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

March 21st at 4:06pm by Tom Lydon

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.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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