Who Will Save Sprint?

By Doug Mohney October 05, 2015

Sprint has been on the skids for a while, a long slow decline due to a combination of bad decisions.  Currently owned by SoftBank, it’s an open question as to when the No.  4 carrier in the U.S. is sold to someone else.  The more important question is who could and would buy Sprint.

Consider Sprint’s current position.  It has lost market share to T-Mobile and currently has a burn rate high enough that it plans to cut jobs and expenses to trim out $2.5 billion in costs in the next six months.  It doesn’t have enough cash to participate in the next spectrum auction, a major issue for a business that needs spectrum to thrive.   Sprint says it will already has enough RF spectrum and simply needs to upgrade and enhance its current network, but the frequencies it has are less than optimum – in essence, the company might be better off paying for higher quality spectrum at auction, but it can’t.

Given some of the noises Sprint CEO Marcelo Claure made about being “formidable” if it was merged with a cable operator and a spurt of cable merger activity, it is natural to consider who might buy Sprint.  But first I’ll make a short list of companies that can’t buy it: AT&T, Verizon, T-Mobile, and Comcast.   The Federal Communications Commission (FCC) has a long history of liking more competition in the wireless space, so any attempt to push the market to three carriers is unlikely, even if it were to put together T-Mobile and Sprint as a company with the size and mass to go toe-to-toe with AT&T and Verizon.  Comcast is just too big at this point to buy anything of marketplace significance after NBC/Universal and would have a long way to go to convince regulators that there’s any “good” in it owning a wireless carrier given the questions raised after it tried to merge with Time Warner Cable.

Image via Shutterstock

Of the other telcos, CenturyLink and Frontier would both be viable candidates in my view. There are infrastructure synergies to be gained when putting together Sprint’s wireless assets with a landline provider.  CenturyLink might be the more viable option, given that Frontier has debt from buying Verizon landline pieces and Frontier getting into the wireless business might make it more difficult for it to obtain more Verizon landline assets as they become available in the future.

Altice and Cox are interesting options.  Altice just bought Cablevision and Suddenlink and its founder has expressed interest in adding a U.S. wireless option “someday” in order to offer a quad play. Privately-owned Cox might have to stretch to buy Sprint, but given the growth-minded folks on the business side, adding wireless would provide the company with new avenues to provide cloud services.

My pet favorite for purchasing Sprint is Alphabet, the company formerly known as Google. The Google Fiber division and the search engine/data center people have already built a national backbone.   When Sprint finally migrates customers to LTE and shuts down the last vestiges of 3G networking, adding voice traffic to the existing network becomes an easy lift.    

Alphabet already has a big stake in the wireless world with Android, recently expanding its ties with the purchase if Jibe Mobile to support Rich Communications Services (RCS).  The company formerly known as Google once upon a time made noises about bidding on wireless spectrum and currently runs an MVNO.   Purchasing a wireless company would be a logical next step and the company certainly has the financial resources make a successful bid. 




Edited by Maurice Nagle

Contributing Editor

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