Home & Office

Softbank 'in talks' to buy Sprint stake for $12.8bn

Japan's third-largest cellular network Softbank is reportedly in advanced talks to acquire a majority stake in Sprint Nextel for $12.8 billion.
Written by Zack Whittaker, Contributor

Tokyo-based Softbank is reportedly seeking to buy a major slice of U.S. network Sprint Nextel, in a move that could cost the Japanese cellular network more than $12.8 billion, reported The Wall Street Journal citing a personal with knowledge of the negotiations.

The details of the supposed talks are not clear, though it is understood that Softbank is pushing for a majority stake in the U.S. cellular network. However, it is not clear how much Softbank will attempt to acquire.

It will be the first major acquisition for Softbank outside of Japan if the deal succeeds.

Sprint continues to piece its various technologies and networks together as it attempts to push into a higher market. The firm, currently the third-largest U.S. cellular network with around 56 million subscribers, has managed to recover from its downward spiral during the time it acquired Nextel in 2005.

Softbank said the reports were "based on speculation," and that the firm has "not announced anything." 

Earlier this month Softbank acquired rival eAccess for $2.3 billion as the firm attempts to expand into the 4G LTE space in preparation of launching the next-generation iPhone 5. All in all, it added more than 50 base stations to Softbank's network and increased its subscriber base by 39 million.

Exactly how this plays out will be interesting. We're truly in a global carrier network and Sprint is waking up, smelling the coffee and realizing that it's been left behind. Sprint is a wholly U.S. network and has no investments or stakes -- or anything for that matter -- outside the U.S. It's stuck in a market that isn't going to see Sprint's numbers rise dramatically any time soon, unless Verizon or AT&T somehow collapse in a ditch.

Last week, Deutsche Telekom agreed to merge its U.S. phone network T-Mobile USA with MetroPCS Communications for $1.5 billion. The merger will see the fourth- and fifth-largest cellular networks in the U.S. combine.

Meanwhile, Germany-based Deutsche Telekom has T-Mobile USA, while Verizon Wireless remains a joint venture between Verizon and U.K.-based Vodafone.

Reuters, however, highlighted a tidbit from Japanese media: a Sprint deal would make it easier for Softbank to acquire smartphones and other mobile devices. Where's the fun here: is it for Softbank in Japan using Sprint as bait, or is Sprint going to get anything out of this besides a cash boost that it could hardly decline?

While Softbank and Sprint may not be the most likely partners in the mobile space, Sprint is pretty much on its own. Without a global partner, it will remain stuck in the stagnant third place. 

Update at 9:10 a.m. ET: with comment from Softbank.

Editorial standards