Japanese telecommunications company Softbank Corp. announced Monday that it will buy a 70 percent stake of Sprint Nextel Corp for $20.1 billion, Retuers reported, adding that it is the most money a Japanese firm has ever spent on an overseas acquisition.
The Wall Street Journal called the deal, "quite a piece of engineering," resulting in an injection of capital for Sprint, while giving Softbank access to one of the most lucrative wireless markets in the world.
The deal comes at a good time for Sprint which has been losing money steadily since 2007, and as of June 30 carried $21 billion of debt, The Times reported. The wireless company has committed billions of dollars on a new Long Term Evolution high-speed network.
Sprint is the third largest wireless carrier in the U.S. with 56 million subscribers.
The deal could threaten the United States' two dominant players in the wireless market, Verizon Wireless and AT&T. The Times reported that together, these giants have 200 million customers, more than the next six competitors combined.
An independent telecommunications analyst, Chetan Sharma, told The Times a deal between Sprint and SoftBank would probably give SoftBank control over the broad direction of Sprint and would result in new services for Sprint customers.
"Japanese and South Korean carriers are leading the way with innovative mobile services," he said. "...Things that Google and Apple are trying to do here, operators are doing in those countries."
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