Report: Sprint holding back on MetroPCS bid - Mobile World Live

Report: Sprint holding back on MetroPCS bid

11 OCT 2012

Bloomberg said that Sprint is holding fire on a potential bid for MetroPCS, in order to get a better handle on T-Mobile USA’s previously-announced plan to acquire the tier-two operator.

According to the report, Sprint’s board has met to discuss making a possible counter-offer, but will wait until Deutsche Telekom, parent of T-Mobile, files a proxy statement which will give further details on its negotiations.

It was suggested that Sprint has up to three months before MetroPCS investors vote on the T-Mobile offer, during which time it can devise a strategy for a counter-bid.

Bloomberg sources also claimed that the management of Deutsche Telekom are prepared for Sprint to make a move, and “would consider better terms if necessary” – meaning that it is in MetroPCS’ best interest for Sprint to step-up.

Sprint is believed to have held talks with MetroPCS on multiple occasions in the past, although these never came to fruition.

Because Sprint and MetroPCS both use CDMA for their 2G/3G services, the combined business is likely to be able to integrate more quickly on a technical level than MetroPCS and T-Mobile, which instead uses the GSM-family technology.

Sprint has previously suffered from massive network integration problems following its acquisition of Nextel, which used iDEN technology.

It has been mooted that Sprint will wait until T-Mobile has merged with MetroPCS before proposing a merger with the combined entity, although the complexity of this strategy is unlikely to prove appealing to Sprint shareholders – especially as the company is already investing heavily in a network modernisation.

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Steve Costello

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