Sprint started exclusive talks with Comcast and Charter over a potential wireless deal that could see the two telecom giants become mobile service providers by launching one or more mobile virtual network operators (MVNOs), industry insiders said on late Monday. The three parties just entered negotiations and have agreed to not discuss similar agreements with other entities for exactly two months, people with knowledge of the situation said, adding that this includes Sprint's talks with T-Mobile over a potential merger that may not end up happening if the Overland Park, Kansas-based wireless carrier agrees to a collaboration with Comcast and Charter. The two cable firms are currently said to be considering a number of options, including investing in Sprint's network infrastructure and thus effectively paying for a large part of a potential MVNO deal. Both have already signed similar agreements with Verizon Wireless, but the fourth largest mobile service provider in the country is thought to be able to offer them significantly better terms if it ends up being a direct beneficiary of their investments, latest reports indicate.
The new talks are said to be a continuation of Comcast and Charter's wireless partnership that the firms announced in early May, agreeing to not enter this market segment without each other's cooperation or at least approval in the following 12 months. The collaboration between the companies was originally said to entail joint investments in network development and wireless technologies in general, and a business venture with Sprint would allow Charter and Comcast to do just that. T-Mobile Chief Financial Officer Braxton Carter recently described the deal as a potentially massive industry disruptor and while he wasn't referring to this particular scenario, the two cable service providers may end up radically changing T-Mobile's future plans by preventing its tie-up with Sprint.
A consolidation of Sprint and T-Mobile likely wouldn't happen if the fourth largest wireless carrier in the U.S. ends up partnering with Charter and Comcast, industry sources said, adding that a potential acquisition of Sprint by the two cable firms still isn't out of the realm of possibility. Regardless, a merger of T-Mobile and Sprint remains the most likely scenario, despite the fact that Charter's largest investor Liberty Broadband Corp. has been pushing for a major commitment to the wireless segment for at least a year now. An update on the situation is expected to follow in the coming weeks.