Sprint keeps merger with T-Mobile in hand while it weighs its options

Despite the U.S. wireless market being saturated, Sprint is making headway through sweetened price points and better connectivity.

According to sources familiar with the matter at hand, Sprint Corp’s proposed merger with Charter Communications Inc has yet to come to fruition, with the wireless carrier looking for alternative ways to deal with T-Mobile US Inc.

The SoftBank Group Corp, which controls Sprint, has proposed a complex transaction that would see the creation of a new company, after the merger, which will be controlled by it, said sources privy to the talks on the condition of anonymity.

There is no guarantee Charter would be interested in a tie-up with Sprint, said the sources with a Bloomberg’s report stating that Charter has rebuffed Sprint’s merger proposal.

With a market capitalisation of $94.6 billion, Charter is much larger than Sprint.

Incidentally, sources reveal that Verizon Communications Inc has also expressed interest in acquiring Charter.

If Charter were to agree to Sprint’s merger proposal, it would require Comcast Corp’s blessings, since both companies had announced an agreement in May that bars either company from entering into a material transaction in wireless for a year without the other’s consent.

WHen asked to respond to requests for comments, Comcast and Sprint both declined comment while T-Mobile  and SoftBank did not immediately respond.

Sprint has been eyeing at solutions that enable a faster turnaround, as it seeks to strengthen its financial health in order to better compete in the fiercely competitive U.S. wireless market.

To this end, earlier this month, Sprint had held funding talks with Warren Buffett’s Berkshire Hathaway Inc and John Malone’s Liberty Media Corp. However, they have yet to result in a deal.

According to sources, although Sprint had been engaged in a exclusive talks with Charter and Comcast for over two months, over a potential wireless partnership, which incidentally placed Sprint’s own merger with T-Mobile US on hold, with the exclusivity of that period has ended and with no deal in hand, Sprint is continuing the talks and weighing its options.

Investors are vying for the merger between Sprint and T-Mobile, the fourth and the third largest U.S> wireless service providers given the cost cutting benefits of such a deal.

Although, T-Mobile has acknowledged interest in such a deal, it is playing cool to Sprint’s offer and is in no hurry to conclude talks and ink a deal. Especially because it has been steadily gaining market share from AT&T Inc and Verizon Communications Inc thanks to due to economical pricing strategy.

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