Bloomberg News

Sprint Stalking T-Mobile Vows Broadband Fight With Rivals (1)

March 27, 2014

Masayoshi Son’s Sprint Corp. (S:US) is offering rural mobile carriers help on network investment as the billionaire continues to lobby for support for a possible combination with T-Mobile US Inc. (TMUS:US)

In an agreement with the Competitive Carriers Association, which represents smaller mobile providers, Overland Park, Kansas-based Sprint agreed to provide access to its airwaves, letting rural carriers focus on improving their own networks rather than expanding coverage. The partnership is designed for areas underserved by high-speed Internet, Son said today at a trade show in San Antonio.

The deal will help boost competition in the U.S. market, which is dominated by the “duopoly” of Verizon Communications Inc. and AT&T Inc., Son said. “Let’s fight back! Let’s fight back!” he said as he ended his presentation.

Son is president of Tokyo-based wireless provider SoftBank Corp., which bought control last year of No. 3 U.S. carrier Sprint. Regulators have greeted his ambition to buy T-Mobile with skepticism, and Son has responded by reframing his argument to say he can improve U.S. wireless broadband availability and speed.

“Every American, regardless of where they live or work, should have access to high-speed mobile broadband,” Son said in a statement yesterday.

Sprint jumped 4.2 percent to $9.35 at 10:52 a.m. in New York following Son’s remarks today. T-Mobile climbed 1.8 percent to $32.60.

Increased Competition

Under the agreement with the CCA, small carriers’ customers can roam on Sprint’s nationwide network. The rural providers will be able to build out high-speed fourth-generation capacity, and Sprint customers can use small carriers’ newly improved airwaves, Son said. The new long-term evolution, or LTE, technology being developed by SoftBank and Sprint will deliver speeds 10 times faster than rural residents get today, Son said.

“We’re going to see small carriers building out networks” offering high-speed coverage, Steven Berry, president of the CCA, a Washington-based trade group, said on a conference call yesterday.

The Justice Department has said T-Mobile, the smallest of the four national U.S. carriers, provides increased competition that benefits consumers. It sued in 2011 to keep AT&T from buying the Bellevue, Washington-based carrier, majority-owned by Deutsche Telekom AG.

Postponing Profit

Investing heavily in network expansion requires more resources that come with greater scale, Son said today. He has said he’s willing to postpone profit in the U.S. to gain market share and would use price cuts to draw users, a strategy employed by SoftBank to create Japan’s fastest-growing operator.

The administration of President Barack Obama has made a priority of expanding access to high-speed Internet service, or broadband.

Homes without the option of wired broadband service are more common in rural areas, according to the Federal Communications Commission’s National Broadband Plan. Rural and remote areas are also underserved by mobile broadband coverage, which can be limited to older, third-generation technology at best.

“This is a message to the FCC, DOJ and the Obama administration more broadly that Sprint will stimulate wireless competition outside of the population-dense markets of the United States,” Walt Piecyk, an analyst with BTIG LLC, wrote in a blog post today.

To contact the reporters on this story: Todd Shields in Washington at tshields3@bloomberg.net; Scott Moritz in New York at smoritz6@bloomberg.net

To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net John Lear


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Companies Mentioned

  • S
    (Sprint Corp)
    • $4.34 USD
    • 0.15
    • 3.46%
  • TMUS
    (T-Mobile US Inc)
    • $27.03 USD
    • 0.36
    • 1.33%
Market data is delayed at least 15 minutes.
 
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