Sprint CEO Dan Hesse told Congress that if the AT&T, T-Mobile deal was approved, the third-largest mobile operator in the United States may have to be acquired by a larger company in order to compete. Analysts are speculating that CenturyLink may be the company that’s most likely to buy Sprint, if it ever got to that point.
Combined, Verizon Wireless and the AT&T-Mobile would account for more than 75 percent of the mobile subscriber market and it would put Sprint in a difficult position to compete. It would have about 51 million subscribers compared to the more than 100 million users for Verizon and the 137 million or so users for a combine AT&T-Mobile entity.
CenturyLink is the third-largest landline provider (it also does high-speed Internet) and it is in need of a wireless business, analysts say. Additionally, Sprint CEO Dan Hesse has business relationships with the company.
“CenturyLink is a company with a really good balance sheet and looking for areas to invest its capital, its free cash flow in growth,’ said Piper Jaffray analyst Chris Larsen, in a Bloomberg interview. “If Sprint can stabilize and then begin to grow its customer base, it becomes a growth vehicle for them.”
It’s looking like the AT&T-Mobile deal will go though, although I’m sure there will be a ton of strings attached. The Federal Communications Commission and the Department of Justice will undoubtedly require a ton of divestitures and require data and voice roaming. It’s still going to take a long time to finish but Sprint needs to be forward thinking if it plans to be successful.
A CenturyLink acquisition could give Sprint the resources it needs to battle the two giants but it’s a little sad seeing so much consolidation in the mobile space. What do you think, friends? Can Sprint go at it alone or will it need the backing of a larger company to compete?