U.S. carrier Sprint is said to be interested in buying T-Mobile but if rumors are true, then Sprint may first have to fend off DISH Network, which is expected to make a bid in 2014 to buy the carrier.
DISH Network, the television satellite company, is trying hard to establish itself in the wireless communication business in the U.S. Earlier in April this year, the company offered to pay $25.5 billion to acquire 70 percent stakes in Sprint. However, DISH lost the bid to Japanese telecom giant SoftBank.
According to Bloomberg, sources familiar with the development, said Softbank CEO Masayoshi Son has approached banks such as Credit Suisse Group AG, Deutsche Bank AG, JPMorgan Chase & Co., Goldman Sachs Group Inc. and Mizuho Bank Ltd., and has also been receiving advice from the Raine Group LLC, about a possible acquisition of T-Mobile. The same financial institutions had helped Softbank acquire Sprint.
DISH Network has also partnered with Sprint to offer home wireless broadband service, on a trial basis, in some limited areas of Corpus Christi, Texas. The service is expected to start in mid-2014 with plans of tapping more markets in the future.
The company has already spent around $3 billion on wireless airwaves and is expected to buy more in the U.S. soon. However, DISH Network may save billions of dollars if it puts its spectrum to use on an existing wireless operator's network like that of Sprint or T-Mobile.
Charlie Ergen, the chairman and founder of DISH Network, is looking to expand the company's reach beyond the pay TV market. A Reuters report cites three sources familiar with the matter and says that DISH Network is in discussions with T-Mobile's owner, Deutsche Telekom AG, regarding a potential deal.
T-Mobile, which is the fourth top carrier in the U.S., is aggressively working towards expanding its user base in the country. The carrier has started an "Uncarrier" initiative that offers a lot of advantages to customers such as unlimited data, international roaming, and more. The company is also said to be working on phase four of its Uncarrier initiative.
Uncarrier 4.0 is expected to be announced at the International CES on January 8 and T-Mobile could try to attract customers from other carriers by paying off the early termination fees (up to $350) incurred by customers to switch over to T-Mobile.
If the rumored initiative is true, then the company may be successful in bringing more customers to its network. More customers to the carrier will increase the value of the company, which may in turn attract potential buyers such as Sprint, DISH Network or a third party.
Neither Sprint nor DISH Network have commented regarding the bid for T-Mobile. Deutsche Telekom is reportedly ready to sell its 67 percent stake in T-Mobile, worth about $16 billion, but is currently not engaged in any discussions with either Softbank or DISH Network.
T-Mobile US shares closed up 4.69 percent at at $31.00 at the NYSE on Friday.
