Charter Communications turns away Sprint’s long-standing proposal for merger

The reports on Sprint Corp’s exclusive merger with Charter Communications had the telecom and media fraternities buzzing of late. However, after several weeks of apparent discussions regarding the deal, a new report has come to the fore, which suggests that the latter has rejected a possible merger with Sprint, which otherwise could have created a new entity controlled by SoftBank. Charter revealed that it would stay with its existing wireless reseller Verizon Communications Inc, rather than swap to the one with Sprint.

Sprint, the fourth largest wireless carriers company has been eager to collaborate with Charter since a while now, to create a communication and media behemoth, which in turn would help it lock horns with AT&T, Verizon, and T-Mobile. This merger would have created a one-stop shop for customers looking for mobile services and internet. It would have also formed a stronger footing in creating the infrastructure required for 5G wireless technology.

Charter is the second largest US cable company after Comcast, and shares a good mobile virtual network operator (MVNO) relation with Verizon Communication, the numero uno wireless carrier company of the United States. In the early months of this year, Verizon, encompassing a better network than Sprint, had also expressed its interest in taking over Charter. In the event that the proposed acquisition would have borne fruit, Verizon’s partnership would have benefited both, Charter and Comcast in rolling out their wireless plans to customers, given that USA’s top wireless carrier has strong MNVO agreements in place.

In the meantime, Sprint had also allegedly been discussing a possible merger with its rival, T-Mobile. Japan’s Softbank Group, which controls Sprint, till date, remains quite interested in merging Sprint with USA’s another wireless carrier, T-Mobile - controlled by Germany's Deutsche Telekom AG.

The biggies of wireless telecommunication carriers market such as Verizon, AT&T, T-Mobile, and US Cellular have been joining forces with one another, given the high penetration of smartphones and internet access in the region. Estimates claim the American belts to account for more than 34% of the overall market share, subject to the fact that the region may witness rigorous advancements in wireless technology. The merging of companies like Sprint and Charter in this scenario could have offered a full suite of telecommunication services to customers, and would have resulted in a head-to-head competition with the tariff packages sold by phone giants Verizon and AT&T.

The closing of Charter’s window has strongly paved the way for Sprint to resume its discussion with T-Mobile or other partners as it would create a bigger wireless carrier merger to take on larger competitors.