Softbank CEO Masayoshi Son has implicitly made the case for a merger between his US operator Sprint Corp and smaller rival T-Mobile US after telling an audience in Washington DC how much better their broadband speeds could be. In a speech at the US…
Softbank CEO Masayoshi Son has implicitly made the case for a merger between his US operator Sprint Corp and smaller rival T-Mobile US after telling an audience in Washington DC how much better their broadband speeds could be.
In a speech at the US chamber of commerce, the Japanese billionaire said that Americans are paying higher prices for slower internet speeds compared to other developed countries and he wanted to change that.
The presentation was part of a wider lobbying effort Softbank has engaged in this week in a bid to persuade regulators that a merger of Sprint and T-Mobile would be beneficial and would not have a detrimental effect on competition.
In a television interview on Monday Son had argued that a merged Sprint/T-Mobile would be able to take on the “duopoly” of AT&T and Verizon Communications, and that he would engage the larger players in a massive price war.
In yesterday’s speech Son said he wanted to provide an alternative to home broadband operators, describing the current state of affairs as “monopolistic or oligopolistic” because most households can only get access to one or two providers. However, the tycoon did not explicitly mention a tie-up between Sprint and T-Mobile.
Son said he wanted to be the alternative provider by delivering home broadband via wireless networks. In a presentation video a Sprint engineer demonstrated the speed of the company’s latest technology which he said was 40 times faster than current home broadband speeds.
With its focus on improvements in broadband Son’s speech appeared to be an attempt to reframe the debate about a possible tie-up of T-Mobile and Sprint and get away from the so-far dominant discussion on anti-competitive effects in mobile.
Noises from regulators have so far suggested that they are focused on the mobile market and are keen to keep the status quo of four national players.
MoffettNathanson analyst Craig Moffett commented in a note: “We remain sceptical that Softbank will succeed in re-defining the market as something other than ‘wireless,’ or, at least, to the exclusion of a market definition that includes traditional wireless,” Moffett said.
The analyst said the chances of regulators allowing a merger remained “quite low” and said the more interesting question was: “What will Sprint do without a merger?”
