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July 17, 2008

According to various media sources late yesterday, Sprint Wireless is apparently in talks with SK Telecom to form some sort of a partnership.

The two companies are analyzing the opportunity to develop new handsets and wireless services, according to the Wall Street Journal.

Sprint currently has about 53.1 million subscribers, but the wireless company has suffered several quarters of major financial and subscriber losses.

As a direct result of all this, Sprint stock has lost more than half of its value in the past twelve months.

The ongoing talks fall short of an acquisition or merger by potentially having the South Korean operator make a minority investment in the U.S. operator.

The discussions are still strictly in preliminary stages, but this didn't prevent Sprint's stock to jump more than 9.3 percent to $9.05 on the news.

SK Telecom’s stock fell almost 3 percent, with some investors feeling as though the partnership would demand even higher infusions of fresh new capital.

As it was reported on numerous occasions before, this isn’t SK Telecom’s first effort to work with Sprint. In November 2007, it teamed up with private equity firm Providence Equity Partners to offer $5 billion for Sprint, but Sprint rejected the offer.

Now SK Telecom may be looking to shore up its U.S. investments which have seemingly gone south.

Two years ago, it launched the Earthlink MVNO venture Helio, which targeted college students. It was only able to get about 170,000 subscribers. In June, Helio then merged with Virgin Mobile USA.

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Source: The Wall Street Journal.