Speculation of a Sprint bid for T-Mobile surfaced again Friday in the rapidly changing wireless industry.
An online report by the Wall Street Journal sent shares of both companies higher, though both declined to comment on the speculation.
The Journal said Sprint Corp. is “working toward a possible bid” for T-Mobile US Inc., possibly in the first half of 2014. Without citing specific sources, the report said that the deal could be worth $20 billion but that Sprint was focused as much on regulatory reception to a bid as the price tag.
Analysts agreed that federal regulators and anti-trust attorneys posed the biggest hurdles to a combination of the nation’s No. 3 and No. 4 wireless carriers. They’d need to be convinced that the merger would increase competition, was necessary to preserve competition, or even made sense after a round of deals recently reshaped the field of competitors.
“Neither Sprint nor T-Mobile should assume any proposed deal would sail through,” said Jeff Silva, an industry consultant at Medley Global Advisors. “A deal is possible, but it won’t be any walk in the park.”
The negotiations on a deal, if it comes to that, would be dominated by the carriers’ large foreign owners.
Tokyo-based SoftBank Corp. bought control of Overland Park-based Sprint last summer and infused it with badly needed funding as it rebuilds its national wireless network.
T-Mobile is owned principally by Germany-based Deutsche Telekom, which is viewed as being receptive to offers for its U.S. carrier.
Executives at both U.S. companies made clear at an industry conference in September that a combination made sense.
In separate speeches, T-Mobile’s Braxton Carter and Sprint’s Joe Euteneuer said a larger third national carrier would be a stronger competitor to industry giants Verizon and AT&T.
“I think Softbank and Sprint would love to sink their teeth into T-Mobile. It would transform them into a much larger and much stronger third-place competitor,” technology analyst Jeff Kagan said in an email Friday.
That’s not the same as saying a merger would increase competition in the wireless industry.
T-Mobile, for example, is the smallest of the four but has gained new customers in each of the last two quarters largely by luring them away from bigger rivals. The Bellevue, Wash., company attracted subscribers with an anti-business-as-usual marketing message and innovative phone upgrade and installment purchase plans for consumers.
Regulators are likely to see that as proof of competition in the industry’s current setup, which reflects a flurry of deals Washington approved.
T-Mobile was allowed to buy smaller carrier MetroPCS. Regulators allowed Sprint to buy its longtime network operator Clearwire Corp. AT&T also gained the OK to buy Leap Wireless, which operates under the Cricket brand.
Analysts have said Washington may want to see the companies play out those hands before agreeing to shuffle the deck and deal again.
Moreover, the Department of Justice had said it favored a four-player market when it blocked AT&T’s proposed acquisition of T-Mobile two years ago.
In its post, the Journal said that, according to its sources, Sprint was “studying regulatory concerns.”
Sprint shares climbed 28 cents, 3.4 percent, and ended the trading day at $8.43. T-Mobile shares surged $2.20, an 8.7 percent jump, to $27.64.