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Softbank’s Sprint bid a risky investment

Japanese carrier Softbank’s bid to acquire a 70 per cent stake in US operator Sprint is an audacious deal that could transform or hobble the companies depending on how it plays out. For Softbank it is a huge bet that it’s better to invest $ 20bn in the third-largest US mobile operator rather than its home market of Japan where it is the third-largest mobile operator behind NTT DoCoMo and KDDI.

While it’s true that Softbank’s investment could pay off by making Sprint significantly more competitive, it’s also true that there’s a huge risk that the deal will not go to plan and could weaken both companies at critical times. For example earlier this month Softbank announced plans to acquire rival eAccess for $ 2.3bn in a bid to become the second-largest mobile operator in Japan, and adding a huge international deal on top of that increases the risk that management will be so stretched that neither deal will go to plan.

Sprint is in the middle of implementing two huge bets that are costing billions – its network modernisation program and acquiring the iPhone – so this will be a third huge bet on top of those, which will make it hard to pull off and risks diverting attention from Network Vision and the iPhone. However the third bet does have the significant virtue of helping to pay for Sprint’s first two multi-billion dollar bets. In addition Softbank has expertise that will help Sprint as it deploys LTE as part of its Network Vision network modernisation, and with the iPhone, given Softbank was the first operator to launch the device in Japan.

On the other hand if Softbank and Sprint can pull this off it could transform Sprint into a company that has the scale and financial resources to compete head-to-head with Verizon Wireless and AT&T, which dominate the US mobile market with 33 per cent and 31 per cent market share, respectively, compared to Sprint with 17 per cent and T-Mobile with 10 per cent. While the deal would not directly increase Sprint’s market share in the US, it would make it part of a group with some 90 million subscribers in Japan and the US, compared to Sprint’s 56 million subscribers in 2Q12. That in turn means Sprint will have the scale and financial firepower to compete more aggressively with Verizon Wireless and AT&T, which had 105 million and 102 million subscribers respectively in 2Q12.

In particular the deal should give Sprint the financial strength to develop a better and more integrated strategy for Clearwire, possibly by moving from majority to full owner of the company. Clearwire has a valuable portfolio of 2.5GHz spectrum which has not been fully exploited due to a lack of investment, which can now change given Softbank will make $ 8bn in capital available to Sprint as part of the deal, in addition to $ 12bn which will go to Sprint’s shareholders. Clearwire also plans to move away from WiMAX and launch TD-LTE network year, a technology which Softbank launched in Japan earlier this year. Similar to Clearwire, Softbank is using 2.5GHz spectrum for TD-LTE which could generate momentum for the technology and economies of scale for equipment and devices.

Sprint could also use its new financial strength to move for MetroPCS, which it wanted to buy earlier this year, and which T-Mobile USA has recently announced plans to acquire. But this may be a step too far given Sprint has already made three huge bets that are all major challenges on their own, so probably can’t handle a fourth. – telecoms industry news, analysis and opinion

Softbank Confirms $20 Billion Takeover Bid for USA Based Sprint

USA based Sprint has agreed to by bought by Japan’s Softbank in a US$ 20 billion deal which will also secure the funds the company needs to continue its network upgrade programme. Click here for more.


Sprint LTE Plus Data Speeds Up 28% in Seven Months

Can you hear that? Sprint (NYSE:S) customers are having a better network experience than ever with national average download speeds up 28 percent in seven months, according to Ookla Speedtest Intelligence data. Ookla data also shows Sprint now ranks #1 for the fastest average download speed in 15 cities such as Atlanta, Denver, Indianapolis, Salt Lake City and Seattle.1 Click here for more.

Cellular News

Sprint Takeover Bid for T-Mobile Looking Less Likely

USA based Sprint is reportedly cooling on a possible bid for its smaller rival T-Mobile as regulators are said to be worried about the deal. Click here for more.


Sprint Launches C3PO andndash; Open Source NFV/SDNandndash;Based Mobile Core Reference Solution

Sprint (NYSE: S) today announced the availability of C3PO (Clean CUPS Core for Packet Optimization – CUPS: Control andamp; User Plane Separation), an open source NFV/SDN-based mobile core reference solution designed to significantly improve performance of the network core by providing a clean, streamlined, high-performance data plane for the packet core. Click here for more.

Cellular News

Sprint taps Pogoplug for cloud storage and backup

Sprint has tapped cloud storage vendor Pogoplug to offer cloud storage and backup to its mobile cutomers

Sprint has tapped cloud storage vendor Pogoplug to offer cloud storage and backup to its mobile cutomers

US telco Sprint announced a partnership this week with cloud storage service provider Pogoplug that will see Sprint offer its customers free cloud storage as part of their mobile services package.

Sprint said that beginning January 27th iPhone and Android users will be able to download the Pogoplug app and receive 5GB of free storage for backing up media and documents, with the option to upgrade to unlimited storage for $ 4.99 per month.

“Whether our subscribers have one device or several devices, everyone craves the flexibility to access all of their content from virtually anywhere at any time,” said Mike McRoberts, director of product development at Sprint.

“Our new relationship with Pogoplug creates a seamless experience for our customers. With unlimited cloud storage, our customers can easily back up, access and share all their photos and videos from almost anywhere, eliminating the headaches around running out of space or losing an important memory,” he said.

Sprint’s move to offer free cloud storage comes at a time when most American mobile telcos already have similar offerings in place. AT&T announced its Locker cloud backup service in November 2012, and Verizon launched its Verizon Cloud offering in April last year.

Cloud storage is seen by some telcos to be a very strategic area, not just as a “value add” for consumer markets but enterprises as well. Telstra and Teleconfica are among the leading investors in enterprise storage and collaboration company Box, which largely caters to business customers and has agreements in place with operators like EE and Deutsche Telekom to offer the services to enterprises.

This article originally appeared on Business Cloud News.

Sprint Debuts Gigabit Class LTE in New Orleans

Sprint, Qualcomm, and Motorola first to debut Gigabit Class LTE deployment in the U.S. on a live commercial network Click here for more.

Cellular News

Sprint Looking to Revive the Nextel Brandname

USA based Sprint may be about to resurrect its dormant Nextel brandname as part of a wider revamping of its marketing efforts this year. Click here for more.


Stephen Bye, CTO, Sprint: “Our focus on the customer is paying dividends”

Stephen Bye, CTO and VP technology development, Sprint Nextel

Stephen Bye is the CTO and vice president of technology development & strategy for Sprint, the third largest carrier in the US. He is delivering the opening keynote on Day Two of the LTE North America 2012 conference taking place on the 14-15th November 2012 at the Fairmont Dallas Hotel, Texas. He gives us details on Sprint’s progress on LTE and how it continues to differentiate itself from its rivals.

What have been the main developments for you over the last six months with regards to LTE?

Our focus continues to be on improving the customer experience by modernising the network through the Network Vision program. We are utilizing the 800MHz and 1900MHz spectrum for enhanced CDMA coverage and performance with support for LTE. Our recent launch of LTE has been the culmination of substantial development over many months by many teams within Sprint and working together with our key strategic vendors: Ericsson, Alcatel-Lucent and Samsung.

Sprint launched 4G LTE in more than fifteen cities including Atlanta, Dallas, Houston, Kansas City and San Antonio. We expect to bring approximately 12,000 Network Vision sites on air by the end of 2012 and to complete the majority of the roll-out in 2013.

In addition, Sprint launched its first four 4G LTE smartphones: Galaxy Nexus, LG Viper 4G LTE, HTC EVO 4G LTE and Samsung Galaxy S III and announced the upcoming Motorola Photon Q 4G LTE.

With 10MHz of bandwidth for LTE how long do you think you can remain committed to unlimited data?

Sprint is the only US. national wireless carrier to offer truly unlimited data for smartphones while on the Sprint network with no throttling and no overages. We feel that this offer is what our customers are looking for – simplicity, convenience and great value. These plans have been very successful, and we expect to continue to offer them to customers. Sprint has no current plans to offer tiered data pricing for smartphones. In addition, we are the only U.S. national postpaid carrier with an unlimited data plan for the iPhone.

How else do you feel you can differentiate yourselves from the larger players in the market?

Our focus is on our customers and we walk the talk – it is all about customer experience.

For several years now, improving the customer experience has been one of three primary areas of strategic focus for Sprint (the other two being building the brand and generating cash). Our focus on the customer is paying dividends. For instance, since the first quarter of 2008, calls per subscriber to customer care have been reduced by approximately 46 per cent. And we achieved an all-time low level of calls per subscriber to Customer Care in 2Q 2012.

Sprint is number one among all national wireless carriers for customer satisfaction according to results from the 2012 American Customer Satisfaction Index. In addition to ranking first among national wireless carriers, Sprint was also the most improved company in customer satisfaction, across all industries, during the last four years, according to the survey. Also, since the beginning of 2011, Sprint and its prepaid brands Boost Mobile and Virgin Mobile USA have earned nine J.D. Power awards, including awards for customer service satisfaction and purchase experience satisfaction.

Your network is unusual in that you run multiple technologies. What are the timescales for running each one and what kind of challenges does it throw up?

Through Network Vision, Sprint is simplifying its network structure. Network Vision is rolling out LTE and enhanced 3G service nationwide and expects to largely complete it by the end of 2013 — two years sooner than originally scheduled. At the heart of Network Vision are multi-mode base stations consolidating multiple network technologies into one seamless network with the goal of increasing efficiency and enhancing network coverage, call quality and data speeds for customers across the United States.

At the same time, we are decommissioning the iDEN network. We are pleased with our retention of Nextel platform subscribers. In the second quarter of 2012, 60 per cent of customers who left the iDEN network went to the Sprint postpaid platform.

While we continue to deploy CDMA and LTE using the PCS spectrum, we are repurposing the 800MHz spectrum that was being used for iDEN, to support CDMA and LTE. We are also working closely with Clearwire to integrate and support LTE within the 2.5GHz spectrum. We are converging towards support for CDMA and LTE.

There has been successful downward pressure on roaming charges within the EU – is roaming outside of the US an issue for you?

As we look to the future with the increasing availability and coverage with LTE, there are some technical challenges related to LTE roaming. One relates to the number of bands being deployed and the physical limitations that can be supported on a device. The service provider industry will need to work collaboratively to harmonize and consolidate the number of bands defined.

Is there enough innovation occurring in the mobile network industry? Can you provide some examples?

I continue to be surprised at the level and the extent of the creativity in this industry, the many other business models it enables and the value which is unlocked and created.

The challenge with many new innovations with an eye towards future success in the mobile industry is the lack of a sustainable operating business model. Many start-ups look to achieve a quick return on investment through an acquisition and this approach is often inconsistent with our business model where we are looking beyond quick hit deals.

The LTE North America conference is taking place on the 14-15th November 2012 at the Fairmont Dallas Hotel, Texas. Click here to register your interest. – telecoms industry news, analysis and opinion

Sprint and Dish to Test Fixed Wireless Internet Services

USA based networks, Sprint and Dish have announced plans to jointly develop and deploy a fixed wireless broadband service. Click here for more.