In the world of wireless communication, first to market often means success. Just look at the iPhone and its quantum leap forward for smartphones. All of a sudden, keyboards disappeared, leaving more real estate for screen space. Soon, every phone maker followed suit and the smartphone as we know it was born. Being faster and more efficient than the competition bodes well for any company, which is why Verizon was so enthusiastic to beat AT&T in a bidding war for Straight Path. The company’s huge supply of 28 and 39 GHz millimeter wave spectrum used in mobile communications would give a massive head start to the winner in the race to 5G. But lost in all the uproar is the real winner in this bidding war; T-Mobile…..
What’s in Store for T-Mobile?
Just seven short months ago in October of 2016, Straight Path had nine employees. Two months ago, the company was worth about $400 million. Now, it just sold for more than $3 billion to Verizon in an all-stock transaction after an intense bidding war with AT&T. What triggered such a drastic valuation increase?
In 2015, Straight Path had claimed to have built communications systems using an arsenal of 28 and 39 GHz millimeter wave spectrum. However, after an anonymous person filed a complaint to regulators, the FCC investigated Straight Path. As a result, the company was forced to settle with FCC and put itself up for sale in January. The value of its assets made for an appealing target to telecom giants AT&T and Verizon for their use towards developing a 5G network.
But there’s another wireless communication giant with an interest in 5G, and this bidding war was nothing but good news for that company — T-Mobile.
Watch the video from T-Mobile as it announces the 5G plans nationwide:
T-Mobile acquired MetroPCS in 2013 and inherited Metro’s high frequency 28 and 39 GHz millimeter wave spectrum. The bidding war between two of T-Mobile’s biggest rivals seriously helped price out the company’s assets. If T-Mobile should ever find itself in financial trouble, Verizon just bailed them out of it. But more importantly, the secret is out…T-mobile has the biggest head start of any major wireless provider. Between that 5G lead, its growing user base, and constantly improving revenue, T-Mobile US, Inc. (TMUS) makes for a tantalizing stock pick.
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