Sprint Corporation (S) Chief Executive Marcelo Claure thinks the fourth-place U.S. wireless carrier would be a strong merger partner thanks to its move to deploy new technologies and wireless spectrum.
Speaking during a conference late last week that was covered by the Kansas City Business Journal, Claure said Sprint is a “formidable partner to potentially merge with another carrier” or a cable company. “I guess people will always look at the potential to create that third carrier. The new administration, I have no idea how they’re going to look at it.”
Not In Any Deal Talks
Claure noted Sprint would have to wait until the auction of spectrum by the Federal Communications Commission is over before it could hold talks with any telecom or cable players including T-Mobile US Inc. (TMUS), which is at the center of most M&A speculation in the telecom market and particularly when it comes to Sprint.
Sprint parent company Softbank has already tried to merge Sprint and T-Mobile but had the efforts blocked by an unfriendly regulatory environment. With Softbank CEO Masayoshi Son pledging to invest $50 billion in the U.S. technology sector and saying he will create 50,000 U.S.-based jobs, there’s speculation swirling that the Trump Administration would be much more open to a deal than its predecessor.
Taking a page from Softbank, Sprint announced in late December Its commitment to create or bring back 5,000 jobs in the U.S. next year, saying in a press release it is looking forward to working with President-elect Trump “to do our part to drive economic growth and create jobs in the U.S.” (See also: Softbank: Is Jobs Move Linked to T-Mobile Deal?)
“We’re not speaking to anyone else,” Claure was quoted as saying about deal making. “At this point in time, we’re going to [wait to] see what happens until the spectrum auction finishes, and then we’ll see the different levels of interest, which I assume there will be plenty.” He noted that in five years’ time Claure is aiming for Sprint to be “a self-sufficient stand-alone company.”
Win Way for Merger Speculation
Ever since Donald Trump won the election, speculation has swirled that a merger between Sprint and T-Mobile would be more likely since Trump is expected to undo a lot of telecom regulation put in place under Obama. In addition to net neutrality potentially going away, many expect a friendlier M&A environment under Trump.
Although a deal between Sprint and T-Mobile is pretty much expected, it’s not clear if T-Mobile would want to merge with Sprint. For one thing, T-Mobile is in a much stronger place now than when Son last tried to pull off a merger. Also: Sprint is sitting on a lot of debt, which may not make a deal as attractive. (See also: Sprint & T-Mobile Merger? Don't Get Too Giddy.)