Sprint (S), (ERIC), (NOK) (SI) Losers in AT&T (T), T-Mobile Deal

There could be some significant fallout from the deal by AT&T (NYSE:T) to acquire T-Mobile, with analysts citing LM Ericson (Nasdaq:ERIC), Nokia (NYSE:NOK), Siemens (NYSE:SI), Research in Motion (Nasdaq:RIMM), Neutral Tandem (Nasdaq:TDMN) and Nuance (Nasdaq: NUAN) as those likely to lose the most.

Wedbush noted this on Nokia, Research in Motion, Neutral Tandem and Nuance:

“We also see a slight negative impact for Nokia and RIM on the device front as the iPhone will likely take some share.”

For "Neutral Tandem will likely see AT&T route T-Mobile calls to its own tandem switches in markets it has a presence."

“Nuance provides mobile care and has a good speech presence on T-Mobile devices while AT&T is starting to use more of its own speech software and Vlingo for speech application on mobile devices.”

Goldman Sachs (NYSE:GS) said on Sprint: "This deal will likely be a negative for Sprint, as it was the company perceived to "need" a combination with TMobile more than any other. This also remove the other viable option that CLWR (Nasdaq: CLWR) had (T-Mobile)."

Deutsche Bank on LM Ericson:

“We estimate T-Mobile US's Capex is $2.9bn p.a. or 12% of total US Tier 1 carrier Capex. The incumbent suppliers to TMOB are Ericsson & NSN in radio access and Tier 2 and 3 vendors in backhaul (we estimate ~70% is fibre/optical). It is likely that over time AT&T will integrate T-Mobile's cell sites into its own network and cut back spending on radio access and backhaul in areas with significant overlap."

Jefferies on Nokia, Siemens:

"Besides the long-term market share issue we highlighted above, we note that NSN is the major supplier of wireless infrastructure to LightSquared. That 4G network deployment, of course, is still getting off of the ground (many industry participants have concerns about the viability of the network). We note that LightSquared was pursuing a wholesaling strategy to other wireless operators without a 4G network plan. One of those prospective customers was TMobile USA. Now, in the wake of this deal, T-Mobile USA won’t require LightSquared’s services and the viability of Light Squared gets a bit more uncertain."

Goldman Sachs on Convergys Corporation (NYSE:CVG), CenturyLink, Inc. (NYSE:CTL), Frontier Communications (NYSE:FTR), Windstream Corporation (NYSE:WIN):

"We see the transaction as a potential long-term headwind for CVG as it currently generates a material percentage of revenues from AT&T and a small percentage from T-Mobile mostly for customer support and call center work."

RLECs - CenturyLink, Inc. (NYSE: CTL), Frontier Communications (NYSE:FTR), Windstream Corporation (NYSE: WIN):

Goldman Sachs "As part of its $39 bn planned agreement to acquire T-Mobile USA, AT&T is committing to significantly expand its 4G LTE coverage. Previous plans included intentions to cover roughly 80% of the US. Under the proposed merger, AT&T intends to deploy to 95% of the US population, or 46.5 mn incremental pops. The increased coverage is expected to primarily target rural markets."