Sprint shrugged off failed merger talks with T-Mobile US by announcing an MVNO agreement with cable operator Altice USA, while the operator’s owner SoftBank also reaffirmed its commitment to the US market.
Over the weekend Sprint confirmed talks with T-Mobile about a potential merger had ended without an agreement being reached.
SoftBank wasted little time in announcing its next steps, as the Japan-based company tries to engineer a turnaround at the US operator following recent struggles.
Following up in a statement, shortly after confirming the T-Mobile deal was dead, SoftBank announced it planned to increase its stake in Sprint to just below 85 per cent, “subject to market conditions”.
SoftBank currently holds an 82 per cent stake in Sprint and, by increasing its stake to just below 85 per cent, would not trigger a tender offer for the remaining shares.
Masayoshi Son, SoftBank chairman and CEO said he was “very confident” in Sprint’s future, and the operator was a critical part of its plan “to ensure that we can deliver our vision to American consumers”.
Altice MVNO deal
Sprint separately announced a strategic agreement with Altice USA allowing the cable operator to offer mobile services via an MVNO model.
Sprint said the partnership would allow Altice USA to provide mobile, voice and data services throughout the US, while Sprint would leverage the company’s “broadband platform to accelerate the densification of its network”.
France-based Altice formed Altice USA after it acquired and then merged cable operators Cablevision and Suddenlink Communications over a two year period. It now operates as the fourth largest cable operator in the US, with more than 4.9 million customers.
Earlier in the year, Altice USA raised a total of $1.9 billion in a long awaited IPO, giving the operation a total value of approximately $22 billion.
Altice’s entrance to the US mobile market further intensifies competition as the country’s cable companies launch services.
Comcast started selling mobile operations this year, while Charter also plans to launch services in 2018. Both companies have agreements with Verizon.
Of the Altice USA deal, Sprint CEO Marcelo Claure said: “as content and connectivity continue to converge, we believe this approach will be a model for future strategic agreements across multiple industries including cable, tech and others”.
Sprint did not confirm a timeline of when Altice USA will launch its mobile play.