AT&T Buying T-Mobile; Telecom ETFs Deserve a Look

The latest telecom news has investors’ eyes on related shares and exchange traded funds (ETFs). AT&T (NYSE: T) announced it will buy T-Mobile USA from Deutsche Telekom in a deal valued at $39 billion that would make it the largest cellphone company in the U.S.

The deal would reduce the number of wireless carriers with national coverage from four to three, and removes a potential partner for Sprint Nextel Corp.(NYSE: S), the struggling No. 3 carrier, which had been in talks to combine with T-Mobile USA, reports the Associated Press on Yahoo Finance. [Will Verizon’s iPhone Matter To Thee ETFs?]

AT&T is now the country’s second-largest wireless carrier and T-Mobile USA is the fourth largest. The acquisition would give AT&T 129 million subscribers, vaulting it past Verizon Wireless’ 102 million. The combined company would serve about 43%  of U.S. cell phones. [Telecom ETFs: The Wireless Frontier Is Set In Africa.]

The acquisition will take at least a year or longer to complete, and for now, nothing changes for T-Mobil’s customers.

The two largest Telecom ETFs are:

  • iShares Dow Jones US Telecom (NYSEArca: IYZ) AT&T 15.3%;
  • Vanguard Telecommunications (NYSEARca: VOX) AT&T 22.3%

For more information on telecommunications, visit our telecommunications sections.

Tisha Guerrero contributed to this article.

Post Comment