Sprint Back in Buying Mode Following Failed T-Mobile Bid
Sprint's failure to complete its proposed acquisition of T-Mobile this August was a disappointment for the company, but it appears that Sprint is again starting to get the acquisition itch.
A Nov. 12 report by USA Today says that Sprint is eyeing a Los Angeles startup, FreedomPop, a free Internet and mobile phone service provider, as part of a possible acquisition or investment.
"The talks are fluid, meaning they could lead to an investment, an acquisition or no deal between the companies," the article said. "Other suitors have emerged for FreedomPop, among them a large U.S. technology company and a smaller wireless carrier, according to the sources who are not authorized to speak publicly about the matter."
The potential acquisition inquiry follows some tough recent months for Sprint, which is the number three wireless company in the United States, behind Verizon Wireless and AT&T and ahead of T-Mobile.
In early August, Sprint dropped its plans to buy T-Mobile after the move was opposed by regulators, according to reports. Sprint had been rumored for months to be seeking a merger with T-Mobile so that the two struggling companies could join together and fight harder to compete with mobile powers Verizon Wireless and AT&T. Neither company ever commented on those rumors until Sprint finally said in August that it was giving up its plans.
Following the aborted merger attempt, Sprint then shook up its executive ranks by replacing its CEO, Dan Hesse, with Marcelo Claure, the founder and CEO of Brightstar, a subsidiary of Softbank, which is also Sprint's parent company.
Earlier this month, Sprint announced disappointing financial results for the second fiscal quarter of 2014, having lost $192 million on consolidated net operating revenue of $8.5 billion. Sprint lost some 272,000 postpaid customers in the quarter and announced that another 2,000 employees will lose their jobs as the company tries to save money and turn its financial performance around, putting more sour notes on its earnings call.
"These results occurred during a transitional quarter for the company, as Marcelo Claure was appointed the new president and chief executive officer in mid-August," the company said in a statement, as it attempted to lessen the impact of the results at the time.
"We have started a transformational journey," Claure said in a statement. "While the company continues to face headwinds, we have begun the first phase of our plan and are encouraged with the early results. Every day, we are focused on improving our standing with consumers, improving our network and controlling our costs."