SoftBank's (SFTBF.PK) history suggests an acquisition of Sprint (S -1%) would mean big things...

SoftBank's (SFTBF.PK) history suggests an acquisition of Sprint (S -1%) would mean big things for the U.S. mobile industry, notes Tero Kuittinen. Thanks to aggressive pricing, SoftBank managed to turn an also-ran Japanese carrier (the former Vodafone Japan) into the market's subscriber add leader shortly after acquiring it in '06, and has kept its lead since. Should AT&T (T) and Verizon (VZ), who seem happy to maintain premium pricing, be worried? (more)

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Comments (8)
  • Davidesand
    , contributor
    Comments (69) | Send Message
    Sprint for a number of years has been an "also ran" with it's terrible aqcuisition of Nextel, the inability to merge the systems, and overall poor quality. So what if it is acquired by SoftBank; are they going to take it further down the road of eroding margins while trying to improve service and quality. I think not.


    It's the old three legged seat issue. All any company has to offer, in simplistic terms, is price, quality, and service. No company has ever been able to offer all three simultaneously. Don't know about the Japanese, but users here will pay a premium for better service and better quality (nee new offerings in hardware and software). Don't see Sprint able to to that.


    I'm long on T...
    12 Oct 2012, 05:12 PM Reply Like
  • Headcoach
    , contributor
    Comments (419) | Send Message
    Some times with a M&A, comes new management. With new management comes fresh ideas and out of the box thinking. As for Hesse he inherited the P.O.S. and has done an incredible job bring it out of the gutter.


    Plus, I think Hesse pushes his team to think out of the box. This is why they are heading out of the hole. His long term vision is finally paying off and so will your investment.


    However, now that these talks are starting and the stock has pushed up a little, I am a little concern about the current price if this Softbank deal is only talk and no action.
    12 Oct 2012, 08:22 PM Reply Like
  • AggGrow
    , contributor
    Comments (210) | Send Message
    S was rocked under Forsee, but Hesse has proven to be a man of the internet age, and neither T nor VZN seem to be able to say the same. I think S is in the best position to lower pricing while maintaining superior margins AND customer service. If Softbank brings deep pockets to the party, I would be afraid - very very afraid - if I were in Sprints crosshairs.
    12 Oct 2012, 05:44 PM Reply Like
  • Retired Expat Investor at M...
    , contributor
    Comments (55) | Send Message
    Did some research about Softbank.
    They could undercut other Japanese carriers by using cheaper modem by Huawei, introducing ADSL and iPhone first, etc.
    These tactics do not work in USA.


    I do not feel the deal is not much different from Japanese Banks directly financing Sprint for the mobile cashflow.
    12 Oct 2012, 09:58 PM Reply Like
  • larry1135
    , contributor
    Comments (52) | Send Message
    I think Sprint has shown it self as the come back kid by addressing their previous problems. Once they are done with their network conversion it will be a much stronger company with a quality network.


    I'm long Sprint
    12 Oct 2012, 11:47 PM Reply Like
  • deercreekvols
    , contributor
    Comments (9849) | Send Message
    Anything to keep Verizon and AT&T from having a duopoly is a good thing for US customers. If Sprint can be the carrier that keeps these two from having high pricing and gives folks a choice, then what can be bad about this? Competition is the American way.


    I am long Sprint.
    13 Oct 2012, 03:21 PM Reply Like
  • Headcoach
    , contributor
    Comments (419) | Send Message
    I too am long on Sprint and Clearwire. However, please keep this in mind when you start to feel like you should jump ship.


    1. Softbank is using the same TD-LTE network as Clearwire.
    2. The TD-LTE has download speeds of 1.3 gbps.
    3. Sprint is now the 3 largest global carrier.
    4. Sprint will have the ability to have GLOBAL ROAMING!
    5. Sprint has been infused with $8B in cash to help build out the network
    6. Sprint Stockholders to Receive Total Consideration of $12.1 Billion in Cash and 30% Ownership in Newly Capitalized Sprint
    7. Sprint to Leverage SoftBank’s Experience in Deployment of LTE as Sprint’s Nationwide Rollout of 4G LTE Continues
    8. Through this transaction, approximately 55% of current Sprint shares will be exchanged for $7.30 per share in cash, and the remaining shares will convert into shares of a new publicly traded entity, New Sprint. Following closing, SoftBank will own approximately 70% and Sprint equity holders will own approximately 30% of the shares of New Sprint on a fully-diluted basis.
    16 Oct 2012, 12:12 AM Reply Like
  • young_patowan
    , contributor
    Comments (11) | Send Message
    Idk this feels like a yen play to me...


    Don't see enough synergies here. Sure, you both TD-LTE spectrum holdings, but S only has it indirectly through agreements with CLWR, of which they only have a 50.1% stake in, so they don't own" own the spectrum, they can just use it. Plus CLWR isbehind on their network deployment as well. Think the synergies stop at economies of scale in ordering antennas/equipment.


    Onw would assume the reconverts Softbank is floating Sprint immediately will be used to delever, but if Softbank wants to really push forward Network Vision, it's going to have to go to market... I mean who freaking wouldn't, their investment grade (for now) so I'm sure they'll lever up.


    Idk, may be better to play VZ as this one should take a while to gestate .
    24 Oct 2012, 12:25 AM Reply Like
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