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Rumor: AT&T To Buy Cricket Wireless (Leap) Analysts Say Not Likely

Ever since the failed merger of AT&T and T-Mobile, speculation has been running rampant as to what AT&T is going to do next to help with the “spectrum crunch” and AT&T’s rising number of customers. Rumors have circulated that AT&T may consider buying MetroPCS or Leap Wireless, the parent company to Cricket Wireless.

Cricket said themselves on their Q4 earnings call this week that they were in negotiations to possibly sell themselves to the nation’s second largest carrier. According to this report, on the pando ticker, Leap is one of the most likely acquisition candidates for AT&T.

More after the break

These reports about AT&T possibly buying Cricket were hot and heavy on Wednesday and Thursday however by Friday, Analysts were starting to discount the possibility of an AT&T/Cricket marriage.

“It becomes increasingly difficult to recommend Leap shares for purchase at a time when the risks for the entire U.S. wireless industry has increased and Leap remains in a relatively weak position,” Gregory Miller, a New York-based analyst with Collins Stewart, wrote in research note today (reports Bloomberg). It’s also “highly unlikely AT&T (T) would acquire it as recently speculated,” said Miller, who cut his rating from “buy” to “neutral.”

Cricket Wireless expanded to nearly the entire continental United States in 2011 with a deal that put them into almost all of Best Buy’s US stores. Best Buy offers several Cricket phones, some that are exclusive to the chain.

Cricket has also beefed up it’s smartphone portfolio in the last two years and continues to innovate in the prepaid space. AT&T currently has their own prepaid outfit however it doesn’t have the mass appeal that Cricket, MetroPCS or either of the two prepaid units that Sprint owns, Virgin Mobile USA and Boost Mobile.

Source: Bloomberg