Sprint’s merger talks with T-Mobile are temporarily on hold while the carrier mulls over a number of potential deals with the United States’ two biggest cable companies, Comcast and Charter, according to The Wall Street Journal.
The trio of companies have reportedly agreed to a two-month exclusivity period on cutting a deal. Comcast and Charter appear to be interested in reselling Sprint’s wireless service under their own name. That’s something Comcast has already been doing with Verizon, and it could use Sprint’s network to improve coverage.
Such a deal would likely involve the two cable companies making an investment in Sprint, which the carrier would then use to build out its network, generally known to be the worst of the four major phone service providers. The Journal also reports that Comcast and Charter could make a bid to acquire Sprint outright, but it said the outcome was seen as less likely.
Though they’re usually an unlikely pairing, Comcast and Charter agreed in May to team up when making deals around wireless coverage for a full year. For the most part, both companies have been slowly losing TV subscribers year after year as customers shift over to online services. They see phone service as a new offering that could help to restore growth and lock in subscribers.
Comcast started launching its Xfinity Mobile phone service last month. The service uses Verizon’s network for mobile data, but it also relies on the 16 million Wi-Fi hot spots Comcast has placed throughout its wired coverage area. Because it has to pay Verizon for all data usage, Comcast tries to offload as much as possible to its Wi-Fi network. Bringing Sprint into the equation could provide it with a better deal on data and expand coverage to new areas.
Charter doesn’t have a wireless phone offering yet, but the company’s CEO indicated last year that it has every intention of launching one. Like Comcast, Charter also has a deal with Verizon to use the carrier’s network. So by teaming up, the two cable providers can get a better deal for their own wireless networks, while very likely continuing their practice of never actually competing with one another by only offering service in areas that they already have wired coverage.
None of this means that Sprint’s talks with T-Mobile are done for. Though Comcast and Charter seem to have teamed up for the express purpose of talks like this, the Journal doesn’t say there’s a clear indication that a deal will be made. And even if they do make an investment in Sprint, that still doesn’t mean Sprint won’t ultimately be bought up by T-Mobile, which has been eyeing it for months.