SoftBank Owns Sprint - Now What?

By Doug Mohney July 23, 2013

Sprint completed its merger with SoftBank earlier this month. But how long will it take for Sprint to get moving again as underdog T-Mobile USA drives the agenda in the U.S. cellular market?

SoftBank has invested $21.6 billion to acquire control of Sprint, with $5 billion in new capital earmarked to "strengthen" Sprint's balance sheet.  That's a lot of cash in play under any circumstances, so parent SoftBank will be looking for forward progress and measurable concrete results.  

Talk has swirled round Sprint introducing aggressive pricing to undercut T-Mobile's offers, currently the best in the country. SoftBank CEO Masayoshi Son told the New York Times that the carrier would be aggressive "in technology, price packages, services on every front" while improving the network with investments of $16 billion over the next two years. 

Image via Shutterstock

How fast change might come remains to be seen, but time is of the essence. T-Mobile seems to be intent on rolling out a new pricing twist every six months or so, with its JUMP! (Just Upgrade My Phone) plan being the latest wrinkle. CEO John Legere looked like he was channeling a bit of Steve Jobs when he announced the ability to upgrade to a new phone at any time for any reason.

But T-Mobile hasn't been content with chipping away at the consumer market. The company is intent on scooping up enterprise business with flat rate international long-distance calling and leveraging its M2M and international ties with parent Deutsche Telekom -- assets that Sprint is hard pressed to match.

SoftBank may also need to evaluate the existing management at Sprint and its subsidiary Clearwire before it moves forward, opting to add some fresh faces at the executive level.  Sprint almost has a knack for picking the wrong technology and sticking with it far past its expiration date, while Clearwire appeared to do whatever it wanted despite Sprint's desire to turn up WiMax faster and in major cities. Deployment of HD voice on Sprint's 3G CDMA network, long promised, has been continually delayed since mid-2012.

Both Sprint and Clearwire use legacy technologies --3G CDMA and WiMax -- that occupy spectrum better used for LTE and LTE-Advanced. Moving customers off those networks and directly to LTE so the spectrum can be reformed has to be a priority over the next four years; it will likely take up to two years before all the new LTE gear is installed and customers are incentivized (i.e. offered a great deal) to jump onto the new network.

One thing is certain: Sprint is going to have to start moving faster or T-Mobile is going to over take it in short order.

Edited by Rich Steeves

Contributing Editor

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