The window has closed on Sprint’s exclusive negotiations regarding a wireless partnership with Comcast and Charter, but the talks reportedly are ongoing.
Sprint Chairman Masayoshi Son recently struck an exclusive two-month deal to hold discussions with Comcast and Charter focusing on potential partnership arrangements. The cable companies are said to be interested in launching an MVNO-type offering, and one potential arrangement could see them take an equity stake in Sprint and investing in the carrier’s network.
The window of exclusivity closed Thursday, Bloomberg reported, enabling Sprint to re-enter talks with T-Mobile or any other potential partner. But Comcast and Charter are still in the picture, according to unnamed “people familiar with the matter,” Bloomberg said.
Both Comcast and Charter have MVNO agreements in place with Verizon, but Sprint is expected to offer more palatable terms, according to Bloomberg.
A partnership with cable companies might be a better fit for Sprint than a merger with T-Mobile for several reasons. Simply consolidating the number of major U.S. wireless operators might not gain regulatory approval, while the arrival of a new entrant or two likely wouldn’t garner much scrutiny. And Sprint may not have to cede nearly as much control as it might under terms of a deal with T-Mobile, which has enjoyed significant traction over the last few years.
Additionally, Sprint—which will face significant financial challenges over the next few years as billions of dollars in debt comes due—could pour a cash injection from Comcast and Charter into its 2.5 GHz network buildout. And the mobile network operator could leverage Comcast and Charter’s extensive wireline networks and Wi-Fi hotspots to more quickly build out its 2.5 GHz holdings and more cheaply backhaul its mobile network traffic.
But analysts have repeatedly noted that any deal between Sprint and the two cable could eventually include T-Mobile.
“Actually, the best-case scenario (for T-Mobile) would be a four-way deal; however that seems tough to get across the goal line,” Jonathan Chaplin of New Street Research wrote recently in a note to investors. “The worst-case scenario would see a Sprint/cable deal that leaves T-Mobile out in the cold entirely; we don’t think this is the most likely outcome either. And then there are a host of scenarios in between, where T-Mobile would benefit, potentially greatly, but without the negotiating leverage that many have assumed.”