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Sprint Nextel played the field a bit before committing to a merger with SoftBank, according to a merger proxy document filed by Sprint this week with the Securities and Exchange Commission.
The nation’s third-largest wireless carrier had discussions with at least four companies, though the specific names weren’t revealed.
The wheeling and dealing underscores the trend toward industry consolidation, spurred partly by competition, as well as by the need for more wireless spectrum. Sprint, in particular, was in both a financial and spectrum bind prior to the SoftBank deal.
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Before the SoftBank deal, Sprint had discussions with “Company W” for a merger, but no deal came about. Sprint also talked with “Company X,” about an agreement under which Sprint would acquire spectrum in exchange for Company X getting a significant stake in the wireless carrier.
At the same time, Sprint was in discussions with “Company Y” about a potential merger, and noted that Sprint and Company Y had previously talked about a combination or joint venture. Sprint also talked with “Company Z” about spectrum-partnering possibilities.
Sprint won’t disclose the parties, but it appears that Company W was likely MetroPCS, as Sprint and MetroPCS had reportedly been in discussions for a deal, and Sprint had weighed a counteroffer to T-Mobile’s terms. The background information gleaned from the merger document filed for the T-Mobile-MetroPCS deal match up with the background provided in the recent Sprint-SoftBank document.
The characteristics of the deal discussed between Sprint and Company X suggest that Company X is Dish Network. Dish has a large swath of spectrum picked up from several bankrupt assets but has no infrastructure or means to deliver a wireless service. Sprint’s plans to upgrade its network meant it could handle different bands of spectrum. Less likely is the possibility that Dish could have been Company Z, since it was a discussion of a spectrum-sharing relationship.
Company Y is almost certainly T-Mobile USA. Sprint had previously attempted to strike a deal with T-Mobile before AT&T swooped in with its offer. The filing said Sprint and Company Y had differing views on who should own the company and how much debt it should take on, suggesting a discussion between equals in the wireless field. With Sprint and T-Mobile, No. 3 and No. 4, respectively, among nationwide carriers, T-Mobile fits as Company Y.
T-Mobile and MetroPCS declined to comment on the story. CNET contacted Dish to comment on the filing, and we’ll update the story when the companies respond.
Interestingly, the deal talks between Sprint and SoftBank at one point included the possibility of including Company Y. Sprint had discussed the possible deal with Company Y without mentioning SoftBank specifically. But Sprint deemed the terms that Company Y had pushed for unacceptable, and the two ceased discussions.
In early October, T-Mobile said it was planning to merge with MetroPCS. Two weeks later, Sprint and SoftBank came out with their own merger announcement.
Both mega-deals are expected to close around the middle of the year, and should do a lot to shake up the industry.
Disclosure: CBS, the parent company of CNET, is in litigation with Dish regarding the legality of the Dish Hopper AutoHop feature.
Updated at 11:24 a.m. and 2:20 p.m. PT: to include a response from T-Mobile and MetroPCS.
