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T-Mobile Soars on Comcast Speculation

T-Mobile stock was up nearly 4% in early trading Wednesday on reports in the German press that Comcast was in talks with the parent of the fourth largest U.S. wireless carrier. But sources familiar with the cable company’s thinking say Comcast has no interest in acquiring the carrier.

T-Mobile stock was up about 3.8% ($1.46 each) to $40.31 per share in early trading Wednesday. The stock lost some of that ground in later trading – it was priced at $39.93 each, up 2.8%, around noontime.

Whether Comcast, fresh off its decision to abandon its $67 billion merger with Time Warner Cable over regulatory concerns, is ready to test the deal waters again, reains to be seen. According to German magazine Manager Magazin,  and later Reuters, the No. 1 U.S. cable operator is one of a handful of potential suitors holding discussions with T-Mobile parent Deutsche Telekom about a possible deal. Earlier this month, reports said that satellite TV service provider Dish Network was lining up bank financing for a possible T-Mobile bid.

According to Manager Magazin, DT management would prefer a Comcast deal because it has deep enough pockets to make an offer to buy all T-Mobile shares. A Dish deal could require that DT retain a small ownership stake in the company, an outcome that according to reports management finds unattractive.

Whether a Comcast purchase would create regulatory problems remains to be seen. Comcast does not currently offer cellular service, so a combination would not remove a competitor – one of the sticking points in past T-Mobile merger attempts with AT&T and Sprint that were rejected by regulators. T-Mobile is the fourth largest wireless carrier in the country with about 56.8 million customers, according to its first quarter results.

T-Mobile has been the source of much merger speculation and its owners are motivated to sell. But according to one person familiar with the company’s thinking, Comcast iss “not interested” in acquiring the wireless carrier.

That sentiment seemed to be reflected in Comcast’s stock price – shares were up slightly (31 cents each or 0.5%) to $59.19 per share in early trading and hovered around htat level into the afternoon.

While buying a mobile carrier wouldn’t be out of the question – Comcast had owned a portion of Sprint PCS back in the early 1990s but sold its stake in 1999 and it has experience running cell companies – Comcast already has an MVNO agreement with T-Mobile rival Verizon. And the cable giant has no wireless spectrum – it sold it for about $3.9 billion in 2012 to Verizon as part of the agreement that brought the MVNO deal.  Dish, which has been accumulating wireless licenses for several years, has a large swath of spectrum that could be appealing to T-Mobile.

Comcast officials declined comment.