All four Tier 1 wireless operators will either partner, acquire or be acquired by a pay-TV provider, according to Tim Horan, an analyst with Oppenheimer. Specifically, Horan theorizes that either Comcast (NASDAQ: CMCSA) or Charter will purchase T-Mobile US (NYSE:TMUS).
"We see Comcast (with TMUS and partnering with other cable companies), AT&T, Verizon Communications and Sprint the four likely surviving companies," Horan said, according to Investor's Business Daily.
At deadline, Comcast, T-Mobile US and Charter had not responded to requests for comment.
Horan predicted that Comcast is the most likely to pursue a deal with T-Mobile. In June, German publication Manager Magazin, reported that T-Mobile parent Deutsche Telekom was talking to Comcast about a possible deal. However, a source close to Comcast told FierceWireless that report was not accurate. If Comcast doesn't purchase T-Mobile, Horan said that Charter Communications is next in line to acquire the wireless carrier. Charter is currently seeking approval to purchase Time Warner Cable (NYSE: TWC).
Horan is less bullish on the likelihood of Dish Network (NASDAQ: DISH) purchasing T-Mobile, giving that acquisition only a 10 percent chance. However, in June The Wall Street Journal reported that Dish and T-Mobile were talking about a mostly stock deal that would leave Deutsche Telekom with a minority stake in the combined company.
Earlier this month, The Wall Street Journal also reported that Sprint (NYSE: S) parent SoftBank floated the possibility of selling Sprint to both Comcast and European telecom firm Altice. The efforts never went anywhere and SoftBank CEO and Sprint Chairman Masayoshi Son has said he's deeply committed to Sprint.
AT&T's recent acquisition of DirecTV could be the impetus behind this predicted consolidation. AT&T announced new bundling plans, which some believe could force Comcast to get into the wireless business.
Specifically, the company combined an AT&T wireless plan including up to four handsets and 10 GB a month of shared data with DirecTV satellite service, with DVR integration in up to four rooms. The offer starts at $200 for a plan that includes DirecTV's "Select" bundle, which includes around 145 channels and no ESPN.
"Regardless, of the timing, we expect all four wireless carriers to align with a paid TV provider in some form," wrote Horan, according to Investor's Business Daily.
- see this Investor's Business Daily article
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