Tech Talk: Should Sprint Make a Merger Deal with Cable?

Sprint has been in a not-so-great position for quite a few years now. After failing to successfully acquire T-Mobile US, Sprint's parent company brought in all-new leadership to the fourth largest carrier, and have been turning it around. But the company is in debt, a lot of debt. It has billions worth of debt coming due in the next couple of years and right now, Sprint has no way to pay for it. So looking for a merger is becoming a big deal for Sprint. However, with 5G on the horizon, Sprint is in the perfect position to take advantage of the next evolution of wireless with their existing spectrum portfolio. So they are no longer looking at just T-Mobile to be able to better compete with juggernauts AT&T and Verizon. But instead, looking at cable companies like Charter Communications and Altice NV.

With 5G, many carriers are looking to get their hands on high-band spectrum, as it holds more capacity and faster speeds than the low-band spectrum that carriers were so interested in with 4G LTE. Sprint has plenty of 2.5GHz spectrum, which they have been using in their 4G LTE network with carrier aggregation, which has resulted in some pretty fast speeds. SoftBank and Sprint both feel that their spectrum has been undervalued, especially after seeing the amount that AT&T is paying for Straight Path Communications.

When SoftBank was looking to purchase T-Mobile a few years ago and merge them with Sprint, the FCC and other regulators told their representatives in Washington that they wanted at least four major carriers in the country. Now if Sprint does opt to tie up with a cable company, they would be leaving four major carriers in the US, so the regulators shouldn't have any issues with a merger happening. Also by tying up with a cable company like Charter or Altice, they will be able to bundle things like home internet and TV with wireless. Something that Comcast is beginning to do with their Xfinity WiFi which is running on the back of Verizon's network (this is thanks to an agreement the two made a few years ago when Comcast licensed spectrum to Verizon). So it would make things a bit more interesting in the cable and wireless space.

Obviously, SoftBank could help bail out Sprint and help them pay off their debt. But that would put SoftBank's CEO and Sprint Chairman, Masayoshi Son in a pretty tough spot with his investors. So it's not something that Son is looking to do, but if he has to do it, then he will. Son had originally planned to buy Sprint, then buy T-Mobile and merge the two together so that they could compete with the likes of AT&T and Verizon, but regulators stopped that. Since buying a controlling interest in Sprint, SoftBank has continued to buy more and more stock in the company. Currently, SoftBank owns about 80% of Sprint.

Sprint merging with a cable company could be a good thing, of course it'll depend on which cable company they hook up with. But it would help them compete with AT&T and Verizon, both of which do cable TV and home internet. Meaning that they both have more than just a wireless business, while the two smaller carriers - T-Mobile and Sprint - don't. Carriers are not able to do any merger talks until after April 27th, due to the Incentive Auction for the 600MHz spectrum, which Sprint didn't participate in.

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Alexander Maxham

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Alex has written for Androidheadlines since 2012 as Editor of the site and traveled the World to many of the biggest Smartphone and Technology events. Alex has a background in Technology and IT and Deep Passion for Everything Android and Google. His specialties lay in Smartphones of all budgets, Accessories, Home Automation and more. Contact him at [email protected]