Sprint Chairman Masayoshi Son Renews Effort to Buy Out T-Mobile
NEWS ANALYSIS: Sprint's Chairman Masayoshi Son has launched a public relations campaign aimed at overcoming government resistance to its plan to buy out smaller rival T-Mobile.The other shoe has dropped. A series of news reports leaking out of Japan and Germany indicate that Deutsche Telekom has reached at least a tentative agreement to sell most of T-Mobile US to the Softbank and merge it with Sprint. This likely explains the appearance of Masayoshi Son, the billionaire owner of Japanese telecommunications company Softbank and chairman of Sprint, at the Code Conference May 27 to 29. Son used the conference as a platform to launch his public relations campaign that appears to be aimed at gaining public support for his merger quest. Why a PR campaign? Probably because a proposal by Sprint and Softbank earlier in 2014 to buy out T-Mobile was rebuffed by the U.S. Department of Justice and the Federal Communications Commission, which indicated that it was unlikely that such a merger would win regulatory approval. This should be no surprise to Son. It wasn't that long ago that AT&T attempted to buy T-Mobile and only to pay Deutsche Telekom billions of dollars in breakup fees and spectrum when it was forced to withdraw its buyout offer in November 2011.
The reason: reducing the top-four carriers to three carriers was seen by both the Justice Department and the FCC as bad for competition. Since then, T-Mobile has been the very definition of competition and, in the process, has forced its larger rivals to lower prices, eliminate some contracts and be more responsive to customer needs.