Comcast and Charter both already have wireless resale agreements with Sprint stemming from a deal made in 2008, though the companies are not reselling Sprint service today, a source familiar with the situation told Ars.
Wells Fargo Senior Analyst Jennifer Fritzsche noted Sprint has a history with the cable industry - the latter were original equity holders in Sprint PCS, she said.
The talks are also considering a joint acquisition of Sprint, although this is the least likely option. Sprint has a market value of $32 billion and $32.6 billion of net debt. The discussions were described as "exclusive" for a two-month period, which means alternative efforts with T-Mobile have been put on a temporary hold.
T-Mobile's shares fell 3.39 per cent on Tuesday to $61.01 (U.S.), while Dish shares were down 0.03 per cent at $63.83.
"From a game theory perspective, this is a fascinating move", Mr. Moffett wrote in an e-mail.
Charter Chairman and CEO Tom Rutledge, meanwhile, has stated that purchasing a wireless operator makes sense at the "right price and right owners' economics". Less likely, the cable giants could jointly bid for the wireless firm. Comcast is bundling that mobile service with its high-speed internet service and is now limiting sales to within its cable market footprint. "On the other hand, Sprint's situation is much more challenging". If Comcast and Charter are bidding for a stake in Sprint, then those Sprint and T-Mobile negotiations will be affected. But there's also been on again, off again rumors that the cable industry would eventually acquire Sprint. The two previously discussed combining in 2014 but backed down in the face of regulatory opposition.
"For one, the current MVNO with Verizon restricts cable offerings to their respective footprints, whereas Sprint could allow the MSOs to offer service nationally", he said. Sprint needs capital to help it deploy infrastructure, and the cable companies need new ways to reach the so-called "cord cutters" who are discontinuing cable service in favor of wired and wireless internet service. Comcast slid 22 cents, or 0.5 percent, to $39.38, while Charter lost $1.73, or 0.5 percent, to $330.92. The company also bought $1.7 billion in wireless spectrum at a Federal Communications Commission's (FCC) Broadcast Incentive auction in April 2017, to bolster its wireless services. An Altice spokeswoman declined to comment.
The idea of Sprint and the cable industry partnering in one form or another has always been debated in the industry. (S) has entered into exclusive talks with Charter Communications Inc.