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Report: SoftBank Eyes T-Mobile Acquisition

Tokyo –Sprint majority owner SoftBank plans to buy a majority stake in T-Mobile through Sprint with the apparent intent to combine the two carriers, Japan’s Nikkei newspaper reported. 12/26/2013 04:51:00 AM Eastern

Tokyo –Sprint majority owner SoftBank plans to buy a majority stake in T-Mobile through Sprint with the apparent intent to combine the two carriers, Japan’s Nikkei newspaper reported.

The plan would a merged entity on a better competitive footing against Verizon Wireless and AT&T, the report said.

 SoftBank is said to be in the final stages of negotiations with T-Mobile parent Deutsche Telkom to buy a majority of T-Mobile shares through Sprint as soon as the spring for about $19 billion. SoftBank plans to borrow money for the acquisition, Nikkei said.

 If T-Mobile and Sprint are combined, SoftBank would hold a 60 percent to 70 percent stake in the new entity, Nikkei said. The new entity would have a combined subscriber base of about 100 million, slightly behind AT&T and Verizon, the U.S. market’s two largest carriers with about 110 million subscribers each. A merger would generate economies of scale as well as enable the combined carrier to purchase handsets and equipment at a lower cost.

 With the acquisition, SoftBank’s total combined Japan and U.S. subscriber bases would increase to about 140 million from about 100 million and make it the world’s second largest carrier by revenues behind China Mobile.

Any proposed acquisition would need the approval of the Federal Communications Commission and Department of Justice. Although the FCC opposed T-Mobile’s acquisition by AT&T, Nikkei said SoftBank “apparently grew emboldened” by the Justice Department’s approval of the American Airlines-U.S. Airways merger.