Sprint (NYSE:S) CEO Marcelo Claure has said the mobile operator would become a “stronger and more formidable competitor” by merging with a cable company.
His comments echo those of Braxton Carter, CFO of rival T-Mobile US (NYSE:TMUS), who this week told TelecomFinance that cablecos are likely to target mobile deals in order to create a ubiquitous footprint.
The two smaller operators’ network expertise and manageable size make them attractive to both cablecos and DTH providers such as Dish, a banker noted to TelecomFinance.
Commenting on recent US sector M&A activity in an interview with Reuters, Claure emphasised that Sprint is not currently involved in merger talks.
Saying he had read about cable consolidator Altice (AMS:ATC) founder Patrick Drahi’s recent remark that he could “someday” buy a mobile operator, Claure added that “everybody” now wants to get into wireless, putting Sprint into a good position.
Sprint’s latest results showed that it had slipped behind T-Mobile to become the smallest of the four US wireless carriers. Both foreign-owned operators, which have struggled to compete with heavyweights AT&T and Verizon, have often been tipped as takeover targets.
Speaking to TelecomFinance, Carter said: “Cable/wireless convergence is an interesting theme, especially given Altice’s entrance into the US.
“While mobile carriers have historically lacked content expertise, broadband providers do have some expertise in purchasing and distributing content, for example. What broadband lacks, though, is the ubiquitous footprint, which can only be achieved with mobile.”
Fixed/mobile convergence, which has been a major M&A theme in Europe for some time, may soon come to the US, a New York-based banker said.
“The big weakness of cable is the lack of wireless. What is likely, over time, is that Sprint and T-Mobile will be bought by Comcast, or another cableco,” he added.
Claure predicted “exciting times ahead” for sector, predicting high M&A activity over the next year.
