Who Would Want Sprint? Google, Comcast

With shares down 61% the last 6 months and a market cap of just $24 billion now, just how long will the nations 3rd largest wireless carrier, Sprint (S) remain independent?

Who would want them? Two main candidates:

Google (GOOG):

Reports are Google is going to bid $4 billion for wireless spectrum in an upcoming auction. At this point and price, why not take Sprint's spectrum and get 54 million subscribers to boot? With the gPhone launching soon, wouldn't a cheap Sprint be the perfect platform? Sprint's main problem is subscriber losses, if current subscribers thought they might get first crack at a new phone, that exodus would be severely curtailed, if not halt.

Google was first rumored to be interested in Sprint late last year when shares were more than twice their current level and the company sported a near $50 billion market cap. If they are interested, time is wasting. At these levels, a bunch of folks may begin sniffing around.

Comcast (CMCSA):

With both Verizon (VZ) and AT&T (T) encroaching on their cable TV subscribers, wouldn't a tie up between the two be advantageous for both? Comcast would instantly be a player in the wireless game and Sprint would be able to offer wireless services bundled into Comcast's cable subscriptions.

Comcast currently sports a $52 billion market cap and could do the deal. Indiviually, Sprint and Comcast cannot offer the breadth of services Verizon and AT&T offer. Together, they would be a very formidable foe.

Disclosure ("none" means no position): None

Comments

[Java Joe:]

Google is also interested in Clear Wire's Wi Max technology a project that once involved Sprint. Sprint's version of Wi Max is called Xohm (pronounced zoam). A partnership between Google and Clear Wire will be an excellent move if Google wins the bid for spectrum along with the introduction of the gphone. Google doesn't need to acquire a firm such as Sprint which has a lot of debt and a large amount of customers defecting. Craig McCaw the CEO of Clear Wire was responsible for getting AT&T in the wireless business when he sold the company.

2008 Jan 23 09:06 AM

[Duff:]

Note:
Google has gross margins of 60%,
Sprint does not.
Why would Google limit itself to
one carrier, a distant 3rd place to boot?
Running a Carrier in this environment
is not Googles strength.
If they want to make a play they should take out
Motorola and preload Android on every handset sold.
Motorola will build more Handsets than Sprint Will ever activate....
Moto Makes more handsets in a lousy quarter
than Sprint has total customers.....

2008 Jan 23 01:07 PM

[Wade:]

If Sprint became "Google Wireless," then Google put its "muscle" behind the operations and producing an alluring device and apps, I could see consumers coming in droves to get the new gphone. Verizon and AT&T would likely lose customers to Google Wireless rapidly.

2008 Jan 23 03:06 PM

[xnext:]

The board will never sell to Google or Comcast. They want the company to be based solely in OP. They'd never allow Google or Comcast to move them out of the campus. They have tunnelvision when it comes to KC. Subscribers and shareholders mean nothing to them.

2008 Jan 23 05:15 PM

[Morris Johnson:]

I would hate to see Sprint management shortsighted in finding the best way to keep what they built viable, even if it means merging or being bought out.

I have always been fond of Sprint, I have a relative in a responsible poition in Sprint. It is my opinion that America is going to see some hard times in the future, and enterprises like Sprint need to keep themselves strong with deep pockets.

We can thank the politicians for many of the toubles we are having in this country, and of course people like Nancy Pelosi and Hillary would love to socialize everything. We don't want them getting their hooks into Sprint.

The Government is weakening our dollar daily and if we aren't careful, we will pass the point of no return.

I personally have 3000 shares of Sprint and intend to acquire perhaps that many more. CEO Hesse: Don't let us down!

2008 Jan 26 02:48 PM

[A Sprint em...:]

I keep hearing the rumors about Google...but nobody has ever tracked any kind of a reliable source for this so-called rumor. It is, in fact, speculation based upon Google's oodles of cash and thier current interest in wireless things, and Sprint's ever deepening hole that they have put themselves in. Like Duff said...why would they want to go from a free-wheeling internet/software model of write-it-once-and-sell... to Sprint's heavily regulated, incredibly capital intensive, intensely competitive environment.

2008 Jan 29 06:02 PM

[Employment ...:]

The Sprint-Google rumor strikes me as silly.

What would happen to Sprint's aging and overpaid workforce? They wouldn't be welcome at Goog, that's for sure. Goog has worked harder than any company in recent history to attract and retain top talent - with an emphasis on young innovators. They have worked equally hard to keep the University of Phoenix, corporate lifer crowd OUT. The last thing they want is to acquire a boatload of bozos from a sinking ship who could drag down the company until they all either die or retire.

For legal reasons that are not worth detailing, it would not be feasible for them to buy any substantial portion of Sprint's assets but dump the workers. Not to mention the PR and practical problems with firing everyone.

2008 Feb 02 05:05 PM