mobile US Inc in the video below.
John Paulson’s Paulson & Co is an investor in T-Mobile US Inc (NYSE:TMUS). The hedge fund reported about 13.16 million shares in the carrier by the end of the first half of the year.
Disclosure: None
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