Softbank to buy majority stake in Sprint? | webOS Nation
 
 

Softbank to buy majority stake in Sprint? 3

by Ryan St. Andrie Thu, 11 Oct 2012 7:40 pm EDT

Softbank to buy majority stake in Sprint?

As webOS users (and Palm OS users prior to that) most of us cut our teeth in the smartphone world on the nation’s third largest carrier: Sprint. As a matter of fact quite a large sum of us still actively use Sprint as our primary carrier despite their lackluster data speeds and confused 4G WiMAX network. So today when Sprint confirmed that they're discussing a "substantial investment" by Softbank (Japan’s third-largest network provider) we were “all ears” here at webOS Nation, if simply for nostaligia's sake. Sprint’s announcement is as follows:

Sprint (NYSE: S) today confirmed that it is currently engaged in discussions with Softbank regarding a potential substantial investment by Softbank in Sprint. Although there can be no assurances that these discussions will result in any transaction or on what terms any transaction may occur, such a transaction could involve a change of control of Sprint. Sprint does not intend to comment further unless and until an agreement is reached.

Reuters reports an anonymous source stating that this “investment” is to the tune of a hearty $12.8 billion dollars which would give Softbank approximately a 70% majority stake in Sprint. This could be good and bad for both companies. It is no big secret that Sprint has been bleeding money for years and has only shown marginal signs of improvement recently (certainly better than HP). So this investment could give Sprint the huge financial injection to get it’s currently anemic LTE network into full gear. Though that would come at the cost of being gobbled up by Softbank. On the other side of the fence, this will be a huge risk on Softbank’s behalf, as Sprint is so far behind AT&T and Verizon’s market share that they may never catch up.

No matter what happens we will be keeping our eyes on this story. Whether you’re a Sprint user or not a deal this big will undoubtedly shake up the US carrier game quite a bit. Just as Germany's trying to exit the US mobile market by merging T-Mobile USA into Metro PCS, Japan's trying to get in. This could get interesting.

Source: Sprint; Via Android Central

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3 Comments

Quick q:
What definition of "exiting" are y'all using wherein DT retains ownership of 74% of the new company and kills a competitor?
Maybe that new math..

The idea that has been floated around is that, this move will make tmobile a publicly traded company (since it is a reverse merger) and allow DT to sell its majority shares in a controlled manner allowing it to exit gracefully.

keep us sprint veterans informed on this