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SoftBank officially buys 70 percent stake of Sprint for $20 billion


News by Andrew Kameka on Monday October 15, 2012.

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Japanese carrier SoftBank has reached a deal to purchase a controlling interest in U.S. carrier Sprint. The 1.57 trillion yen (US $20.1 billion) transaction will make SoftBank one of the world's largest wireless internet providers.

SoftBank says that it will pay $12.1 billion to Sprint shareholders, and then invest an additional $8 billion to strengthen Sprint's balance sheet and mobile network. The $8 billion will allow Sprint to spend money to upgrade its existing 3G network and expand 4G LTE coverage. SoftBank will lend its expertise in LTE deployment and provide additional resources to help Sprint better compete against bigger rivals. Sprint is currently the third largest wireless company in the United States, but SoftBank is confident that it can increase the network's market share based on its track record of entering "mature" markets and finding success.

Nothing will change for Sprint in the next few months because the company must continue operating as an independent entity until the SoftBank transaction closes. The deal, which is subject to the approval of Sprint shareholders and U.S. regulators, is expected to close by mid-2013.

The deal also has no direct impact on Sprint's relationship with Clearwire. Sprint is the largest shareholder in Clearwire, which has faced financial difficulties in recent years that required an injection of more Sprint cash. It's unclear how the SoftBank-Sprint merger will affect Clearwire, but SoftBank has stated:

"The transaction does not require Sprint to take any actions involving Clearwire Corporation other than those set forth in agreements Sprint has previously entered into with Clearwire and certain of its shareholders."

source: Sprint

 
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Andrew Kameka
Andrew is MobileBurn.com's managing editor. He is based in Miami, Florida.

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