KDDI considered but passed on Sprint acquisition

KDDI considered but passed on Sprint acquisition

Summary: Japanese telco's president says company is "not stupid", has done various analyses and hence not worried about potential size advantage from rival Softbank's acquisition of the U.S. carrier.

TOPICS: Telcos, Networking

The number two telco in Japan, KDDI, said it had previously considered buying U.S. carrier Sprint, but chose to pass on the opportunity taken up by rival Softbank.

According to a Reuters report Wednesday, Takashi Tanaka, president of KDDI, revealed the company was approached by brokerages to buy Sprint but declined to participate in talks.

"Pursuing the size is one value, but that's Softbank's style, and we are different," another report by the Japan Times quoted him as saying.

His revelation comes just days after Japan's third largest telco Softbank announced it will acquire a 70 percent stake in Sprint for US$20.1 billion.

Tanaka added Softbank's latest move would not affect his company's strategy for overseas markets.

He also dismissed fears that the Softbank-Sprint alliance could spark a price war by using its new size advantage to procure handsets and network equipment more cheaply.

Major carriers already procure large amounts of handsets, so it is questionable how much they can exploit the size advantage, Tanaka said.

"We are not stupid; we've been carrying out various analyses," he added.

Rivalry between KDDI and Softbank, which both sell the Apple iPhone, has intensified over the past year, the Japan Times report said.

Until September 2011, Softbank was the only Japanese operator selling iPhone devices until KDDI said it acquired rights to sell the iPhone 4S launched in October that year.

Earlier this month, Softbank also said it will acquire domestic rival eAccess for US$2.3 billion, aiming to boost its available bandwidth and LTE (long-term evolution) services to compete with larger players KDDI and NTT Docomo.

Topics: Telcos, Networking

Jamie Yap

About Jamie Yap

Jamie writes about technology, business and the most obvious intersection of the two that is software. Other variegated topics include--in one form or other--cloud, Web 2.0, apps, data, analytics, mobile, services, and the three Es: enterprises, executives and entrepreneurs. In a previous life, she was a writer covering a different but equally serious business called show business.

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