The ORM Los Angeles company has recently read a story on the Wall Street Journal regarding how Sprint is entering exclusive talks with Comcast and Charter and they are potentially putting merger discussions with T-Mobile on hold, for now. These three companies are exploring a deal together that can boost wireless offerings. There may be the chance for a subsequent merger between Sprint and T-Mobile which may still be the most likely outcome. There are many possible options and another one may be the resale agreement where they would be a joint purchase of Sprint by Comcast and Charter.
The reason for this arrangement is so that Charter and Comcast can both invest in improving Sprint’s network in exchange for favorable terms to offer wireless service using the carrier’s network. This means that there is also a possibility that both of these companies may take equity stake in Sprint. Most cable companies already have network-resale agreements with Verizon Communications Inc., but the Sprint deal could actually provide much better terms.
Sprint currently has a market value of $32 billion and also $32.6 billion of net debt. There has been rumors that maybe T-Mobile and Sprint can merge together yet they have remained far apart in their merger talks but this idea is still not off the table and can still happen for both companies. As Comcast jumps into the wireless business, Mr. Roberts has been reluctant and his goal is to be able to have a better reseller agreement. The Charter CEO says he sees the logic in buying a wireless operator for the right price and right owners but doesn’t know if this is something that is necessary for the company.
The only downside of T-Mobile and Sprint is that both of them don’t have extensive consumer wired networks so combining wireless with cable’s high-speed wires could help speed construction of next generation, and even wireless internet connections. Lets wait and see what happens next.