Sprint Nextel has no shortage of supposed suitors: Pretty much every phone company, Google (GOOG), and Comcast (CMCSA) have all been rumoured as interested in buying the troubled No. 3 wireless company. But the WSJ’s Deal Journal blog floats an interesting idea today: Could Mexican telecom tycoon Carlos Slim Helu want to expand his empire to the U.S. — by buying Sprint?
Why not? Slim lives for deals — and his acquired companies “get integrated quickly” (unlike Sprint’s disastrous merger with Nextel). More strategically, he has six pending antitrust investigations in Mexico and doesn’t have much room to expand there, WSJ’s Heidi Moore argues.
And Sprint (S) looks cheap. “At a 20% premium to its current $20.2 billion market cap, each of Sprint’s current customers would be worth $449.30 each. By comparison, when Cingular bought AT&T Wireless back in 2004 it paid $1,860 for each subscriber,” Moore wrote last week, when she debated whether Verizon Wireless should buy Sprint. Since then, Sprint’s market cap has dropped almost another billion.
What does Sprint need? A boss who can make important decisions about what to do with the company and its huge (but shrinking) subscriber base, without worrying about history or legacy. Should it try to grow by undercutting rivals and starting a price war? Should it shutter its Nextel walkie-talkie network? Should it keep building its cutting-edge WiMax network, or roll it into a JV with rival Clearwire? How can it compete with Apple’s iPhone, tied exclusively to rival AT&T (T)?
We imagine that a Mexican billionaire bidding for a U.S. phone company would be a politically charged issue, to say the least. But we’d love to watch the fireworks.
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