Sprint to be Bought by Japan's SoftbankSprint is a massive player in the global telecom game, but it might not be for much longer. The telecom giant is confirmed to be in talks with Softbank, telecom from Japan. The estimated price? $12 billion.
The rumors first started flying this morning, when the Wall Street Journal, Reuters and several other smaller news sites all got a hold of confidential information about the talks. Then, just a little bit ago, the two companies confirmed it with a press release. Not much information was given, but the press release did confirm that the two companies are in talks.
This would be a major win for Softbank. The telecom is in desperate need of more bandwidth, and several of Sprint's international trunk lines run right under them. Buying Sprint could give Softbank a quite robust international network.
This is actually the second acquisition that Softbank has made in the week, earlier acquiring eAccess, one of its rivals, for $1 billion dollar deal. That purchase added 50% more LTE towers to its networks, drastically improving the LTE coverage and speeds the company is able to provide. That's enough to move it from the third-largest LTE provider to the second. Further in the past, Softbank bought out Vodaphone's Japanese wing back in 2006. That is what brought Softbank into the top three.
This new deal would give Softbank 70% of Sprint, more than enough to control the company. The remaining 30% will continue to be publicly traded. There will also be a cash injection for Sprint, possibly helping the company compete in an environment increasingly dominated by two major domestic players: AT&T and Verizon.
I'm not sure what this means for Sprint in the long run, but hopefully in the short term it means that the company will be brought back into fighting shape. Sprint has always been an underdog, but it has brought a fair amount of innovation to the phone market. It'd be a shame to see the company get folded.