Sprint, Clearwire May Be Sold to Softbank, Japan's No. 3 Carrier

Sprint has gone from buyer to seller. After talks of its interest in MetroPCS, Sprint and partner Clearwire may be purchased by Japan carrier Softbank, say reports.

Sprint is in "advanced talks" with Softbank, Japan's third-largest wireless carrier, which is interested in buying the United States' No. 3 carrier, according to a number of reports citing unnamed people familiar with the matter.

The deal is likely to exceed $13 billion, according to The Wall Street Journal, which added that it was unsure whether Softbank would buy all of Sprint or a two-thirds stake.

On CNBC's "Squawk Box," David Faber reported Oct. 11 that the deal would also include Sprint's longtime partner Clearwire, which was the first to offer U.S. consumers 4G speeds through WiMax technology but now, like Sprint, is in the process of transitioning to Long Term Evolution (LTE) technology.

Softbank first entered into talks with both Sprint and T-Mobile this summer, looking to put together a deal that would combine the U.S. carriers with funding help from Softbank, according to Faber's report. That deal ultimately fell apart, however, when German carrier Deutsche Telekom, T-Mobile's parent company, decided that it would create a carrier of a size that was unlikely to pass federal antitrust scrutiny.

Softbank's main motivation, Faber continued, "appears to be their interest in spectrum. And spectrum overall, not just controlled by Sprint, but also by its partner Clearwire. From what I'm hearing, part of this deal also would involve the purchase of Clearwire by Softbank."

Just days ago, Sprint's board reportedly met to discuss whether to try and stop a deal between DT's T-Mobile and No. 5 U.S. carrier MetroPCS by trying to merge with the latter itself. After talks between Sprint and MetroPCS in February, Sprint's board voted against a deal; but now, in a better financial position, with its stock price much improved since the start of the year, and faced with the prospect of a combined T-Mobile and MetroPCS, which would threaten Sprint's share of the prepaid market, it reconsidered.

Buying Sprint would also give Softbank a hand in the U.S. market—a motivation said to also be a driver in DT's pursuit of MetroPCS. In 2011, the European carrier was ready to leave the U.S.—it spent nine months in limbo, as AT&T tried to urge U.S. regulators, ultimately unsuccessfully, to allow it to purchase T-Mobile from DT, making its fears of a Sprint-T-Mobile merger well-founded.

DT's purchase of T-Mobile "shows it is committed to investing to improve its scale and strength in the U.S. market, after its attempt to exit the U.S. last year by selling T-Mobile USA to AT&T was blocked by regulators," Mike Roberts, a principal analyst with Informa Telecoms & Media, said in an Oct. 3 research note. However, Roberts added, "DT will need to do more in the future, given that even after the acquisition of MetroPCS it will still have less than half the market share of the two dominant players."

In an Oct. 11 report, Wells Fargo Securities analyst Jennifer Fritzsche, said Bloomberg, wrote that Sprint "represents the only way for a potential new entrant to get a national presence immediately in the U.S."

Softbank, Bloomberg added, could provide Sprint with needed funding—neither its late support for the Apple iPhone nor its LTE rollout has come cheap—and "shift the balance of power in the U.S. telecommunications industry at a tumultuous time."

Softbank was started in 2006 by billionaire Masayoshi Son, who purchased Vodafone's Japanese business unit. It is also the parent company of Yahoo Japan, and according to The Journal last year saw profits of $4 billion on revenue of $41 billion.

CNBC's Faber added that by his understanding, Softbank will purchase a majority stake of Sprint leaving "a small public stub."

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