AT&T's (NYSE: T) proposed $39 billion buyout of T-Mobile from Deutsche Telekom (XETRA: DTE.DE) could force Sprint (NYSE: S) to finally merge with Clearwire (Nasdaq: CLWR), a pair of analysts suggest. The pair stopped short of also suggesting that Clearwire's cable partners, now faced with a bigger AT&T and an endangered Sprint, could also revisit their recent wireless strategy statements.
Clearwire has seen steady erosion in the financial support it's receiving from cable partners Comcast (Nasdaq: CMCSA), Time Warner Cable (NYSE: TWC-WI) and Bright House Networks and had been, according to multiple sources, counting on a deal with T-Mobile to keep itself afloat. With that deal apparently off the table "funding concerns will increase for Sprint (Clearwire's majority owner) and Clearwire and this will pressure shares/debt of Sprint," David Dixon, an analyst with FBR Capital Markets wrote to his clients.
Jeffries analyst Peter Misek apparently agreed, noting that the merger would give Sprint the best way to amp up its nationwide 4G rollout even though he thinks Sprint prefers LTE to Clearwire's WiMAX, "but Sprint would still like to leverage whatever value can be found in Clearwire."
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