In the past few months, there was talk that two of the biggest wireless carriers in the United States mobile market -- T-Mobile and Sprint -- were considering a merger transaction. But earlier this week, the Wall Street Journal had reported that talks of a T-Mobile-Sprint merger are put on hold because Sprint is engaging in discussions with cable companies Charter and Comcast (the two entities are negotiating as one) with regards to possible future partnership deals. There is a good possibility that Charter and Comcast might land a deal in which they take an equity stake in Sprint and invest in the major US mobile operator (the fourth largest in the country behind Verizon Wireless, AT&T, and T-Mobile), and maybe leverage the deal to introduce a new wireless service.
Still, some industry watchers believe that despite being pushed to the sides (so to speak), T-Mobile may still yet play a significant role in the proceedings. Jonathan Chaplin, an analyst from New Street Research, explained in a recent investors note that there still exists a number of scenarios in which T-Mobile can participate in a sort of four way deal involving itself, Sprint, and the two cable companies. Sure, T-Mobile would lose some of its negotiating power, but it could still come out a winner with the right deal.
Interestingly, Braxton Carter, the chief financial officer of T-Mobile, had hinted some time last month that a potential merger between the third and fourth biggest mobile operators in the country may end up with a deal that involves Charter and Comcast anyway. Besides, if the point is to create an entity that will challenge the duopoly of Verizon Wireless and AT&T, a combined player consisting of T-Mobile, Sprint, Charter and Comcast would definitely give the industry leaders a run for their money.
Charter and Comcast actually already are in a good position to be involved. By initiating discussions with Sprint, they have basically garnered a ticket to any future talk of a merger that Sprint will hold with T-Mobile. As for Sprint, it benefits from the arrangement, too -- it is no secret that the carrier needs all the capital it can get in order to fully take advantage of its vast wealth of spectrum assets, and if a deal with T-Mobile did not push through, it now has a nice safety net by starting discussions with Charter and Comcast. Suffice it to say that the next few weeks or months should be interesting for all the parties.
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