(Reuters) - Who will Sprint Nextel Corp (S.N) call next?
Sprint was left out in the cold on Monday after AT&T Inc (T.N) swooped in to buy T-Mobile USA from Deutsche Telekom (DTEGn.DE) for $39 billion, a deal that would create the largest U.S. wireless carrier if approved by regulators.
Sprint's shares slid 13 percent as investors' hopes faded that it might strike a deal with Deutsche Telekom, increasing pressure on the U.S. company to fight back with an acquisition of its own.
Bankers said Sprint had a handful of options, but none of them would give it the clout to compete in a market dominated by AT&T and Verizon Wireless, which would collectively hold an almost 80 percent market share.
Sprint can look to buy Clearwire Corp (CLWR.O) or Harbinger-backed Lightsquared, smaller players that have plenty of airwaves at their disposal but need cash, bankers said. The bankers spoke on condition they not be named because they were not authorize to speak to the media.
It could also go after low-cost wireless carriers such as MetroPCS Communications Inc (PCS.N) or Leap Wireless International Inc (LEAP.O) to compete for cost-conscious consumers, a segment in which it already operates, they said.
But Sprint would still remain a distant third in the market after any such deals and can only hope in the long-term for a buyer, such as Verizon Wireless or a cable operator like Comcast Corp (CMCSA.O) or Time Warner (TWC.N).
That is far-fetched, bankers added, because cable operators could find more cost-effective ways to get mobile services, such as through wholesale arrangements or other commercial relationships. Several have relationships with Clearwire, which bankers said could be an attractive target for cable operators.
Sprint already owns 54 percent of Clearwire and is unlikely to sell out of that position. Instead, bankers said buying Clearwire most likely would be its next move.
Clearwire CEO Bill Morrow resigned earlier this month as part of a management shake-up amid a rate dispute with Sprint, which leases network space from the wireless services provider.
Clearwire is looking for billions of dollars in new funding through either a sale of unneeded spectrum or an equity investment to finish building a high-speed wireless network.
"Sprint has to focus on what they do with Clearwire," an industry banker said. "If anything, it accelerates the timeline where Sprint buys it in."
Lightsquared, which is also looking for capital, could fit into Sprint's plans, a second industry banker said.
"There is no doubt they are out talking to everybody," the banker said.
"For (Lightsquared) to raise money, they need a large anchor wireless tenant," the banker added. "No one is going to commit capital to them unless they have someone to actually buy their services."
Sprint was left out in the cold on Monday after AT&T Inc (T.N) swooped in to buy T-Mobile USA from Deutsche Telekom (DTEGn.DE) for $39 billion, a deal that would create the largest U.S. wireless carrier if approved by regulators.
Sprint's shares slid 13 percent as investors' hopes faded that it might strike a deal with Deutsche Telekom, increasing pressure on the U.S. company to fight back with an acquisition of its own.
Bankers said Sprint had a handful of options, but none of them would give it the clout to compete in a market dominated by AT&T and Verizon Wireless, which would collectively hold an almost 80 percent market share.
Sprint can look to buy Clearwire Corp (CLWR.O) or Harbinger-backed Lightsquared, smaller players that have plenty of airwaves at their disposal but need cash, bankers said. The bankers spoke on condition they not be named because they were not authorize to speak to the media.
It could also go after low-cost wireless carriers such as MetroPCS Communications Inc (PCS.N) or Leap Wireless International Inc (LEAP.O) to compete for cost-conscious consumers, a segment in which it already operates, they said.
But Sprint would still remain a distant third in the market after any such deals and can only hope in the long-term for a buyer, such as Verizon Wireless or a cable operator like Comcast Corp (CMCSA.O) or Time Warner (TWC.N).
That is far-fetched, bankers added, because cable operators could find more cost-effective ways to get mobile services, such as through wholesale arrangements or other commercial relationships. Several have relationships with Clearwire, which bankers said could be an attractive target for cable operators.
Sprint already owns 54 percent of Clearwire and is unlikely to sell out of that position. Instead, bankers said buying Clearwire most likely would be its next move.
Clearwire CEO Bill Morrow resigned earlier this month as part of a management shake-up amid a rate dispute with Sprint, which leases network space from the wireless services provider.
Clearwire is looking for billions of dollars in new funding through either a sale of unneeded spectrum or an equity investment to finish building a high-speed wireless network.
"Sprint has to focus on what they do with Clearwire," an industry banker said. "If anything, it accelerates the timeline where Sprint buys it in."
Lightsquared, which is also looking for capital, could fit into Sprint's plans, a second industry banker said.
"There is no doubt they are out talking to everybody," the banker said.
"For (Lightsquared) to raise money, they need a large anchor wireless tenant," the banker added. "No one is going to commit capital to them unless they have someone to actually buy their services."