Sprint has sat firmly in the third spot on the list of biggest mobile carriers in the U.S. for some time. As of yesterday, that title received its first plausible threat at the announcement of a T-Mobile and MetroPCS merger. Less than 24 hours after the MetroPCS board of directors approved the move, Sprint decided to throw its hat in the ring as a potential partner. According to the Bloomberg BusinessWeek report, Sprint is preparing a counteroffer that would top the $1.5 billion deal from T-Mobile USA’s Deutsche Telekom.
With the T-Mobile and MetroPCS merger awaiting regulatory and shareholder approval, there is a penalty clause set if either company were to back out. Sprint will likely have to take this into account in their ofter. That said, when Sprint attempted to make a takeover of MetroPCS earlier this year, they were willing to offer over $8 billion. Sprint is desperate for new subscribers as it has been watching its customer base trickle away since the sloppy transition of it’s purchase of Nextel in 2005. The threat of a combined T-Mobile and MetroPCS may be enough to drive Sprint’s bid up dramatically.
T-Mobile has not commented on Sprint’s sudden–although somewhat expected–involvement except to say that it is prepared to change the terms of its current agreement if need be. Deutsche Telekom seems fairly committed to the merger between their T-Mobile brand and MetroPCS. That could mean we’ll have a bidding war on our hands, and there are unique implications for the mobile market depending on who the victor may be. Who would have thought that in a battle between the third and forth largest mobile operators, fifth place would be the big winner?
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