Sprint Corp shares were up 3% Tuesday morning after reports surfaced that the fourth-largest wireless service provider in the U.S. was holding talks with Comcast Corp and Charter Communications about a partnership.

Sprint, which is controlled by Japan-based SoftBank Group, is in a period of two-months of exclusive talks with Comcast and Charter, while putting its talks of a merger with T-Mobile US on hold through the end of July, said sources close to the situation.

An industry analyst said that he estimated hard cost synergies of between $35 billion and $40 billion from a possible deal involving the companies.

However, there are economic and strategic benefits that could be far greater for the parties involved than just the cost savings.

The analyst added that the move clearly was a negative for Verizon Communication, AT&T and T-Mobile.

Shares of T-Mobile were down over 4.5%, while those for Comcast dropped by 1.2% and Charters’ were unchanged.

Analysts with JPMorgan said if the ongoing talks failed, the negotiating position of Sprint could be weakened if it were to start its merger talks again with T-Mobile.

Charter and Comcast announced in May their own wireless partnership in an attempt to offset the attrition as younger viewers are shunning high-price subscriptions for less expensive options online.

Both companies have mobile virtual network operators or network resales agreements in place with Verizon.

An MVNO does not own a network, but rather rent capacity from operators that are established to sell to their customers, and usually at low prices because of smaller overheads, with inexpensive distribution through convenience stores or over the internet.

Talks of a possible MVNO agreement involving Sprint are not that surprising, said on analyst to his clients.

The current agreement the two cable companies have with Verizon restricts each to their own footprint, while a new deal involving Sprint might allow them to offer national service, say industry analysts.

Comcast and Charter were negotiating equity stakes in early talks with Sprint as part of their possible agreement.

An equity investment that is a minority stake was under discussion but that might not be part of a final deal, said sources.

Comcast and Charter might also look to acquire Sprint together, but that is not likely, said the sources.

On the news of the ongoing private negotiations, Verizon stock dropped 1.1%, while stock at its rival AT&T was down just 0.7% Tuesday morning in early Wall Street trading.

Get Analysts' Upgrades and Downgrades Daily - Enter your email address below to receive a concise daily summary of analysts' upgrades, downgrades and new coverage with MarketBeat.com's FREE daily email newsletter.