Are Sprint and T-Mobile Eyeing a Team-Up?

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The U.S. wireless provider industry could soon become a heavyweight battle between three providers as Sprint Corp. (NYSE:S) mulls the prospect of bidding on rival T-Mobile US Inc. (NYSE:TMUS). But any potential merger would draw the attention of U.S. regulators, which explains why Sprint is moving cautiously.

Individuals close to the matter told The Wall Street Journal late last week that Sprint is currently studying the concerns of regulators with plans to launch a bid during the first half of 2014. The deal itself could end up being worth upwards of $20 billion, depending on Sprint’s intended stake in T-Mobile.

While a merger between Sprint and T-Mobile would create a worthy competitor to AT&T (NYSE:T) and Verizon Wireless (NYSE:VZ), it is also likely to attract huge attention from regulators who only two years ago nixed AT&T’s $39 billion acquisition of T-Mobile. According to the WSJ, the pursuit of a bid is aimed at gauging the response from regulators and deciding whether the situation warrants serious consideration.

Sprint’s efforts are being driven by SoftBank Corp.’s Chief Executive, Masayoshi Son, who acquired a controlling stake in Sprint last July and currently owns 80 percent of the wireless provider. At the same time, Deutsche Telekom AG, which owns about 67 percent of T-Mobile, is looking to possibly exit the market entirely, paving the way for Sprint’s pursuit.