On April 27th, the US Federal Communications Commission will lift a ban on the telecom companies engaging in merger talks. Once they engage, they can do and Wall Street analysts are betting there will be mergers. According to Reuters article written by Liana Baker and Anjali Athavaley the companies in play will likely be T-Mobile, Spring and Dish. One should note the companies are trading at 31 times forward earnings versus the S&P 500 telecom services index at 18. Just because Wall Street is looking to the 3 above companies, all the companies in the index could be a buyer or seller.

The reason for the ban on mergers talk was the companies who bought spectrum rights had to hold onto them for about a year. They could not be bidding for other companies and T-Mobile and Dish won the bulk of the spectrum rights making them more attractive to other companies. If you consider your habits and those that you can see around you, more people want to do more on their mobile and to do more a company needs to have the infrastructure so people can do more. The advantage is to the larger company.

Linking to dividend paying stocks, many companies will have specific relationships which tend to help them or protect them against the competition. As a shareholder, you will want to know what regulations the government should keep and which ones allow your investments to prosper. Removing regulations maybe a good political saying, keeping the wolves away from your investments is a better strategy for you.

There are more questions than answers, till the next time – to raising questions.