Sprint: Yes, we're talking to Softbank about 'substantial investment'
Sprint on Thursday confirmed that it was talking to Softbank about a "potential substantial investment" in the wireless provider.
In a statement, Sprint added that there are no assurances that the talks will result in a deal. Softbank said earlier that it didn't comment on rumors and speculation. Update: The Wall Street Journal is reporting that "substantial" could equate to a 70 percent stake in Sprint. Softbank also wants control of Clearwire, which is Sprint's technology partner.
The speculation is that Softbank is pondering a $12.5 billion investment in Sprint, the No. 3 U.S. carrier. Sprint needs to bolster its balance sheet as it takes on a LTE network upgrade. Meanwhile, T-Mobile plans to acquire MetroPCS to beef up its U.S. presence. Verizon and AT&T remain the big dogs in the U.S. market.
Should the Softbank-Sprint transaction occur it's clear that wireless providers are increasingly thinking global. Softbank is a key wireless player in Japan and Sprint would give it access to a U.S. market that isn't aging as rapidly as its home turf.
In addition, Verizon Wireless is already a joint venture between Verizon and Vodafone. Toss in T-Mobile, owned by Deutsche Telekom in Germany, and MetroPCS and it's clear that this wireless game is going global in a hurry.
Bottom line: The U.S. is an attractive market for international carriers, who may reside in either economically or demographically challenged markets.
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