How the market values the AT&T-T-Mobile deal

AT&T Inc's USD 39 billion deal to buy Deutsche Telekom's T-Mobile USA comes with a hefty price tag.

Here are some ways to value the deal:

The offer values T-Mobile at 7.1 times 2010 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), according to Bernstein Research.

That compares with Deutsche Telecom's multiple of 4.9 times, according to the analysts. The analysts note better growth prospects in the US market likely lead to a slightly higher multiple of 5.5 times to 6 times for the business.

AT&T does better when compared with other large deals in the sector. Bernstein analysts note Verizon Wireless paid 8.4 times trailing EBITDA for Alltel in a deal that closed in 2009; Sprint paid 8.2 times for Nextel Communications in 2005; and Cingular Wireless paid 11.5 times for AT&T Wireless in 2004.

Based on prevailing valuations of T-Mobile USA, the USD 39 billion purchase price represents a premium of about 50%, according to Bernstein analysts.

AT&T's offer values each T-Mobile subscriber at USD 1,147 each. At that valuation, No. 3 US wireless provider Sprint Nextel Corp would be worth USD 57 billion, almost four times its market value of around USD 15 billion.