Who Buys Sprint?

With its stock price now so low, it is inevitable that speculation will grow about the fate of Sprint Nextel as an independent company. There has always been some level of speculation about Comcast's possible interest in Sprint. Most likely there also will be talk of what Google might want to do with those assets. There are lots of plusses and minuses for either company.

Given the growing importance of product bundling, as well as wireless, it might make sense for Comcast to have its own wireless assets, it is argued. Comcast is a part owner of some wireless spectrum through SpectrumCo and also uses the "Pivot" offering developed by Sprint to offer a branded wireless service to cable customers.

Then there is the fourth-generation WiMAX asset Sprint could provide. But there are lots of arguments why Comcast can't, or shouldn't consider buying Sprint. Start with the WiMAX network, which obviously would operate outside Comcast's cable franchise territory. There is one big unstated "no no" among leading cable operators, and that is that one never competes with another cable operator. "I have mine, you have yours" has been the rule since the industry began in the late 1940s. Comcast would not likely want to be first to break the taboo.

Comcast shareholders also seem to be terrified that Comcast might embark on just such an expensive acquistion. The last time Comcast tried, attempting to buy Disney, the stock was pounded. Any Sprint acquisition would likely have the same effect this time, and Comcast's stock price already is beaten way down.

Comcast also says it continually monitors what is happening in the wireless industry, and one could make the observation that as crucial as wireless has been as a revenue growth engine, slowing has to occur as the market reaches complete saturation in just a few years. Nor is it clear that cable customers see wireless as a "natural" part of a bundle. That's arguably not the case for buyers of "phone service," who may well see a wireless-broadband-voice bundle as "natural" and "logical."

Google, on the other hand, might also be seen as a logical consolidator. It clearly wants mass in the wireless market, and control of Sprint's customer base would be helpful. The price tag is really low. The 4G network makes much more sense for Google than it does for Comcast, and the cost of the spectrum is already baked into Sprint's share price.

On the other hand, Google wants to work with all the major wireless carriers, and becoming a competitor doesn't help. Nor will Google want to mess with operation of three networks or Sprint's marketing challenges. Still, to the extent that ownership of a national broadband wireless network might be helpful, and if the eventual owner of the 700 MHz C block spectrum is a company like at&t or Verizon, who might drag their feet putting that spectrum into service, Google and other supporters of a mobile Web approach untethered from legacy considerations about voice might want a chance to move ahead with WiMAX using a new business model.

Perhaps Google could even work out a pre-planned buy of all of Sprint, and then immediately spin off the non-WiMAX assets, to avoid becoming a competitor to at&t and Verizon. Other scenarios obviously will make sense to people if Sprint's share price doesn't climb soon.