This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Verizon Sniffing Around Sprint

Verizon (VZ - Get Report), the nation's largest phone company, is now taking a closer look at Sprint (FON), amid a rash of merger dealings across the telecom industry.

People close to the Verizon camp say the big telco has started a so-called due diligence process at Sprint. The sources describe the work as at the "fact finding" and information-gathering stage, with no formal discussions under way.

Like fellow Bells BellSouth (BLS) and Qwest (Q - Get Report), Verizon has reached a critical turning point for its business strategy, thanks largely to SBC's (SBC) $16 billion bid for AT&T (T - Get Report) Monday. The proposed merger would thrust SBC into a truly national market, for the first time pitting the San Antonio telco against its regional Bell peers.

A representative for Verizon declined to comment. Sprint's CFO Bob Dellinger said in an interview Thursday that the company was "excited about what we are doing with Nextel," adding, "that's where our focus is." In December, Sprint and Nextel (NXTL) agreed to a $30 billion merger of equals.

Industry observers say it's consolidation time and all the players are exploring their contingency plans and counterstrike options.

"I think in Verizon's case, they are being pushed," says Telecom Pragmatics analyst Sam Greenholtz. "I don't think they are ready yet, but they have to look at players like Sprint -- they don't have any choice."

The timing isn't exactly perfect for Verizon. The phone giant is spending billions on a massive fiber optic network expansion and a similarly ambitious wireless Internet upgrade -- even as it tries to reduce its $36 billion debt. It is saddled with a cumbersome power-sharing arrangement with U.K. telco Vodafone (VOD) in the hard-charging Verizon Wireless joint venture.

Nonetheless, the walls are arguably closing in a bit on the New York telco.

According to a report in The Wall Street Journal Thursday, Denver-based Qwest is discussing a deal with MCI (MCIP), the No. 2 phone and data service provider to big businesses.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG
Q $64.93 0.53%
T $33.40 -0.96%
VZ $49.65 -0.88%
AAPL $125.01 -0.63%
FB $78.28 0.93%

Markets

DOW 17,841.98 -86.22 -0.48%
S&P 500 2,080.15 -9.31 -0.45%
NASDAQ 4,919.6440 -19.6830 -0.40%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs