Softbank buys Sprint - Know Your Cell

The Japanese firm Softbank officially let it be known that it plans to acquire 70 percent?of Sprint for a little more than $20 billion and the move could have shockwaves throughout the mobile industry. Let's take a look at what this move means for all the players involved.?

For Softbank, the move gives it a foothold in the United States, which is still the premium market for smartphones. More importantly, PC Mag points out?that all of the major players in the mobile space need to have a strong international presence in order to compete. This big bet by Softbank will give it better economies of scale whenit comes to negotiating prices for handsets, components and more.?

Softbank is known for making big bets and leveraging those into winners. It purchased the trailing Vodafone Japan in 2006 and was able to lead to the top of the market. The Softbank, Sprint deal will have to face regulatory approval but no one is really expecting any major issues.?

For Sprint, the deal gives it a few things it has desperately needed: cash and a competitive future. Sprint was by no means about to go bankrupt but its long-term debt situation isn't pretty and it needs a larger cash infusion to help with the rollout of its 4G LTE network, which is only in 24 citites.

Whether it's bad luck or mismanagement, Sprint has faced many challenges over the last few years. It's disasterous merger with Nextel set it back and the decision to roll out 4G WiMax instead of waiting for 4G LTE has clearly been a mistake. Sprint CEO Dan Hesse has been able to turn around its customer service issues but the carrier still trails AT&T and Verizon Wireless by at least 30 million subscribers.?

Softbank has already said that it wants to make Sprint's speeds faster but don't look for it to make a transition off CDMA technology to HSPA+ like the T-Mobile, MetroPCS entity. Instead, look for the new Sprint to make a big push with LTE, sunsetting its CDMA network in a few years.

Most importantly, what does the Softbank, Sprint deal mean for you, me and the average consumer? It's actually a little too soon to tell. We can only guess based on the released statements.?

"As we have proven in Japan, we have achieved a v-shaped earnings recovery in the acquired mobile business and grown dramatically by introducing differentiated products to an incumbent-led market," said Softbank Chairman and CEO Masayoshi Son, in a prepared statement. "Our track record of innovation, combined with Sprint's strong brand and local leadership, provides a constructive beginning toward creating a more competitive American wireless market."?

I take that to read that the new Sprint will definitely be keeping its unlimited plan, at least for the next few years. CNET points out?that the new Sprint would be the only major carrier in the United States to offer truly unlimited 4G data and the iPhone and that could definitely fit into the "differentiated products" category.

The bottom line: The Softbank deal with Sprint should lead to a more powerful third major wireless carrier which has more resources to roll out its 4G LTE network and offer differentiated devices. Look for Sprint to continue with its unlimited data plans.

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Source: http://www.knowyourcell.com/news/1634731/softbank_buys_sprint_what_it_means_for_you.html

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