SoftBank, Japan's financial-services company and the number-three wireless carrier in that country, is rumored to be in talks to buy a majority stake in U.S. mobile operator Sprint Nextel, according to Reuters and the Nikkei Business Daily.
Neither company has confirmed talks are under way, but shares for Sprint Nextel took a jump on the news, up to $5.80 by midday. One possible price, as quoted by The Verge, for acquiring two-thirds of Sprint Nextel's stock, is $19.2 billion.
SoftBank's track record for acquisitions is mixed. It was widely reviled for its purchases of the COMDEX trade show and Ziff Davis, but it did purchase another Japanese wireless carrier, Vodafone Japan, and help revitalize its place in that country's wireless market after rebranding it as SoftBank Mobile.
The SoftBank Sprint deal comes hot on the heels of T-Mobile planning a purchase of MetroPCS, most likely to allow both companies a stake in building more 4G LTE spectrum. MetroPCS almost had a buyer in Sprint earlier this year, but Sprint's board decided not to go through with the deal. Others pointed out how incompatibilities between the two company's wireless standards--Sprint's GSM and MetroPCS's CDMA--would have been a problem.
It's unclear what specific changes SoftBank would make once it acquires its majority share of Sprint, but SoftBank also is apparently seeking to control Clearwire, the wireless high-speed Internet provider Sprint also owns a 49% stake in.
Most of Clearwire's 4G and WiMAX network business is through resellers rather than direct customers. Comcast and Time Warner Cable resell Clearwire access via various mobile-broadband packages. To that end, the Sprint sale could affect many other wireless customers who have no direct connection to Clearwire, or Sprint. Clearwire's stock jumped almost 30%, to around $1.80 by midday, when the news broke.
SoftBank might also be interested in other methods of resale for Clearwire's spectrum, some of which is being used to build an LTE variant called TDD-LTE that is also used in Japan--another reason why it might be appealing to SoftBank.
Sprint has been on the rocks for some time, especially after its 2005 merger with Nextel Communications, but has perked up a bit thanks in part to it being one of the U.S. carriers that offers Apple's iPhone. Sprint's also working to modernize its network, in big part by ditching Nextel's legacy iDEN network and replacing it with LTE.