They're said to be looking at a stock-for-stock deal that would leave T-Mobile owner Deutsche Telekom in control of the combined company, with T-Mobile's colorful CEO John Legere running operations. But these sources did stress that negotiators are still weeks away from making any deal final.
The election of President Donald Trump coupled with the conclusion of the FCC's incentive auction several months ago has given rise to a flurry of speculation regarding potential M&A activity in the mobile market.
Still, a merger between T-Mobile and Sprint - the nation's No. 3 and No. 4 wireless carriers, respectively - would face severe regulatory scrutiny. CEO Time Hoettges also said earlier this year that "purely theoretically, we can see several advantages to consolidation and convergence", in the USA market.
A deal would make sense on multiple levels.
Over three years ago, SoftBank abandoned talks to acquire T-Mobile for Sprint amid opposition from US antitrust regulators. The brokerage firm put the odds of such a deal gaining regulatory approval at 50%-50%.
Sprint's shares rose 6.8 percent, while T-Mobile's shares were up almost 4.6 percent in morning trade. The latter scenario seems unlikely given how long the two have been flirting, but sooner or later, one company may finally say enough is enough.
"Still the synergies are large enough that we continue to believe that at least an attempted merger is a matter of when, not if", MoffettNathanson analysts observed. "We can see a path forward, but ultimately it comes down to whether the respective parties can".