Will other operators succumb to private equity buyouts?

 

Will other operators succumb to private equity buyouts?
The announcement earlier this week that Alltel agreed to be acquired by private equity firms TPG Capital and GS Capital Partners for $27.5 billion has left many in the industry speculating about whether we will see other operators follow this same path.

I had a couple conversations this week with analysts who speculated that Sprint may be the next target. Although the company is significantly larger and pricier than Alltel--it has a market cap of close to $62 billion--some believe that this may be exactly the solution that Sprint needs to overcome the difficulties it has had integrating with Nextel. Plus, the firm has some very enticing network and spectrum assets.

Some of the smaller Tier 2 operators such as U.S. Cellular and Dobson Communications may also be choice pickings for equity firms. These carriers have also been named as potential merger targets for Tier 1 operators looking to expand their footprint and increase their sub base. 

Of course whenever there's a merger or buyout in the wireless operator space, it triggers rumors and speculation about which carrier will be the next to fall. I understand that these changes are a natural evolution for a maturing industry but it makes me a bit nostalgic for the early days of wireless. Remember when wireless operators were mom-and-pop shops and not billion-dollar corporations? -Sue

P.S. FierceWireless is taking Monday off in honor of the Memorial Day holiday. We'll return on Tuesday, May 29.  Have a great weekend!

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