Alltel (AT): Sprint (S) Is Not Next
Bank Raymond James believes that now that Alltel (AT) has been sold to private equity interests, Sprint (S) will be next. Not a chance. There are several reasons that the ownership at Sprint is not going anywhere. MarketWatch mentioned one:…
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Bank Raymond James believes that now that Alltel (AT) has been sold to private equity interests, Sprint (S) will be next. Not a chance.
There are several reasons that the ownership at Sprint is not going anywhere. MarketWatch mentioned one: "Alltel can now spend more money on spectrum and thus put added pressure on rivals such as Sprint and T-Mobile" Another is that Sprint is losing ground to Verizon Wireless (VZ)(VOD) and AT&T Wireless (T) as the two larger companies pick up subscriber market share. A new owner would have to assume that it could arrest that slide, which is far from a sure thing.
But, the most compelling reasons for private equity to stay out of Sprint’s stock is its big bet on WiMax. Sprint is spending $3 billion with partners including Motorola (MOT), Intel (INTC), and Samsung to build a WiMax network that will reach 100 million potential customers in the US. Sprint’s next-generation broadband wireless will use this standard instead of more widely accepted 3G technology.
A buyer would have to get in the middle of one of the largest wireless bets in history, which is that WiMax, a fairly new technology, can work across a vast geography. While the plan may pay-off, it is too late to reverse the decision and too early to tell if it will reap large returns.
Sprint’s stock rose 4% on the Alltel buy-out news. But, Alltel is not putting all of its eggs in one basket.
Douglas A. McIntyre
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Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.