NO, SK Telecom is NOT Buying Sprint… But They Are Interested
This post was published 2 years 6 months 17 days ago which may make its actuality or expire date not be valid anymore. This site is not responsible for any misunderstanding.
Contrary to reports on other large websites, that shall remain nameless, SK Telecom is NOT going to buy Sprint. Here’s why:
SK Telecom is valued at roughly $18 billion, which is a third of Sprint value of $62 billion. SK Telecom simply doesn’t have the money to do make the bid alone. Sure, SK Teleom can solicit private funding but it would be hard, if not impossible, to gather more than $44 BILLION to make a bid for Sprint that shareholders would accept – and thats not including a premium.
However, I do believe that SK Telecom IS talking to Sprint but people are reading the tea leaves wrong. SK Telecom WANTS to be in the US market as illustrated in their MVNO with Earthlink – Helio. Now, I predict that SK Telecom will make a substantial investment into Sprint with some partners, potentially bringing the company into private ownership – a lesson learned from Alltel. That would greatly benefit Sprint by removing some major public scrutiny as well as the company can gain more control of their own destiny.
Now, we can speculate further that it could be possible that SK Telecom is talking with Sprint about a joint bid for the 700 Mhz spectrum that is planed to go up for public auction. Considering how cozy Google and Sprint have gotten over WiMax could this potentially setup a three way bid to create a new generation high speed network? Again, this is all speculation.
Sprint has been faring badly nowadays and the stock prices are not what they used to be some few years back. Sprint also completed the merging of a couple of other companies (including the big merge with Nextel) which although increased Sprint’s size, has taken quite a tole on its wallet. In addition, Sprint is slowly loosing its customers in favor of other cellular service providers. I think that albeit some challenges, this could turn out to be a successful venture.
Of course this will be a large shock to the American public, however I don’t think that this is going to be necessarily a bad thing. We could use some new ideas from the Asian market and bring some much needed change to Sprint. With SKT’s large success in the Korean, Chinese and the growing Vietnamese market, there is a significant chance that such a venture will be successful in the American cellular telecommunications market.