Broomfield-based Level 3 Communications Inc. has had talks with Sprint Nextel Corp. about combining long-distance networks, according to The Wall Street Journal.
Discussions between the telecommunications companies have been held in recent weeks, the story published Wednesday said.
Level 3 and Sprint declined to comment.
“Unfortunately, I don’t have anything to add to the story,” Skip Thurman, Level 3’s vice president of corporate communications, told The Denver Post.
A joint venture involving Sprint’s long-distance network has been discussed, the Journal story said.
The two telecom firms also could choose “a less-ambitious commercial partnership such as network sharing,” the article said.
Level 3 operates a long-haul fiber-optic network, which provides service primarily to wholesale customers such as television networks and large websites, and metro fiber networks in various urban centers.
The Journal said unnamed sources who are familiar with the situation called the talks “very preliminary” and that “a deal may not materialize.”
Sprint isn’t interested in selling the long- distance division and would want to retain at least 51 percent ownership in any venture with Level 3.
Level 3 has been handcuffed by more than $6 billion in debt, incurred mostly from acquisitions of rivals.
It posted a $132 million loss in the first quarter this year.
said prospects for a deal between Level 3 and Sprint are slim because “the numbers don’t add up.”
“It’s no surprise the company would be considering some strategic options, but its financial woes, namely its debt, would be a heavy burden for any joint venture to carry,” said.
The value of Level 3’s extensive fiber-optic network wasn’t helped Monday when Denver-based Qwest abandoned an attempt to sell its long-haul fiber network.
Qwest, which had sought bids of $2 billion to $3 billion, said there was “significant interest” but determined the network was more valuable as part of the company.
Level 3 shares closed up 20 cents, 18 percent, at $1.33 Wednesday after the Journal report. Sprint fell 8 cents, 1.6 percent, to $4.87 per share.
Ann Schrader: 303-954-1967 or aschrader@denverpost.com
