Sprint's SK Telecom Talks: Partnership, No Merger (S)

Reuters sources vehemently denied yesterday that Sprint Nextel, the troubled no. 3 wireless carrier, is in talks to sell itself to Korean wireless giant SK Telecom. But Sprint (S) and SK Telecom (SKM) are talking. What about? A “strategic partnership to develop new handsets and services,” according to the WSJ.

What’s the point? Korean mobile phones and mobile Internet services are more sophisticated than ours, so in theory, SK could help Sprint tailor cooler phones and more useful Internet services. The payoff: In theory, Sprint could finally start attracting wireless customers away from other carriers — instead of the other way around — and could potentially make more money per month from its subscribers by selling mobile Internet service to more of them. WSJ:

The companies have discussed the idea of SK Telecom making a minority investment in Sprint, but they aren’t discussing an outright merger, the people said. Last fall, Sprint rejected a $5 billion investment offer by SK Telecom and Providence Equity Partners.

Any investment resulting from the current talks would likely be smaller, the people said. Sprint has a market capitalisation of $26 billion, roughly double SK Telecom’s market capitalisation of $13.8 billion.

See Also:
CNBC: SK Telecom Eyeing Sprint Nextel, Again
New Sprint Treo Good News For Palm’s Margins, But Who’s Gonna Buy It?
Sprint’s iPhone Knockoff Samsung Instinct Selling Well — Really

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