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Sprint Takeover Drama Is Far From Over

Wall Street Horse Races Pit Speculators against Consumers

A handful of influential parties are poised to make their voices heard in Sprint's takeover of Clearwire and SoftBank's offer to buy Sprint with just a week left until crucial shareholder votes.

Expect a frenzy of headlines and activity on Wall Street.

Dish needs to firm up billions in financing for its debt-laden proposal to buy Sprint. Sprint and SoftBank, meanwhile, may need to have bankers on speed dial given the prospect of rising takeover prices. Investors who speculated in Sprint and Clearwire shares when both companies were priced for failure aren't likely quit on some of the canniest merger arbitrage bets in recent years.

Influential proxy advisors, who are in the business of making clear recommendations to shareholders, unlikely to agree on the Clearwire and Sprint transactions.

What spectacle, and what a horse race.

Unfortunately for wireless consumers, who are probably only interested in industry consolidation for the prospect that also-rans such as Sprint and T-Mobile (TMUS) come out of the process better equipped to provide a reliable, low-cost alternative to premium-priced plans offered by AT&T (T - Get Report) and Verizon (VZ - Get Report), a frenzied conclusion could leave the industry with more debt, less cash and worse off.

Sprint and Clearwire's special committees have to answer to Dish's late entrance as an aggressor in the wireless industry and provide a clear basis to investors for Sprint and SoftBank's merger efforts or those of Dish.

While shareholders are certain to get their representation, hopefully interested parties also take account the best outcome for consumers.

One possibility is Dish uses its agitation of wireless consolidation as a means to negotiate a network sharing agreement with Sprint that could leave all parties better off. A network sharing agreement would also snuff out the bidding war that some on Wall Street are pulling for.

A hosting agreement with Sprint would allow Dish to build out its wireless ambition and create a credible new service bundle in the market to challenge AT&T and Verizon, according to Wells Fargo analyst Jennifer Fritzsche. Sprint, meanwhile, would get an additional revenue stream similar to a 15-year deal it negotiated with now-defunct wireless service LightSquared, which would have paid the carrier $9 billion for access to its network.

While Dish's proposals for Clearwire and Sprint would be seen as brinksmanship in such an outcome, it could leave all parties better off financially and the industry more competitive.

Sprint's takeover is the crucial element to a wireless industry reconfiguration that's poised to be one of the biggest consumer stories of this decade.

-- Written by Antoine Gara in New York

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