Son Wants Sprint to Fight the ‘Real Fight’ With AT&T and Verizon
SoftBank (SFTBY.PK) CEO and majority owner of Sprint Corp. (NYSE:S) Masayoshi Son appeared on the Charlie Rose show on Monday evening and spoke for the first time about a potential acquisition of T-Mobile US (NYSE:TMUS) by Sprint. Such a deal has been rumored for some time, as a combination between the two carriers would create a bigger, more able competitor for wireless industry dominators AT&T (NYSE:T) and Verizon (NYSE:VZ).
SoftBank took a controlling interest in Sprint in the summer in a $21.6 billion deal. Son has said his goal is to make Sprint the number one player on the U.S. wireless market, which is considered by many to be a duopoly controlled by AT&T and Verizon. But a recent in-depth article by the Wall Street Journal profiling Son’s work with Sprint said that “Masa,” as he’s known by associates, is frustrated with Sprint’s slow growth pace and the heavy regulations on the U.S. wireless industry that don’t exist in his native Japan.
Son told Rose that the company would buy T-Mobile “if we could” but said that no formal agreement has been penned. “We would like to make a deal happen, but there are steps and details that we have to work out,” Son said. When asked about Federal Communication Commission Chairman Tom Wheeler’s opinion that there need to be more players on the market in order to maintain a healthy amount of competition, Son called AT&T and Verizon’s grip on the market a “duopoly.”
“So here comes two little ones,” Son said about T-Mobile and Sprint. “Who are not able to fight without enough scale. So that’s no good, and I think the situation needs to be changed.”
“I would like to have the real fight. Not the pseudo-fight, the real fight,” Son went on to say of the possibility of creating a more able third competitor, saying he’d like to see a “more massive price war.”
Son and Sprint CEO Dan Hesse met with Wheeler and other FCC regulators earlier this month to discuss the potential deal. Wheeler apparently echoed the thoughts of antitrust chief William Baer of the U.S. Department of Justice, who met with the duo last week and said he thought a merger between any two of the top four wireless phone companies had “long odds” of regulatory approval. Sprint will need the go-ahead from both the FCC and the Justice Department to make the merger between the two companies possible.
Meanwhile, T-Mobile’s growth has been outpacing Sprint’s, as charismatic CEO John Legere has introduced some innovative ideas to draw customers away from the restrictive and expensive plans found on AT&T and Verizon. The company’s fourth-quarter earnings showed it to be the fastest-growing wireless company in the country. This growth means T-Mobile is becoming more and more expensive the longer Sprint waits.
For its part, Sprint has been doing well even if its growth isn’t moving as quickly as Son would like. The company reported fourth-quarter and full-year results that impressed investors last month and boosted the stock even though many are increasingly skeptical about the possibility of regulators allowing a merger between Sprint and T-Mobile.
More from Wall St. Cheat Sheet:
- Son Straining to Push a Slow Sprint Forward
- T-Mobile Earnings: Aggressive Growth With a Couple of Hiccups
- Sprint Is Doing Well, T-Mobile Deal or Not
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