Sprint, the third-largest US operator, is considering a bid for T-Mobile US, according to The Wall Street Journal.

Sprint is studying regulatory concerns, sources said, and could launch a bid for the US number-four operator in the first half of 2014. Any deal could be worth more than $20 billion, depending on the size of stake Sprint attempts to acquire.

The combination of the third and fourth biggest operators would create a more credible competitor to the much larger Verizon Wireless and AT&T.

But such a deal would face tough opposition from antitrust regulators as the loss of a fourth major operator could lead to higher prices due to less competition. In a letter to the Federal Communications Commission in April, the US Justice Department said having four operators creates competition that is important to consumers.

Indeed, an attempt by AT&T to acquire T-Mobile was abandoned in 2011 after the Justice Department blocked the deal. Sources at T-Mobile said the company is wary of wasting more time on another protracted merger attempt that comes to nothing.

Verizon Wireless and AT&T have more than two-thirds of the country’s mobile subscribers and account for nearly all of the industry’s profits in the US. Sprint and T-Mobile combined would have almost 53 million postpaid subscribers, compared to the 95 million for Verizon Wireless and 72 million for AT&T.

Executives from Sprint and T-Mobile have publicly stated that the government should allow the companies to join forces as it would give them scale to make network investments and spectrum purchases that would allow them to compete with Verizon Wireless and AT&T.

For years, Sprint and T-Mobile were losing customers to the big two US operators but T-Mobile recently registered its first subscriber growth for more than four years, following the introduction of unlimited data plans and lower prices.

The Wall Street Journal speculated that if the companies move to merge now, they could risk rejection from regulators while waiting could mean political conditions become more favourable. On the other hand, people familiar with the matter said acting now could mean a deal is completed ahead of a crucial spectrum auction expected to take place in 2015.

The US mobile market has seen huge changes in 2013, with Japanese group SoftBank acquiring a 78 per cent stake in Sprint for $21.6 billion, and T-Mobile merging with MetroPCS.