Sprint Prime to Acquire Leap Wireless or Other Smaller Carrier: Report
Sprint's stock is performing better than it has in years, says Bloomberg, putting it in a position to consider growing its base through an acquisition.Sprint has been playing catch-up to Verizon Wireless and AT&T for years. But with CEO Dan Hesse's three-part plan to get the derailed carrier back on track beginning to show results, the nation's third-largest carrier is attracting attention, and may be ready for an acquisition, Bloomberg reported Sept. 26. In 2005, Sprint made what turned out to be a disastrous decision to buy Nextel. With incompatible networks, customers fleeing and a warranted reputation for terrible service, Hesse was hired in 2007 to fix things. He has since put in a place a plan to close down the Nextel network, struck a deal with Apple to offer the iPhone, and, despite a number of obstacles, begun rolling out a Long Term Evolution (LTE) 4G network alongside Sprint's WiMax network. During the second quarter, reports Bloomberg, Sprint's cash and equivalents—which fell to $2.1 billion after the Nextel acquisition—rose to a six-year high of $7.6 billion during the first quarter and held steady at $6.8 billion as of June 30. While Sprint's more than $20 billion of debt is far from desirable, the strength of its stock price, analysts told Bloomberg, suggests it could find smaller carriers potentially willing to strike a deal. It's said that Sprint might consider prepaid brands MetroPCS and Leap Wireless, and even T-Mobile was named as a possibility. Sprint and T-Mobile operate on different technologies, however, which would greatly complicate such a deal, and then there's the matter of gaining the approval of the Federal Communications Commission (FCC), which AT&T—certainly by no lack of effort—failed to do during its 2011 bid to buy T-Mobile.
Sprint was said to be in talks with MetroPCS earlier this year. Those conversations fell apart, but with Sprint's stock now trading at nearly twice the value it was at in February, it's possible those talks could be revisited, according to Bloomberg.