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Dec 13 (Reuters) - Sprint Corp is mulling a takeoverof smaller rival T-Mobile US and could make a bid inthe first half of 2014, according to a report in The Wall StreetJournal.
But the story on the Journal's website, which cited unnamedpeople familiar with the matter, also said that Sprint had notyet made a decision and was mulling the regulatory implications.
Such a deal would be controversial and could be blocked byU.S. regulators. It is also possible that satellite TV providerDish could compete with Sprint for the asset as DishChairman Charlie Ergen has previously cited a T-Mobile merger asa potential option for Dish, which is seeking to expand intowireless.
Sprint, which is 80 percent owned by Japan's SoftBank, declined to comment and representatives of T-Mobile,which is majority owned by Deutsche Telekom, were notimmediately available for comment. Dish declined to comment.
Sprint has been interested in combining with T-Mobile foryears and while it is still interested, it is not currently intalks with the company, a person familiar with the matter saidon Friday.
That person said that Sprint believes neither Sprint norT-Mobile can compete effectively against the market leadersVerizon Wireless and AT&T Inc in the long term andthat a combination could bring significant cost savings andrevenue growth opportunities.
Top executives from both Sprint and T-Mobile US havepublicly argued that more consolidation is needed in the U.S.wireless market and that the creation of a stronger rival to thetop two operators would help promote competition.
T-Mobile US CFO Braxton Carter told Reuters in Septemberthat a Sprint/T-Mobile deal would be the "logical ultimatecombination."
But a tie-up between the No. 3 U.S. mobile provider Sprintand No. 4 ranked T-Mobile could run afoul of U.S. regulators.
When they blocked No. 2 U.S. operator AT&T's proposedtakeover of T-Mobile US in 2011, antitrust regulators said thatthe market needed four national competitors.
Shortly after the report on Friday, consumer advocate FreePress was already gearing up to do battle against such a deal.It urged the U.S. Federal Communications Commission and theJustice Department to carefully scrutinize this deal and how iteffects "consumers and their wallets."
"The public doesn't need fewer competitors and fewer choices- not when the wireless market already has so littlecompetition," a statement from Free Press said, adding: "Thepublic will get nothing good out of this deal."
T-Mobile US was struggling to compete at the time of itsattempted merger with AT&T.
But this year, the company has regained some ground withsome unusual and competitive offers that appear to be winningover consumers and forcing bigger rivals to follow in itsfootsteps.
One telecom regulatory expert who asked not to be named was"dubious" that regulators would approve a Sprint/T-Mobile deal.Citing recent comments from the Justice Department and FCC, theperson said that it looks like "it would be a extremelydifficult deal" to get through.
T-Mobile shares closed up nearly 9 percent, or $2.20, at$27.64 on New York Stock Exchange just after the story wasissued, but pulled back slightly in late trade. Sprint sharesended up 28 cents, or 3.43 percent, at $8.43 and rose to $8.70in after-hours trade.
