After announcing record profits for SoftBank today, Masayoshi Son, chief executive of the Japanese firm, defiantly said there was no need to raise his offer for Sprint and that Charlie Ergen, chairman of Dish Network, was guilty of “big-mouthing” on the supposed benefits of a Dish-Sprint tie-up.
Son scornfully rejected the notion that Dish would be able to drive Sprint’s customer acquisition through combining satellite TV with smartphones, and that the “upside synergies” put forward by Ergen were exaggerated.
“It’s very easy to talk about customer acquisition, but it’s more difficult to deliver,” said Son in a Q&A session with analysts.
SoftBank’s boss further argued that Ergen had no track record of subscriber growth at Dish, while SoftBank had managed to expand profitably in its competitive domestic mobile market.
“Our top line and bottom line [growth] is the quickest in the world,” boasted Son. “I deliver the results rather than big-mouth.”
For the year ended 31 March, SoftBank notched up record operating profits of YEN745 billion ($7.6 billion), up 10 per cent from the previous year. The underlying cash profit margin at the company was an impressive 50 per cent.
Back in October, SoftBank entered into an agreement with Sprint to buy 70 per cent of the third-largest mobile operator in the US for $20.1 billion. US satellite TV company Dish Network made a counterbid earlier this month for $25.5 billion.
Son insisted, however, that the US regulatory review of the SoftBank bid is on track for completion by 1 July. “We have already committed to not using vendors that [US authorities] have any concerns with,” he said (which effectively rules out Huawei and ZTE).
And turning the tables on Dish, Son argued that Ergen’s bid may well come under greater scrutiny than SoftBank’s, so prolonging the approval process for the counter bid.
“In some markets, the combination of spectrum from Dish and Sprint will be too much [for regulators],” said Son.
According to Softbank’s calculations, the transaction value of its bid works out at $7.95 per Sprint share, a 21 per cent premium over the $6.31 per share offer from Dish.
Supporting the SoftBank bid for Sprint is Paul Otellini, the outgoing chief executive of Intel, the world’s largest semiconductor company.
Quoted in a Reuters report, Otellini said “we need this competition in the wireless space as the ATT/Verizon model is not giving that to consumers at this time”.
When asked about his future plans for Sprint, Son was coy. “A good fighter never talks about the next strategy in public,” he said, taking a sideswipe at Ergen who openly trumpets a strategy for bundling satellite TV and mobile services.
Son’s bullishness follows a waiver provided by SoftBank to Sprint this week, allowing the US mobile operator to investigate the counter bid from Dish Network. Under the terms of the waiver, Sprint is not allowed to disclose non-public information to Dish, nor does it enable Sprint to enter into negotiations with Ergen’s company.
Sprint has set 12 June as a tentative date for a special meeting for shareholders to vote on the proposed SoftBank deal.