LOS ANGELES — Sprint Nextel Corp., left behind in the latest wireless consolidation, is in talks with one of Japan's largest cellphone service providers for a possible takeover that could help turn around the No. 3 U.S. carrier.
Sprint said Thursday that Softbank Corp. is considering a "substantial investment" in the company. The deal would give Sprint much-needed financial support to build out its high-speed LTE network and better compete in a market dominated by Verizon Wireless and AT&T Inc.
With more than 56 million customers, Sprint was expected to make a move after last week's announcement that Deutsche Telekom's T-Mobile and MetroPCS had agreed to merge. If approved, that deal would create the nation's fourth-largest carrier with 42.5 million subscribers. The new T-Mobile would be focused on price-sensitive, pay-as-you-go customers.
Many analysts said the T-Mobile-MetroPCS merger was a threat to Sprint, which appeared to be caught in the middle without a strong business niche. They surmised that the carrier — which had tried to take over MetroPCS earlier this year — would quickly try to broker its own consolidation deal to improve its position in the market.
Some analysts expected Sprint to make a counteroffer for MetroPCS, but instead it entered talks with Softbank.
Sprint provided few details on the talks. Reports said the Japanese cellphone service provider was considering buying a 75 percent stake in the company in a deal that could exceed $12.8 billion. "Although there can be no assurances that these discussions will result in any transaction or on what terms any transaction may occur, such a transaction could involve a change of control of Sprint," the Overland Park, Kan., company said in a statement. "Sprint does not intend to comment further unless and until an agreement is reached."
With a big investment, Sprint could speed up its build out of its 4G LTE network. Cellphone carriers are in the midst of an industry realignment and are scrambling to set up faster networks across the country. In September, Sprint said it had launched 4G LTE in 24 cities and planned to make it available in more than 100 cities in the coming months.