The US telecom giant Verizon Wireless has won the backing of its partner Vodaphone to put in a bid for its rival company Sprint. Sources close to the deal have said that Verizon has been studying a potential mobile deal for 18 months.
The announcement comes just days after industry reports said that US wireless operator Sprint had plans for a multi million pound merger with competitor Nextel.
Current trade speculation suggests that if Sprint and Nextel merge then the combined company would be worth $70 billion dollars and have around 39 million subscribers, making it the third largest player in the US mobile market (see Sprint And Nextel Deny Merger).
The high profile merger would be likely to impact overall US ad expenditures, according to Merrill Lynch. The newspaper market in particular would be affected since Sprint and Nextel are both heavy newspaper advertisers, with more than half of their media spend in the medium. Sprint was the fourth largest local and national newspaper advertiser in 2003.
According to Merrill Lynch, if Nextel and Sprint combine then newspapers would feel the pain of the companies inevitable reduction in ad spending.
If Verizon Wireless were to successfully make a bid for Sprint then it would become the largest mobile operator in the US, taking over from Cingular Wireless. However, it could be days or even weeks before Verizon makes any bid for Sprint, leaving the path open for other mergers.
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