US regulators approve SoftBank-Sprint and Sprint-Clearwire deal
06 July 2013
Japan's SoftBank Corp yesterday received the final approval from US regulators for its $21.6 billion bid to acquire a controlling stake in Sprint Nextel Corp, the third-largest US wireless operator.
The US Federal Communications Commission (FCC) approved the transaction after the US. antitrust and national security regulators and Sprint shareholders had earlier approved the deal. (See: Sprint shareholders vote for SoftBank's $21.6-bn deal)
In a related development, the FCC also approved Sprint's plan of acquiring the remaining of what it does not already own in wireless company Clearwire Corp.
The FCC's review found that the two related deals would improve mobile broadband access, greater innovation and potentially lower broadband prices for users, "including rural, low-income, and minority consumers."
"The proposed transactions are unlikely to result in competitive or public interest harms," the FCC's said. "We are not persuaded by requests that the Commission impose buildout requirements, require divestitures of spectrum, or request investment commitments by the applicants."
"The increased investment in Sprint's and Clearwire's networks is likely to accelerate deployment of mobile broadband services and enhance competition in the mobile marketplace, promoting customer choice, innovation and lower prices," said FCC's acting chairwoman, Mignon Clyburn,said in a statement.
The Sprint-SoftBank deal is good for both companies since Sprint required the money to upgrade its network in order to stay and compete with its larger rivals AT&T Inc and Verizon Communications and buy the remaining of Clearwire, while a deal with Sprint will give Tokyo-based SoftBank an entry into the US telecom market.
Fending off a competing bid for Clearwire from US billionaire Charles Ergen's Dish Network, was critical to Sprint since Clearwire holds a large amount of spectrum needed to expand and stay in the competition. (See: Sprint Nextel raises bid for Clearwire by 47%)
"We are one step closer to a stronger Sprint which will better serve consumers, challenge the market share leaders and drive innovation in the American economy," said Sprint CEO, Dan Hesse.
"SoftBank's investment in Sprint will bring innovation and increased customer focus, which will enable us to begin creating a true competitor in a market dominated by two companies," said, Son, CEO of SoftBank.