AT&T kicked off Monday morning with a webcast that outlined the details of the T-Mobile acquisition. While these two wireless carriers were riding a wave of positive news, Sprint was experiencing a slight downturn. Of the major wireless carriers in the U.S., the nation’s third largest wireless carrier stands to lose the most from a merger between Magenta and Ma Bell.
The carrier will fall far behind its rival Verizon and AT&T in terms of subscriber numbers and it will lose a lucrative source of new customers. T-Mobile had a high churn rate and many of those customers who fled Magenta often landed at Sprint. The #3 wireless carrier will also have to shoulder the burden of rescuing Clearwire from the brink of collapse without the potential sale of spectrum resources to T-Mobile.
In response to this news, some analysts like Craig Moffett Bernstein Research downgraded Sprint’s stock from market perform to underperform and cut its stock estimate from $5 to $3. “A Sprint deal is now off the table, and Sprint is left to go it alone,” said Moffet. This downgrade and the AT&T/T-Mobile news had a ripple effect that caused the company’s stock to fall over 13% at market closing. It is now trading at $4.36.