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  (Source: Bloomberg)
1 trillion yen could earn Japan's fastest rising star ownership of a sinking U.S. firm

The shakeups in the U.S. mobile industry look to continue, with surprising news from Sprint Nextel Corp. (S).  Sprint had been repeatedly mulling an acquisition of MetroPCS Communications Inc. (PCS) before Deutsche Telekom AG (ETR:DTE) reached a deal to partially acquire MetroPCS and merge it with its struggling subunit T-Mobile USA.

Following the collapse of its potential MetroPCS pickup, Sprint has announced that it itself is actually on the verge of being partially or fully acquired by a top Japanese carrier.  Sprint writes, "Sprint today confirmed that it is currently engaged in discussions with Softbank regarding a potential substantial investment by Softbank in Sprint."

Softbank Corp. (TYO:9984) has been on a steady rise in its home nation over the last half decade, starting with a leveraged buyout of Vodafone Group Plc.’s (LON:VOD) Japanese arm (Vodafone co-owns Verizon Wireless in the U.S.).  That moved propelled it into third place.

In some ways Softbank resembles a Japanese version of AT&T, Inc. (T) with its aggressive acquisition strategy.  Like AT&T, it also was boosted in the years since 2007 by an exclusivity arrangement on Apple, Inc.'s (AAPL) iPhone, with both companies losing exclusivity in 2011.

Sprint iPhone
"Unlimited" service vendor Sprint could have a new owner. [Image Source: Sprint]

Just last week Softbank announced a major acquisition of rival eAccess, a move which would make it Japan's second largest carrier and boost its number of LTE base stations by 50 percent.  The purchase -- which is paid for in stock -- is worth $1.84B USD, according to Reuters, or $2.3B USD, according to The New York Times.

Reportedly its purchase of Sprint shares could run higher -- much higher.  ReutersNikkei, and The Wall Street Journal report that Softbank is targeted a full acquisition priced at approximately 1T ¥ (~$12B USD).  The Sprint release does not mention the extent of the acquisition or the in-progress price.

It's unclear what kind of real synergy could be realized by the tie-up with the Japanese carrier, but at the very least Softbank could bring a culture of success to Sprint.

Sources: Sprint, The WSJ, Nikkei, Reuters

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Will this do some good?
By nafhan on 10/11/2012 4:27:25 PM , Rating: 2
I'd be very happy about this if I thought that this purchase would actually be disruptive to the US wireless market. I have a feeling, though, that they're just interested in cashing in on Americans massively overpaying on cell service.

RE: Will this do some good?
By Shig on 10/11/2012 5:16:55 PM , Rating: 3
The big 3 is better than the big 2 I guess.

RE: Will this do some good?
By tayb on 10/11/2012 5:35:13 PM , Rating: 2
Virgin Mobile uses the Sprint network. $35/month for 300 minutes, unlimited texting, and unlimited data. No contract. Americans are just really really bad at math, planning, and saving.

RE: Will this do some good?
By Manch on 10/11/2012 6:59:46 PM , Rating: 2
That's because they're owned by Sprint. A few years ago I had a Helio phone(It was very cool back in the day). They were bought out by Virgin Mobile who then released the Helio 2(it was actually a worse phone), and they were then acquired by Sprint to serve as there pre-pay arm. Sprint,in order to keep me on there network let me break my contract with Helio/Virgin Mobile if I signed a two year with them. So I got me a Galaxy. Man I miss the keyboard. Sprint with there free roaming made it an easy decision since I could also use verizons network. Even better theres an awesome app for Android that allows you to force your phone into roaming if you're in an area with crappy sprint coverage.

RE: Will this do some good?
By mcnabney on 10/12/2012 10:15:18 AM , Rating: 2
You weren't on Verizon's network. The two companies haven't co-roamed for a long time.

RE: Will this do some good?
By kmmatney on 10/12/2012 3:00:27 AM , Rating: 2
My wife is still paying $25 for that same plan, although VM sent here a letter saying that that the plan wasn't really "unlimited", but it wouldn't matter for the amount of data she uses.

RE: Will this do some good?
By nafhan on 10/12/2012 9:51:21 AM , Rating: 2
Ah, yes, the Sprint network! I could pay $35 a month to not be able to use my phone. :( Seriously, no reception on Sprint where I live, and as much as I wish it was not the case, Verizon's my only option if I want to be able to use my phone.

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