Both Sprint and US satellite television company Dish Network have expressed an interest in merging with Deutsche Telekom’s T-Mobile USA, according to Bloomberg.
Dish chairman Charlie Ergen made an informal approach about merging with the fourth largest operator in the US, according to the report, with a view to bundling the companies’ wireless and satellite offerings.
US number-three operator Sprint is also believed to have expressed a renewed interest in a merger with T-Mobile. The company was previously reported to be in talks with Deutsche Telekom regarding a merger in 2011, although the companies failed to agree on a price for the deal.
The approach from Dish is believed to have been made prior to Deutsche Telekom’s improved bid for tier two player MetroPCS on 10 April.
Several MetroPCS shareholders have opposed the acquisition but the sweetened bid — which involves reducing the future debt burden on the merged entity and cutting the amount of interest payable on that debt — saw two of the largest shareholders, Paulson & Co and PSAM, swayed. MetroPCS will hold a vote on the merger on 24 April.
The Dish bid for T-Mobile could be considered by Deutsche Telekom once the MetroPCS deal has been concluded and the feasibility of the bid from Sprint has been verified, the sources said.
Sprint is already embroiled in two potential deals: Japanese giant Softbank agreed to acquire 70 per cent of the company for $20 billion in October 2012, while it is in talks to acquire the shares that it doesn’t already own in wholesale network operator Clearwire. The latter deal has been complicated by a competing bid from Dish.
The Dish approach for T-Mobile may be more acceptable to regulators as the deal would ensure the continued existence of the fourth largest operator in the US, unlike the Sprint transaction.
A $39 billion deal for AT&T to acquire T-Mobile was abandoned in 2011 after regulators expressed similar concerns.
Significant consolidation activity is taking place in the US as smaller operators look to compete more effectively with dominant players Verizon Wireless and AT&T.
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