T-Mobile CFO thinks deal with Sprint is possible

T-Mobile US (NYSE:TMUS) CFO Braxton Carter said he thinks further consolidation in the U.S. wireless market is inevitable and held out the possibility of a combination between No. 3 player Sprint (NYSE:S) and No. 4 player T-Mobile.

Carter declined to say whether T-Mobile and Sprint had talked. "It's the logical ultimate combination," he told Reuters on the sidelines of the Goldman Sachs Communacopia conference this week. Those comments echo what he said publicly during an appearance at the conference with other T-Mobile executives.

"It is not a question of if but a question of when there is further consolidation in our industry," he said. Carter also said that "you have to bifurcate the regulatory environment," since Verizon Wireless (NYSE:VZ) and AT&T Mobility (NYSE:T) are each so much larger than both Sprint and T-Mobile. He also added that a new player could enter the U.S. wireless market, which "the [Department of Justice] would take into consideration to allow further consolidation in the industry."

It's unclear who that new player would be though. Dish Network (NASDAQ: DISH) is the most likely candidate, but Dish Chairman Charlie Ergen has held out hope that Dish could partner with erstwhile acquisition target Sprint and said in August that T-Mobile is probably the last wireless remaining partner Dish could pursue a merger or acquisition with.

Sprint CFO Joe Euetneuer declined to comment directly on the matter  during his own appearance at the Goldman Sachs conference. He said though that other markets showed that having three competitors of roughly the same scale produces more competition. "From a macro perspective one would say that [further consolidation] would be a good thing for the industry," he said.

Japanese operator SoftBank has acquired 80 percent of Sprint via a deal that was finalized in July, around the same time Sprint acquired partner Clearwire. T-Mobile completed its own merger with prepaid player MetroPCS in May and has been operating as a publicly traded company since then.

During his appearance at the Goldman Sachs conference, AT&T CEO Randall Stephenson seemed to rule out any more major consolidation in the U.S. wireless market for the next several years, pointing to the Justice Department's effort to block AT&T's pursuit of T-Mobile in 2011 and its recent lawsuit to block the merger of AMR and US Airways. AT&T is pursuing a deal to acquire smaller prepaid player Leap Wireless (NASDAQ:LEAP), a deal AT&T expects to close early next year.

Stephenson did say AT&T is potentially interested in deals in Europe if the price is right. "If there were opportunities that presented a good value, of course we would do it," he said.

For more:
- see this Reuters article
- see this WSJ article (sub. req.)

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