At the start of last weekend, the Wall Street Journal has published a report stating that Sprint had proposed a merger deal with Charter Communications that would effectively place the combined business entity under the control of Masayoshi Son, the chairman of SoftBank (which is the parent company of Sprint). Charter, however, has said that it is still looking to take full advantage of its existing MVNO deal with Verizon Wireless, and claimed that it is not planning to acquire Sprint.
As told by Charter to FierceWireless (by way of email correspondence), the cable giant fully grasps the reasons SoftBank would be interested in a proposed merger deal, but insisted that Charter has not interest in acquiring Sprint. The company further explained that it intends to make use of its current MVNO relationship with Verizon Wireless, and fully expects to debut its mobile service offering (for cable subscribers) by 2018.
It bears noting that several days ago, Sprint’s exclusive two month window to initiate negotiations with both Charter and Comcast with regards to possible collaboration agreements has effectively closed. But numerous reports suggest that the discussions between the three companies had continued, and there is a possibility that both cable companies could take an equity stake in Sprint, and then invest in the major US wireless carrier’s network (considered the fourth biggest in the country) in order to contribute in boosting wireless coverage and network capacity to prepare for the coming of the 5G era.
It was back in May earlier this year when Charter and Comcast had revealed a partnership in aligning their strategies for entering into the wireless business. As for rumors of a potential T-Mobile and Sprint combo, they have been brewing for some time now. As a matter of fact, SoftBank had hoped several years ago to acquire T-Mobile, but was hindered by federal regulators under the Obama administration.
But if a mobile operator was to join forces with a cable company (or a couple), it might have a better chance of getting approval from regulators. Moreover, Sprint is set to deal with a lot of financial challenges in the years to come, especially when its debts start to become due. If Comcast and Charter come in, both companies could provide the funding Sprint needs to complete its 2.5 GigaHertz build out. Lastly, Sprint could utilize Comcast and Charter’s extensive wireless network and Wi-Fi hotspot assets, and pair them with its own considerable 2.5 GigaHertz holdings, in order to be able to back haul its wireless network traffic more cost effectively.
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