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Retiring CEO Otellini steps up to bat for his partner

Sprint Nextel Corp. (S) finds itself in an unusual position.  The struggling third place carrier suddenly finds itself with not just one, but two large, highly attractive suitors vying for partial ownership in it.  Softbank Corp. (TYO:9984) struck first with a $20B USD bid last October.  Then came satellite TV superpower Dish Network Corp.'s (DISH)  $25.2B bid earlier this month.

Who should Sprint choose?  Shareholders are meeting June 12 to vote whether to finalize the Softbank deal; Softbank has graciously relaxed some terms of its deal to allow Sprint to seek information on the DISH bid.  But one of Sprint's top partners is already speaking out about who they want to see win the day -- and they're backing Softbank.

Intel Corp.'s (INTC) almost-retired chief executive Paul Otellini wrote a letter [PDF] to the U.S. Federal Communications Commission backing Softbank's bid over DISH's.  Addressing retiring FCC Chairman Julius Genachowski, he says that he recently traveled to Japan to meet with Softbank CEO Masayoshi Son who painted a "very compelling" vision of transforming Sprint into a high-speed LTE superpower.

He writes:
 
I simply wanted to add my name to the list of companies hoping that Softbank will be able to acquire Sprint, rather than Dish. Son-san’s vision to build a high speed competitive third national network is very compelling. We need this competition in the wireless space as the ATT/Verizon model is not giving that to consumers at this time. I just wanted you to know where I and Intel stand on this important matter.

According to Reuters, Intel is a key business partner of Softbank's.  While Intel also does a chunk of business with DISH, it appears to be firmly in Softbank's camp for this campaign.

Sources: FCC, Reuters



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RE: Needs a third player
By danjw1 on 4/30/2013 12:28:01 PM , Rating: 1
You mean the Apple that is losing the smart phone race? Do you mean the Apple that isn't able to innovate fast enough, that is needs to sue its competition with dubious patents? Is that really the Apple that you think could turn around Sprint?


RE: Needs a third player
By Samus on 4/30/2013 1:15:47 PM , Rating: 2
Apple wouldn't just partially buy sprint. The Softbank and Dish offers aren't complete buyouts, they're for a majority share (39%) or controlling share (51%) and neither are Apple's cup of tea.

A complete Sprint purchase would cost Apple at least $50 billion. I don't see them blowing half their warchest on an unprofitable cellular carrier.


RE: Needs a third player
By Samus on 4/30/2013 1:17:31 PM , Rating: 2
My bad, I see they are actually both majority share offers (70%/72%)


RE: Needs a third player
By mcnabney on 4/30/2013 3:23:15 PM , Rating: 2
Not even close. Sprint shares are around 7 right now and there are 3 billion outstanding shares. Apple could offer $24B in cash for the whole company and still be paying 12% over current price.

And buying a network makes some sense. Apple is losing their ability to charge extremely high prices for their devices, so choosing a carrier would help out quite a bit. Sprint wouldn't be the best choice though.

Merging with Verizon and buying out Vodaphone's minority stake would be the best platform for Apple.


RE: Needs a third player
By seamonkey79 on 4/30/2013 6:51:53 PM , Rating: 3
Oh I hope they don't do that, I don't want to have to find another carrier while waiting for Verizon to keep up with everyone else :-\


RE: Needs a third player
By BRB29 on 4/30/2013 3:22:33 PM , Rating: 2
$50 billion is much less than half their warchest


RE: Needs a third player
By BRB29 on 4/30/2013 3:44:19 PM , Rating: 2
You can say apple is losing marketshare which is true but misleading. Their shipments have gone up, not down. The smartphone market has expanded and apple did not keep up with the growth. Apple is in much better shape than any other company right now and has little to worry about.

Apple could buy Sprint to turn it into their service provider and have a top to bottom product/service vertical business strategy. The risk is probably too high for them to make the deal.


RE: Needs a third player
By maugrimtr on 5/2/2013 5:56:30 AM , Rating: 2
Saying that Apple is losing market share is not misleading - it is a fact. They are losing market share. Since no market is of infinite size, this means they are continuing to lose potential sales to Samsung/HTC/etc and moving over time towards an ever small slice of the market.

Shareholders get nervous when they see Apple losing out to its competitors. As for the size of the market, smartphones overtook feature phones for the first time this year. We're half way there already! Despite smartphones having explosive growth, bear in mind that the overall mobile phone market grew at 4% in 2012.

So, you see, there is a race. As smartphone penetration moves from 50% towards 100% (bearing in mind 100% won't happen - poor people can't afford smartphones and there are a lot of them on the planet!), Apple's future stable/mature market revenue depends on its market share. The less it captures now, the more revenue it loses to competitors in the long term. Its exploding growth must eventually be limited by the overall phone market, i.e. a possible 4% per annum.

ref: http://www.itweb.co.za/index.php?option=com_conten...


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