Might Leap Wireless, the parent company of national wireless provider Cricket Communications, be the next potential acquisition for suddenly merger-hungry Sprint?
Overland Park, Kan.-based Sprint has been is puffing its chest since Japan’s SoftBank announced last month that it plans to buy 70 percent of the carrier for more than $20 billion. Since then, Sprint has announced an intention to buy the remaining half of Clearwire, and, just Wednesday, said it’s going to spend $480 million on U.S. Cellular assets in the Midwest.
Under the terms of the deal, nearly 600,000 U.S. Cellular customers in several states will join the Sprint family. That’s 10 percent of the Chicago-based company’s customer base. Pending regulatory approval, it will close sometime mid-2013.
The grab for valuable wireless spectrum is a big reason behind Sprint’s push for more assets.
Bulking up on spectrum assets is an important strategic objective for Sprint and its acquisition of U.S. Cellulars Chicago and St. Louis markets helps shore up the companys position in important cities,” noted Yankee Group principal analyst Ken Rehbehn, commenting on a Bloomberg BusinessWeek article. “In the aftermath of significant consolidation since PCS spectrum was auctioned in the 1990s, Sprint has limited remaining opportunities to expand spectrum positions in its core 1900 MHz PCS band. It was important that Sprint grab the opportunity to shore up is position in Chicago and this move accomplishes that goal.”
So what’s next for Sprint, which seems intent on making a run at market leaders Verizon Wireless and AT&T?
“Now, all eyes turn to Cricket Leap,” Rehbehn said. “Holding spectrum in a number of important urban markets, Cricket Leap is the next logical target for a SoftBank-empowered Sprint.”