Insiders See M&A in Sprint's (S) Future
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As Sprint Nextel (NYSE: S) continues the process of shoring up its balance sheet, it may be nearing the point when an acquisition or merger looks more likely. Sprint’s stock has doubled this year, and problems created by a messy, $36 billion takeover of Nextel are beginning to fade in the rear view mirror. With this is in mind, some say a deal is the best course of action for the telecom company. Others aren’t so sure.
If a merger is in the cards, it would likely involve T-Mobile. A combination with T-Mobile, the fourth largest provider, would create a carrier with the scale and size to challenge AT&T (NYSE: T) and Verizon (NYSE: VZ) Wireless. However, since T-Mobile uses of different operating networks, any deal would probably be a messy integration project, say analysts. With the bruises from the troublesome Nextel purchase just beginning to fade, Sprint might not be ready to bite off so much.
As such, the acquisition of smaller carrier could be more palpable. The two candidates that come to mind are MetroPCS Communications Inc. (NYSE: PCS) or Leap Wireless International (Nasdaq: LEAP). Of the two, MetroPCS would be the most meaningful and would add 9.3 prepaid subscribers vs. Leap’s 5.9 million.
For now, any deal remains speculation, but as Sprint stock continues to rise, and as the company pays down debt and upgrades its network, the day and hour of a big announcement draws closer and closer, say insiders.
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If a merger is in the cards, it would likely involve T-Mobile. A combination with T-Mobile, the fourth largest provider, would create a carrier with the scale and size to challenge AT&T (NYSE: T) and Verizon (NYSE: VZ) Wireless. However, since T-Mobile uses of different operating networks, any deal would probably be a messy integration project, say analysts. With the bruises from the troublesome Nextel purchase just beginning to fade, Sprint might not be ready to bite off so much.
As such, the acquisition of smaller carrier could be more palpable. The two candidates that come to mind are MetroPCS Communications Inc. (NYSE: PCS) or Leap Wireless International (Nasdaq: LEAP). Of the two, MetroPCS would be the most meaningful and would add 9.3 prepaid subscribers vs. Leap’s 5.9 million.
For now, any deal remains speculation, but as Sprint stock continues to rise, and as the company pays down debt and upgrades its network, the day and hour of a big announcement draws closer and closer, say insiders.
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