Sprint now in the hands of Japan’s Softbank after $20 Billion Deal

In the latest cellular business news of incomprehensible proportions, most of Sprint has been purchased by Softbank for $20 billion. That amount scores the Japanese company 70% of Sprint shares, which are currently valued around $5.70 each.

A deal of this size represents signs of life for Sprint, which posted a $1.4 billion loss in the previous quarter. It could be that this kind of monetary injection is exactly what they need in order to bolster that 4G LTE network and become competitive with the likes of AT&T and Verizon… That could be the case, or Softbank just chose to partner with the wrong U.S. carrier. One has to wonder what kind of potential they saw that prompted the big move, and could it be that we’ll see a big Sprint comeback? Is there even room for that sort of comeback given the prominence of AT&T and Verizon? As an aside, AT&T is now left as the only carrier completely U.S. owned.

So what can $20 billion get you in this industry? Sprint comes with about 55 million subscribers—a pretty decent foothold in the U.S. market for Softbank… As for hardware, Sprint is supplied by Ericsson AB, and they’ve publicly committed themselves to purchasing millions of iPhones over the course of the next few years in another bid to become competitive… Even so, some analysts don’t see any of this being enough to keep Sprint afloat in the long term.

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Devin Wieland

 

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