For the last two years a transition has been apparent between the various mobile phone carriers in the United States. On one end, AT&T and Verizon have seem extreme growth, together covering nearly 2/3rds of the current market share. On the other, Sprint & T-Mobile have been begging for growth, and stand as a far cry to the immense growth the two larger carriers have seen.
As a result, stagnation has become apparent in both T-Mobile and Sprint, but has been much more visible for the latter as the company, unlike T-Mobile, is publically owned and traded. However, that's about to change for the most part, as Japanese telecom company Softbank officially announces its bid to hold a majority stake in the 3rd largest wireless carrier in America for a substantial $20 billion.
This has the potential to change things for either the better or worse for Sprint, especially when you consider the company's uneasy status as a market contender in the wake of growing bandwidth usage and growing smartphone usage alike. Sprint, even today, gets a bad rap for buying Nextel 7 years ago, as the merger has since been a burden on the company, and offered little growth in profitable markets. To add insult to injury, Sprint's poor performance with WiMaX, and announcement to not acquire Clearwire continue to show Sprint having a hard time with generating profitable results from its new ventures. Sprint, floundering in its attempts to increase 4G coverage in the company, has been between a rock and a hard place for many years now.
But with Softbank, this may very well change. The CEO of Softbank, Masayoshi Son, is beleived to be the gamechanger here, as his mentality is to bring the Japanese ideology of mobility to America, specifically with faster data and higher quality service, is the crux of the new buy-out. While Dan Hesse will remain as CEO, Masayoshi Son has already made implications that he plans to bring, with the power of Softbank, much more powerful data services to Sprint in the coming years. The only question is if the FCC will allow the purchase and essentially allow Softbank to level the wireless playing field.
What do you think? Do you think the FCC will approve the purchase? Do you think Sprint will benefit from Softbank? Share your thoughts in the discussion!
