It might be nice for Americans if the cell phone service market remained relatively stable, but alas, such will probably never be the case. The latest example of a large change-up among major cell phone providers is this week’s announcement that a significant portion of Sprint is due to be sold to SoftBank, a Japanese carrier. SoftBank has announced that it will purchase not only a majority interest in Sprint, but will actually buy a whopping 70 percent of the company. The price of such an endeavor? More than $20 billion. When the deal has been carried through, it will mean that the nation’s third largest cell phone network is largely foreign-owned.
According to reports, it will also mean that Sprint will have access to new capital that it can use to compete more effectively against its two major rivals: Verizon and AT&T. Sprint reportedly plans to distribute about $12 billion to shareholders and use the balance to assist with improved operations, notably a major rollout for super-fast 4G services in the nation.
The CEO of SoftBank commented on the deal, remarking: “Our challenge in the US is not going to be easy at all. We must enter a new market, one with a different culture, and we must start again from zero after all we have built. The smartphone is becoming the core of mobile communication.”
He also pointed out that service in Japan could be slower than is typical in the US market and that Americans on average pay more for their cell service each month.