A merger of T-Mobile US Inc (TMUS.N) and satellite TV company Dish Network Corp (DISH.O) could force Sprint Corp (S.N) to pursue a deal or partnership itself.

T-Mobile and Dish are in early-stage merger talks, a source familiar with the matter told Reuters.

Dish’s trove of wireless airwaves, or spectrum, would turn No. 4 U.S. wireless company T-Mobile into a much stronger competitor to Sprint, the current No. 3. It also comes as bigger rivals AT&T and Verizon have been investing in strengthening their networks and looking to extract revenue from online video content in addition to wireless services.

“If Dish buys T-Mobile they’ll become a lot stronger, their spectrum portfolio will double and they will have a real competitive edge against the rest of the industry,” New Street Research analyst Spencer Kurn said.

Sprint is in the midst of a turnaround plan to stanch subscriber losses and improve its balance sheet. The company, which is sitting on excess spectrum of its own, has been burning cash to sign up subscribers and upgrade its wireless network.

It “is running out of good options,” Craig Moffett, an analyst with MoffettNathanson said.

Kurn and Moffett agreed on one route: Sprint itself could bid for T-Mobile.

Sprint abandoned just such a deal last year due to regulatory concerns. The question is whether it could find a way to try again, ideally waiting until after the 2016 U.S. presidential election, assuming a more business-friendly Republican president wins the White House.

Japan’s cash-rich SoftBank Corp (9984.T), which owns an 80 percent stake in Sprint, acquired the company with the hope of merging it with T-Mobile.

“If T-Mobile is acquired before they get that chance, Sprint’s in a world of hurt,” Moffett said.

SPRINT’S OPTIONS

Besides trying its luck again with a T-Mobile bid, heavily indebted Sprint could sell off its own spectrum assets.

With viewing habits shifting from television to online devices, the pay-TV and wireless industries are converging, and Sprint could also potentially partner with a cable company looking to enter the wireless market, analysts said.

Sprint representatives could not be immediately reached for comment.

A $48.5 billion merger of AT&T with Dish’s biggest rival DirecTV (DTV.O) is expected to receive approval with some conditions in coming weeks. Charter Communications Inc (CHTR.O) is seeking to remake the U.S. cable television industry by acquiring No. 2 cable company Time Warner Cable Inc (TWC.N) for $56 billion, after regulators rejected the bid by their biggest rival Comcast Corp (CMCSA.O).

“Sprint is going to need to do something following the recent M&A wave we’ve seen just over the last 12 months,” S&P Capital IQ analyst Angelo Zino said.

By hooking up, cable or satellite TV providers and wireless companies can pool resources and spectrum to scale up and also capture growth in the online video market.

Comcast could be a potential suitor for Sprint from the cable industry, but it may not have the appetite. Regulatory opposition led Comcast to drop a plan to buy Time Warner Cable, and it may not be ready for another fight yet, analysts said.

Another possibility may be to try to push T-Mobile aside and hook up with Dish. In 2013, Dish made a bid for Sprint, although it dropped out and SoftBank took a controlling stake.

The chance for a merger with Sprint could still be on Dish Chief Executive Charlie Ergen’s mind, New Street’s Kurn said.

“Ergen is a man who keeps his options open.”

(Reporting by Malathi Nayak; additional reporting by Greg Roumeliotis; Editing by Richard Chang)

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