Sprint Corporation (NYSE:S) is moving toward a possible bid for rival T-Mobile US Inc (NYSE:TMUS), the Wall Street Journal said Friday. If the giant telecom deal can jump through various regulatory hoops, the merger of the third- and fourth-largest U.S. carriers would leave the U.S. wireless market dominated by three big companies.

People familiar with the matter said Sprint is studying regulatory concerns and could launch a bid in the first half of 2014. But the company hasn’t yet made the final decision.

While the merger -- which could be worth more than $20 billion depending on the size of the stake in T-Mobile that Sprint tries to buy -- would create a sizable competitor to industry leaders Verizon Communications Inc. (NYSE:VZ) and AT&T Inc. (NYSE:T), it would likely face tough scrutiny from antitrust authorities.

Two years ago, the Justice Department shot down AT&T’s $39 billion deal to buy T-Mobile. The concern was that a merger could leave consumers with fewer choices and higher price tags.

Softbank Corp (TYO:9984), which bought control of Sprint earlier this year, is looking to grow its U.S. presence. Deutsche Telekom AG (ETR:DTE), which owns about 67 percent of T-Mobile U.S., is thinking about pulling out of the U.S. market.

Together, Sprint and T-Mobile would have close to 53 million postpaid subscribers. Verizon Wireless currently has about 95 million and AT&T has about 72 million.