If the analysts from New Street Research are to be believed, it is becoming increasingly likely that Sprint will partner with either a cable operator or T-Mobile in the near future. This comes as the end of an exclusivity negotiation period between Sprint and cable operators Charter Communications and Comcast approaches. Once the exclusivity period ends, the smallest of the four national carriers will be able to begin searching for other companies for possible partnerships. It is important for the carrier to find an established partner with many resources in order for Sprint to fully utilize the spectrum it currently owns. The company, which has been repeatedly facing budget constraints over the past few fiscal years, is having trouble keeping up with its competitors in terms of network speed and availability, and is presumed to be interested in a merger in an effort to improve its infrastructure.
The chances that either a cable operator or T-Mobile will acquire Sprint are close to 70 percent, according to New Street Research. However, the likelihood that T-Mobile will purchase the smaller carrier is a bit lower due to regulatory problems that the two carriers may have to face. The entire acquisition process could last for around a year and may not be successful. Due to those concerns, it might be easier and more beneficial for Sprint to tie up with a cable operator, New Street Research speculates. In addition, such a partnership could still allow for another deal with T-Mobile. If this sequence of events is followed, Sprint could both benefit from the deeper pockets of the major cable operators in the country and T-Mobile's technological offerings.
Within the past few months, Sprint has been increasingly active in its efforts to find entities interested in a merger, acquisition or investment. With Republicans at the helm, the American government is expected to be more open toward consolidation in the carrier industry, making this a good opportunity for the company to consolidate with another one. Sprint's CEO has discussed the overall positive impact of the merger between T-Mobile and Sprint in the past, indicating that he's open to such a development. Meanwhile, the carrier's chairman, Masayoshi Son, has recently spoken with Warren Buffet and John Malone regarding a potential investment. Recent reports claim that Buffet may invest $10 billion in Sprint, resulting in the business magnate commanding 23 percent of the carrier's shares.