Sorting through the SoftBank/Sprint deal

There is no shortage of story lines following this morning’s confirmation that SoftBank is plunking down $20.1 billion for a 70 percent stake in the third-largest U.S. carrier. My colleague Stacey Higginbotham asks whether more consolidation will be necessary in the U.S. market, ZDNet’s Larry Dignan offers an informative post outlining what the investment means and what it doesn’t, and Business Insider weighs in on some less-than-obvious losers in the deal.

Those are all worthy reads, but my condensed takeaway comes down to two immediate points:

  • The mobile landscape in the U.S.may change substantially. The newly inflated balance sheet and network synergies ensure Sprint’s survival for the foreseeable future — something that couldn’t have been said previously –but the inter-continental relationship also creates opportunities that are unprecedented for a U.S. operator. (T-Mobile is owned by Deutsche Telekom, of course, but the European operator has largely taken a hands-off approach to its U.S. carrier.) While there are huge differences between the U.S. and Japanese mobile markets, Sprint should be able to leverage technologies, services and even gadgets from one of the most advanced mobile markets in the world.
  • Sprint still needs spectrum. The cash infusion should enable Sprint to consolidate Clearwire if it chooses to, as Dignan’s piece points out. But even that may not be enough for Sprint to close the LTE gap with AT&T and Verizon Wireless, as CEO Dan Hesse recently acknowledged. Softbank will have to be keenly aware of Sprint’s spectrum holdings as the carrier builds out LTE, and it may have to consider substantial partnerships or acquisitions. As I wrote last week, Dish Network might be a good place to start.