Earns Sprint Nextel

The Wall Street Journal is reporting this afternoon that Sprint is working on a potential T-Mobile USA purchase. The carrier is said to be looking into regulatory concerns right now, and a bid in upwards of $20 billion could come in early 2014.

A merger of these two wireless providers would be significant for a few reasons. For one, it would leave just 3 major competing carriers in the US. And two, Sprint and T-Mobile have a combined subscriber base close to that of AT&T and Verizon…

Here is the scoop from the Journal:

“Sprint Corp. S +3.44% is working toward a possible bid for rival T-Mobile US Inc.,TMUS +8.65% people familiar with the matter said, setting the stage for a giant telecom merger that if permitted by regulators would leave the U.S. wireless market dominated by three big companies.

Sprint is studying regulatory concerns and could launch a bid in the first half of next year, the people said. A deal could be worth more than $20 billion, depending on the size of any stake in T-Mobile that Sprint tries to buy.”

The report goes on to say that Sprint hasn’t yet decided whether to move ahead with a bid yet. It would be detrimental for it to do so without first checking with regulators, who have the power to squash the deal and would likely have antitrust concerns.

Currently, T-Mobile is the fourth largest carrier in the US with 45 million subscribers and Sprint is just ahead of it with 54 million. For comparison, Verizon has 120 million and AT&T has 108 million. So you can see how this could alter the landscape.

Both companies are just coming off major acquisition deals themselves. Sprint just sold a 70% stake in its business to SoftBank, and T-Mobile recently completed its buyout of regional carrier MetroPCS, which added over 9 million subscribers.

It’ll be interesting to see how this all plays out. Stay tuned.