SoftBank announces 201B proposal for the acquisition of Sprint

first_imgIt seems like every major US carrier, save for Verizon Wireless, has been involved in an attempt to fundamentally change the wireless landscape as we know it today. After the failed attempt to purchase T-Mobile by AT&T, it became clear that change was coming one way or another. Now, right on the heels of T-Mobile merging with MetroPCS, Japanese carrier SoftBank has announced a proposal to acquire Sprint for over $20 billion dollars.Pending a Sprint shareholder meeting and an FCC antitrust evaluation, there will be a “New Sprint” sometime in mid-2013 that is powered by SoftBank. The Japanese carrier will buy $8B in new shares from Sprint and $12.1B in shares that already exist in order to gain a 70% stake in the company. If the shareholders reject the proposal, or if SoftBank is unable to raise the funds in time, there will be termination fees on both sides of the deal. Additionally, if another company comes along with a better offer for Sprint, there would be termination fees against Sprint for accepting.What does this mean for Sprint subscribers? One of the immediate benefits of the acquisition would be the $8B geared towards building out the LTE network and enhancing the overall quality of the Sprint network. During the announcement of the proposal, CEO Dan Hesse noted that he was excited to learn from SoftBank’s successful LTE deployment in Japan. On several occasions, LTE network tests done in the US and Japan have found the networks here to be downright sluggish in comparison. While Sprint is behind in releasing their LTE network, the company had already been preparing their networks to be capable of rapid upgrade from LTE r9 to the more capable r10 deployment.This New Sprint will cause the competition here in the US to become further heightened, especially if Sprint keeps their Unlimited plans around. On a global scale, SoftBank would quickly jump to being one of the largest carriers in the world. Here in the US, Sprint is still securely in the number three slot and has been for quite awhile. It would take an incredible shift in the ecosystem for Sprint to usurp either of the top two carriers in the US, but it seems like they now have a strong backer to help make that happen.via Vergelast_img

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