Sprint is buying U.S. Cellular
U.S. Cellular customers received confirmation in the mail in the past week that there cellular plans are now in the transitional stage of being transferred to Sprint. In a move that has been discussed since last year after a sharp dip in U.S. Cellular stock hit a low of $33.10. The stock price for U.S. Cellular has gone up two dollars to a price of $38.44. The one year high price for the stock was $41.54 a share. Most acquisitions like this do come and are finalized with a price that includes a price per share that is higher than before the deal is finalized. U.S. Cellular stock price has went up two dollars a share since customers received notice in the mail making the merger virtually official.
Currently, U.S. Cellular is now introducing to customers the newest Samsung Galaxy phone to customers. They are also offering a deal where if you preorder the device you will receive a free flip cover. U.S. Cellular Vice President of Sales and Marketing says “The Samsung GALAXY S 4 lets you get more done wherever you are and adds value to your many experiences with the ability to share meaningful moments with friends and family on a fast 4G LTE network.” (Market Watch, 2013). U.S. Cellular offers the highest quality cell phones and the best rated call quality in the nation. This merger and acquisition by Sprint should give it a competitive advantage over the competition and the company will bring stiffer competition and better service to their customers compared to AT&T and Verizon Wireless who should view the merger as a threat to their profitability as the acquisition will enhance Sprints ability to offer better service to customers than previously before the acquisition takes effect in the near future.
Existing U.S. cellular customers will be offered deals to purchase new phones that will be compatible with their new service provider which will ultimately use U.S. cellular assets as a way to better boost their market share and their ability to serve the country as the best in call quality compared to Verizon Wireless and AT&T. This is a great move by Sprint and should enhance their ability to compete with their biggest competitors as U.S. Cellular was a very fast growing company that was just now being viewed as a threat to the big three’s significant part of the industry market share.
Investors should see both stocks rise in the next few weeks as news of the merger and the new Samsung phone benefit both companies numbers and stock prices. This could have a ripple effect on the industry as the android phones have so quickly become the cheaper alternative to the Apple expensive phone that is costly to operate and often has received customer complaints due to the lack of quality on the one thing that all phones were designed for which is talking. This is the competitive advantage that Sprint will receive as they purchase a company with over $6 billion dollars in assets which includes about 70% in property, plant, and equipment. Some U.S. Cellular stores will be closed. However, the ability to offer better service and more store outlets along with an increase in the market share from obtaining so many U.S. Cellular customers will dramatically alter the landscape of the cell phone industry for years to come.
Market Watch. (2013, April 17). U.S. Cellular Begins Presale of Samsung Galaxy. Retrieved from Market Watch: http://www.marketwatch.com/story/us-cellular-begins-presale-for-samsung-…