Sprint Looking for Cash, Possibly to Buy MetroPCS - The UpStream

Sprint Looking for Cash, Possibly to Buy MetroPCS

posted Saturday Oct 13, 2012 by Scott Ertz

Sprint Looking for Cash, Possibly to Buy MetroPCS

Since T-Mobile announced intentions to purchase MetroPCS, Sprint has been considering outbidding the company for the 5th largest US wireless carrier after initially bailing on the idea. The big question everyone asked was where would Sprint get the cash? They have dumped millions into troubled partner Clearwire on several occasions.

This week, Sprint answered that question without mentioning the question. Sprint has confirmed that they are in talks with Softbank for a possible cash infusion. No information is available on the details of the talks, but two things are pretty clear: if Softbank invests, it will change the management scheme of Sprint and the only reason they would be considering it is because they want to throw a large sum of cash at a project. According to Sprint,

Although there can be no assurances that these discussions will result in any transaction or on what terms any transaction may occur, such a transaction could involve a change of control of Sprint. Sprint does not intend to comment further unless and until an agreement is reached.

Either they are superstitious about talking details ahead of time or they do not want the general population to know what they are planning. If I had to guess, I would put my money on the latter. It looks like a Sprint purchase of MetroPCS will end up being a much larger change for the industry that previously anticipated, considering it would probably involve a change in control over Sprint. Only time will tell.

So, do you think it would be better for Sprint to change partial ownership and buy Metro, making a third major player in the 4G market, or is it better for T-Mobile to sweep in and put more pressure on the prepaid market? Let us know in the comments.


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