Sprint announced this morning that it successfully completed its acquisition of the remaining 49% of Clearwire that it did not already own, while Softbank committed earlier this week to a $16 billion investment in Sprint over the next two years.
Sprint’s announcement followed a special meeting of shareholders yesterday, at which the transaction with Clearwire was approved. Clearwire is now completely, 100% officially owned by Sprint.
Sprint first announced its intentions to purchase the rest of Clearwire back in December of 2012, and since then Dish tried its hardest to thwart Sprint’s plans. It wasn’t until last month before Dish finally gave up and conceded Clearwire to Sprint – and then it also conceded Sprint to Softbank. Current Clearwire shareholders will receive $5 in cash per share, and the stock is no longer listed for trading on the NASDAQ stock exchange. Clearwire expects all trading to cease after the close of business today.
Sprint now owns a healthy chunk of spectrum that it can use to further deploy LTE across the nation, and once Softbank is in charge of Sprint, it will finally have to cash to do so. Softbank promises to invest $16 billion in Sprint’s network over the next two years, which will more than double Sprint’s current investment in the network. According to Softbank, this investment will allow Sprint’s LTE network to rival Verizon’s size and scope.
The $16 billion investment will be split into annual investments of $8 billion the first two years. Softbank then expects to spend around $6 billion per year with network improvements and maintenance going forward after this.
Perhaps most importantly, Softbank stated that it is aware if a network is bad, then customers will complain and leave. It is approaching Sprint’s network with a full awareness of how it currently stands, along with the difficulties it will take to achieve profitability. However, if anyone is in a position to make this work, it’s Softbank.
Softbank was extremely successful in Japan in building up a national LTE network there, and it has a strong focus on keeping up with trends in mobile technology. In fact, Sprint and Softbank intend to open an R&D center in California as early as this year. According to Softbank president Masayoshi Son, it will “give birth to new technology in Silicon Valley, the center of Internet technology.”
It’s not secret that I have been disappointed in Sprint’s progress over the past couple of years, although all that is happening in the way of mergers, acquisitions, and cash infusions are certainly encouraging. If everything pans out the way Softbank intends, Verizon and AT&T should both be very concerned.
But still, I’m skeptical. I’ve been burned by Sprint’s broken promises for too long, and so I still find it difficult to believe any new promises – even if Softbank will bring a fresh perspective and some new leadership.
What do you think? Is the future bright for Sprint, or do you still need to see it to believe it?[Sprint | NASDAQ]