With the Justice Department having filed suit to block the proposed AT&T purchase of T-Mobile, which AT&T chief Randall Stephenson said this week is all about the spectrum, what is T-Mobile's plan if the deal falls through?
Bernstein Research senior analysts Robin Bienenstock and Craig Moffett say the most likely scenario is not a Sprint merger -- he thinks Justice's lawsuit signals that meld would also be unlikely to pass muster -- but a spectrum deal with cable operators Comcast and Time Warner.
In a weekend media blast, the pair said that "the DOJ's complaint appears very clearly aimed at prohibiting not just a combination with AT&T, but one with Sprint as well." Instead, they say, with T-Mobile likely to run into spectrum issues, and FCC spectrum auctions at least three or four years out, "a deal with Comcast and Time Warner Cable for spectrum therefore looks appealing, and is very likely the principal Plan B. Or, if you will, the new Plan A."
They point out that the cable ops together won 20 MHz of AWS spectrum in the 2006 auction (as part of the SpectrumCo. joint venture). "As it happens, this is the very same band that is already held by T-Mobile, so it would drop neatly and easily onto T-Mobile's existing towers, the placement of which is already optimized for propagation at this frequency."
In addition to having that 4G service to add to their bundles, the analysts say, the cable ops could provide backhaul or long-haul transport to boost the bottom line.
They argue that teaming up with T-Mobile is a more likely path to 4G service for the cable industry than cable's Clearwire wireless venture -- Comcast, Time Warner Cable and Bright House Networks.
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