Michael Finneran
Michael F. Finneran, is President of dBrn Associates, Inc., a full service advisory firm specializing in wireless and mobility; services...
Read Full Bio >>

Michael Finneran | October 15, 2012 |


Softbank to Invest $20 Billion for 70% of Sprint

Softbank to Invest $20 Billion for 70% of Sprint The investment should give Sprint some breathing room as it shuts down its aging Nextel iDen network while rolling out LTE.

The investment should give Sprint some breathing room as it shuts down its aging Nextel iDen network while rolling out LTE.

Hot on the heels of the announcement of the planned merger between T-Mobile and Metro PCS, Sprint and Softbank announced the latter will invest $20 billion for a 70% share in the number 3 US wireless carrier. As the deal is structured, Softbank will pay $8 billion to buy newly issued Sprint stock at about $5.25 a share. It will also buy $12.1 billion of existing stock from investors at $7.30 a share. Sprint's stock had risen 14% since the deal was first disclosed on Thursday, and it had closed at $5.73 Friday. CEO Dan Hesse will remain as at the helm.

Sprint has lost money in each of the last 19 quarters, and the cash infusion should be welcome; the company is currently holding $21 billion in debt, some of which is set to mature next year. In the meantime, Sprint is involved in a $7 billion network upgrade they term Vision, but it is still behind Verizon and AT&T in its LTE rollout.

Given its smaller market share, the deal is not likely to raise the concerns we saw last year when AT&T attempted to merge with T-Mobile. Indeed, many analysts had been predicting some consolidation among the smaller operators. According to Strategy Analytics, Sprint has roughly 55 million subscribers versus around 110 million for Verizon and 105 million for AT&T. The combined T-Mobile/Metro PCS should have about 45 million, so Sprint will retain its number 3 position in the US market.

Softbank's chief executive, Masayoshi Son, is an Internet entrepreneur who got into the mobile business in Japan buying Vodafone's Japanese arm in 2006. The company is now poised to become Japan's second-biggest wireless service provider after NTT DoCoMo. Up until the release of the iPhone 4s, Softbank was the only Japanese provider to offer the iPhone; KDDI now sells it as well.

Sprint has always been one of the more creative mobile operators. Its Mobile Integration service allows a direct MPLS connection from an enterprise PBX to Sprint's mobile network, with the ability to ring calls to the user's desk and mobile phones simultaneously. At Enterprise Connect last spring, Sprint announced they would offer Cisco's Hosted Collaboration Service (HCS) under the name Complete Collaboration.

The investment from Softbank should give Sprint some breathing room as it shuts down its aging Nextel iDen network while rolling out LTE. There is also speculation that Sprint may increase its holdings in mobile broadband provider Clearwire; Sprint currently owns 48% of the company. From the sounds of the announcement, it seems that Sprint will continue to operate independently, and Mr. Son is more interested in making an investment in the US market to offset stagnating growth in the Japanese market.

At the announcement Mr Son said, "It could be safe if you do nothing, and our challenge in the U.S. is not going to be easy at all. We must enter a new market, one with a different culture, and we must start again from zero after all we have built. But not taking this challenge will be a bigger risk."


Enterprise Connect Orlando 2017
March 27-30 | Orlando, FL
Connect with the Entire Enterprise Communications & Collaboration Ecosystem

Stay Up-to-Date: Hear industry visionaries in Keynotes and General Sessions delivering the latest insight on UC, mobility, collaboration and cloud

Grow Your Network: Connect with the largest gathering of enterprise IT and business leaders and influencers

Learn From Industry Leaders: Attend a full range of Conference Sessions, Free Programs and Special Events

Evaluate All Your Options: Engage with 190+ of the leading equipment, software and service providers

Have Fun! Mingle with sponsors, exhibitors, attendees, guest speakers and industry players during evening receptions

Special Offer - Save $200 Off Advance Rates

Register now with code NOJITTEREB to save $200 Off Advance Rates or get a FREE Expo Pass!

April 5, 2017

Its no secret that the cloud offers significant benefits to enterprises - including cost reduction, scalability, higher efficiency, and more flexibility. If your phone system and contact center are

March 22, 2017

As today's competitive business environments push workforces into overdrive, many enterprises are seeking ways of streamlining workflows while optimizing productivity, business agility, and speed.

March 8, 2017

Enterprise IT's ability to innovate is critical to the success of the business -- 80% of CIOs agree. But the CIO role has never been more challenging than it is today, with rising operational respo

March 23, 2017
Tim Banting, of Current Analysis, gives us a peek into what the next three years will bring in advance of his Enterprise Connect session exploring the question: Will there be a new model for enterpris....
March 15, 2017
Andrew Prokop, communications evangelist with Arrow Systems Integration, discusses the evolving role of the all-important session border controller.
March 9, 2017
Organizer Alan Quayle gives us the lowdown on programmable communications and all you need to know about participating in this pre-Enterprise Connect hackathon.
March 3, 2017
From protecting against new vulnerabilities to keeping security assessments up to date, security consultant Mark Collier shares tips on how best to protect your UC systems.
February 24, 2017
UC analyst Blair Pleasant sorts through the myriad cloud architectural models underlying UCaaS and CCaaS offerings, and explains why knowing the differences matter.
February 17, 2017
From the most basics of basics to the hidden gotchas, UC consultant Melissa Swartz helps demystify the complex world of SIP trunking.
February 7, 2017
UC&C consultant Kevin Kieller, a partner at enableUC, shares pointers for making the right architectural choices for your Skype for Business deployment.
February 1, 2017
Elka Popova, a Frost & Sullivan program director, shares a status report on the UCaaS market today and offers her perspective on what large enterprises need before committing to UC in the cloud.
January 26, 2017
Andrew Davis, co-founder of Wainhouse Research and chair of the Video track at Enterprise Connect 2017, sorts through the myriad cloud video service options and shares how to tell if your choice is en....
January 23, 2017
Sheila McGee-Smith, Contact Center/Customer Experience track chair for Enterprise Connect 2017, tells us what we need to know about the role cloud software is playing in contact centers today.