Over the past year, SoftBank Group’s chairman Masayoshi Son and leading executive Nikesh Arora floated the idea of selling its struggling US operator Sprint to Comcast, the cable operator, and Altice, the acquisitive cable-to-mobile group.
However, talks with potential suitors for Sprint, which is beset by problems, have gone nowhere, reports The Wall Street Journal.
Sprint is looking for a turnaround – it just got overtaken by T-Mobile US for third spot in the US market behind AT&T and Verizon Wireless. And its network needs a massive investment to improve, which Son is trying to do as cost-effectively as possible.
He is looking to Sprint CEO Marcelo Claure for inspiration, appointed last summer in the wake of a failed merger with T-Mobile US. The possibility of reviving the merger is on hold at least until 2016 when the presidential election opens up the possibility of a different regulatory environment.
“I was thinking to myself: ‘I made one of the biggest mistakes in my life,’ which was the misjudgment of the US regulatory environment,” said Son.
Now, Claure is trying to energise Sprint, a process that has led to an infusion of entrepreneurial values and the departure of six top executives. And the operator is looking at ways to improve network quality, without spending excessively.
Son had a plan that was initially rejected as impossible by Sprint’s equipment vendors. “They came up with hundreds of reasons why it cannot work,” he said. “I said: ‘OK, I will find a solution to each one of those 100 reasons of why it cannot work.’ And I came up with a very logical solution to all of them.” Sprint is now deploying thousands of small cells to improve coverage, costing less than a conventional network upgrade.
However, Son also appears open to the idea of a Sprint sale. He is currently grooming Nikesh Arora, lured from Google, as his successor at SoftBank. Sources say Arora wants to offload Sprint.
During a meeting with Comcast chairman and CEO Brian Roberts, Arora mentioned that Son might not always want to own Sprint, said sources. Arora could not be reached for comment.
A similar hint was dropped to officials at Altice, sources said. As well as major acquisitions of telecoms assets in France and Portugal, Altice bought US cable operator Suddenlink for $9 billion in May, and appears open to future deal-making.