Leap Wireless will eventually be sold to Sprint Nextel, T-Mobile...

MetroPCS closes, Sweeney said in the report. T-Mobile announced Wednesday it had agreed to buy MetroPCS from its shareholders for $1.5 billion in cash and 26 percent ownership of the merged company. The company is expected to keep the MetroPCS brand alive post-merger (CD Oct 4 p1). “If people assume T-Mobile won’t also acquire Leap in the near term, then there is no rush for Sprint to acquire Leap,” Sweeney said. “However, we think that it would be dangerous for Sprint to either not make a competing bid for PCS, or alternatively, not to make a bid for Leap because Sprint could be left out of the consolidation game if T-Mo/PCS or another entity were to eventually bid for Leap.” The value of Leap’s shares was down 18 percent at the close Wednesday, in part due to concerns T-Mobile will aggressively expand MetroPCS’s pre-paid service in Leap’s markets if the proposed merger closes, Sweeney said. “This is a legitimate concern and would result in more competition in Leap’s markets,” Sweeney said. “But we think this would not happen until mid-2013 at the earliest. We also think the primary focus of the combined T-Mo/PCS entity should ultimately be on stemming the outflow of postpaid T-Mobile subscribers, as opposed to focusing marketing dollars and valuable spectrum on gaining more pre-paid share in new markets."