Chairman Masayoshi Son on Why Sprint–T-Mobile Merger is a Must-Do

by Istvan Fekete on May 29, 2014

T-Mobile and Sprint should merge to create a more competitive mobile landscape in the US, suggests Softbank CEO and Sprint Chairman Masayoshi Son. He is leading a campaign to convince regulators that the country needs a powerful third player that is able to compete with AT&T and Verizon.

A merger between Sprint and T-Mobile would have the advantage of sharing their considerable spectrum position, as well as reducing prices by eliminating redundant information systems and other costs. Also, it is worth noting that the merger would allow the two companies to raise the necessary capital to invest in a network and foster more competition, Son says.

The regulators, however, have so far been skeptical about this deal, as they prefer the four-wireless-player scheme, and have pointed to T-Mobile’s recent growth of subscribers due to its successful un-carrier campaign. The surge in subscribers is the reason a merger between T-Mobile and Sprint should not happen, the regulators say.

The concentration of power up top is the reason speeds are so inferior to other countries, despite high prices, Son emphasized. The merger would mean lower prices: “We’re going to provide better speed and lower prices,” he said.

And Son has “some experience” in the field: there was a similar situation in Japan with NTT Docomo dominating the market, so he created Softbank, a company which obtained the right to sell the iPhone even before being registered. (Son obtained the exclusive rights to sell the iPhone before owning a wireless carrier in Japan. He created wireless carrier Softbank after getting Steve Jobs’ word that he would get the iPhone.)

What Softbank does in Japan is to provide a better, cheaper alternative, and Son is ready to play the game again, this time in the US, but on the wireless side. He has also been supportive of wireless Net neutrality.

Sprint, however, has issued a statement that walked back that comment: “Both Masa and Sprint support the concept of an open internet in order to drive innovation in the US,” the company said. “Masa was not, however, suggesting hypothetical commitments to a merger that doesn’t even exist and his comments should not be interpreted as such.”

AT&T and Verizon have a different view on the matter and claim the speeds achieved by their LTE networks are among the fastest in the world. And they pointed to the difficulty of building a national 4G LTE network in a country that is much larger than Japan.

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Written by: Istvan Fekete. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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