Sprint (NYSE:S) is in serious talks with Comcast (NASDAQ:CMCSA) and Charter Communications (NASDAQ:CHTR) to close a deal that will provide wireless services to its end users. The company has been involved in two-month discussions with the two companies, which will end in late July. The deal has affected the current merger talks with T-Mobile.
Sprint looks forward to inviting both Charter and Comcast to improve its network in exchange for constructive terms of the agreement to provide wireless services via the carrier’s network, which will involve the two firms owning a certain percentage of equity in the firm. The cable firms have had a similar deal with Verizon in the past but the Sprint deal could be more favorable.
Both Comcast and Charter seem to be more interested in the deal that would involve reselling Sprint’s wireless services using their own brand names. Comcast is already involved in a related deal with Verizon. The firm commenced using Verizon’s network for data bundles in the last month but it also relies on its Wi-Fi hot spots. The new deal with Sprint could further improve the company’s network coverage to new regions.
Charter doesn’t own wireless phone services yet but the firm has laid plans in place to launch one by end of the year. The company also has an agreement with Verizon to use its network. Therefore, by joining forces, the two companies will enhance the provision of their own wireless networks while continuing with their other offerings without outdoing each other in unnecessary competition. The merging strengthens the company offerings unlike when they would work individually.
The ongoing discussions don’t rubbish off the earlier talks Sprint had with T-Mobile. It’s not yet clear whether the current deal with both Charter and Comcast will be made. Again, even if the deal succeeds, it would not interfere with the process of T-Mobile buying the stake in Sprint which has continued for several months.
Though the cable companies already have another network-resale union with Verizon Communications, the latest deal with Sprint is likely to be considered. Sprint has a market investment of about $ 42.1 billion.