& cplSiteName &

Softbank to Pay $20B for 70% Sprint Stake

Michelle Donegan
LR Mobile News Analysis
Michelle Donegan
10/15/2012
50%
50%

Japanese mobile operator SoftBank Corp. has agreed to invest US$20.1 billion to acquire a 70 percent stake in Sprint Corp. (NYSE: S), the companies announced on Monday. (See Softbank to Buy 70% Stake in Sprint.)

The official word comes three days after Sprint confirmed reports that it was in talks with Softbank about an investment in the U.S.-based carrier. (See Sprint Confirms Softbank Talks.)

Of the total $20.1 billion investment by Softbank, $12.1 billion will be distributed to Sprint shareholders and $8 billion will be new capital that will go toward the strengthening of Sprint's balance sheet.

At a press conference in Tokyo on Monday, Sprint CEO Dan Hesse said: "This financial infusion gives us opportunities … that we haven't had since I've been here. This [deal] is pro-competition and pro-consumer because it makes Sprint a stronger number three to compete with the duopoly of AT&T and Verizion."

The boards of both companies have approved the deal, but now it is subject to shareholder and regulatory approval. Sprint and Softbank expect the transaction to be completed in the middle of 2013.

Following the transaction, Dan Hesse will continue as CEO of the newly created Sprint entity and Sprint's corporate headquarters will remain in Overland Park, Kansas.

However, the transaction does not offer clarity on Sprint's plans for Clearwire LLC (Nasdaq: CLWR), whose future was questioned when news of a potential deal with Softbank first emerged. According to Hesse, Clearwire is not specified in the terms of this deal.

"There are no elements in this agreement that require either party to enter into any new agreements with Clearwire or anyone else," he said.

Why this matters
Following the merger announcement between T-Mobile US Inc. and MetroPCS Inc. (NYSE: PCS), Sprint Nextel has looked vulnerable and disadvantaged in the U.S. market. But this tie-up with Softbank gives the third-largest U.S. operator a new lease on life.

The capital injection will give a boost to Sprint's Network Vision and Long Term Evolution (LTE) rollout. Sprint also stands to gain insight from Softbank's rollout of LTE and its smartphone learnings in the Japanese market.

For more



— Michelle Donegan, European Editor, Light Reading Mobile

(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
joset01
50%
50%
joset01,
User Rank: Light Beer
12/5/2012 | 5:19:08 PM
re: Softbank to Pay $20B for 70% Sprint Stake


What's the betting on Dan Hesse remaining CEO over time?

joanengebretson
50%
50%
joanengebretson,
User Rank: Light Beer
12/5/2012 | 5:19:05 PM
re: Softbank to Pay $20B for 70% Sprint Stake


I found it interesting that the merged Softbank/ Sprint would be tied with AT&T as the world's third largest wireless carrier -- behind China Mobile & Verizon.

joset01
50%
50%
joset01,
User Rank: Light Beer
12/5/2012 | 5:19:05 PM
re: Softbank to Pay $20B for 70% Sprint Stake


It is going to give them a lot more power vis-a-vis device selection and LTE roaming etc.

Featured Video
From The Founder
Light Reading is spending much of this year digging into the details of how automation technology will impact the comms market, but let's take a moment to also look at how automation is set to overturn the current world order by the middle of the century.
Flash Poll
Upcoming Live Events
November 30, 2017, The Westin Times Square
December 5-7, 2017, The Intercontinental Prague
March 20-22, 2018, Denver Marriott Tech Center
May 14-17, 2018, Austin Convention Center
All Upcoming Live Events
Infographics
SmartNICs aren't just about achieving scale. They also have a major impact in reducing CAPEX and OPEX requirements.
Hot Topics
Let's Talk About 5G Efficiency, Not Wacky Services
Iain Morris, News Editor, 11/21/2017
When Will 6G Arrive? Hopefully Never, Says BT's McRae
Iain Morris, News Editor, 11/21/2017
Top 5 Tech Turkeys 2017
Dan Jones, Mobile Editor, 11/22/2017
AT&T's Lurie Leaps to Synchronoss as New CEO
Dan Jones, Mobile Editor, 11/17/2017
Wireless Could Arrive Soon in NYC Subway Tunnels
Dan Jones, Mobile Editor, 11/20/2017
Animals with Phones
Live Digital Audio

Understanding the full experience of women in technology requires starting at the collegiate level (or sooner) and studying the technologies women are involved with, company cultures they're part of and personal experiences of individuals.

During this WiC radio show, we will talk with Nicole Engelbert, the director of Research & Analysis for Ovum Technology and a 23-year telecom industry veteran, about her experiences and perspectives on women in tech. Engelbert covers infrastructure, applications and industries for Ovum, but she is also involved in the research firm's higher education team and has helped colleges and universities globally leverage technology as a strategy for improving recruitment, retention and graduation performance.

She will share her unique insight into the collegiate level, where women pursuing engineering and STEM-related degrees is dwindling. Engelbert will also reveal new, original Ovum research on the topics of artificial intelligence, the Internet of Things, security and augmented reality, as well as discuss what each of those technologies might mean for women in our field. As always, we'll also leave plenty of time to answer all your questions live on the air and chat board.

Like Us on Facebook
Twitter Feed
Partner Perspectives - content from our sponsors
The Mobile Broadband Road Ahead
By Kevin Taylor, for Huawei
All Partner Perspectives