By: Kana Inagaki in Tokyo
Japanese conglomerate says $100bn investment fund is close to launch
SoftBank will seek talks to merge its US mobile business Sprint with rival T-Mobile USA to trigger a long-awaited consolidation in the US telecoms sector, according to its chief executive.
“Our top choice remains T-Mobile. We will be open and sincere as we aim to launch negotiations,” Masayoshi Son, billionaire founder of the Japanese internet and telecoms group, said at a news conference in Tokyo for its full-year results.
US telecom groups have been temporarily unable to discuss deals during a government-run auction of airwaves. Investors are now bracing for a flurry of deals following completion of the spectrum auction amid hopes the new US administration will be more open to deals that would transform the industry.
T-Mobile, the third-largest US wireless carrier, is seen as the potential kingmaker as companies including Sprint, Dish and Comcast weigh their options. By aggressively acquiring airwave capacity worth $8bn across the US, T-Mobile, however, does not seem as desperate to find a merger partner.
Mr Son also said he would explore possibilities other than a combination with T-Mobile: “We’re basically open to anything. If there is an opportunity that will lead to industry realignment under better conditions, we will study [each option] with an open mind.
”A combination of Sprint and T-Mobile USA, which is controlled by Germany’s Deutsche Telekom, has been discussed in the past given the prospect of bringing together the two smaller US mobile networks to better challenge AT&T and Verizon.
However, the deal encountered opposition among competition regulators. Mr Son said that the US administration was now more open to the possibility of a deal.
Mr Son’s comments came as SoftBank, which also owns UK chip designer Arm, is nearing the launch of a Saudi-backed $100bn investment fund.
Mr Son said most of the Vision Fund details have been worked out as the billionaire seeks the firepower to pursue ambitious deals without further increasing the group’s debt level.
The biggest investor in the Vision Fund is Saudi Arabia’s Public Investment Fund, which said last year it would contribute up to $45bn, while SoftBank is putting in about $25bn. Others planning to invest at a smaller scale include Apple, Qualcomm and Oracle founder Larry Ellison, as well as Foxconn, the Taiwanese electronics manufacturer.
Earlier on Wednesday, SoftBank said its net profit for the fiscal year that ended in March more than tripled from a year earlier to ¥1.43tn ($12.5bn), topping the ¥1tn mark for the first time.
Sprint posted a deeper than expected net loss in its most recent quarter but has shown signs of a turnround under chief executive Marcelo Claure by improving its network and cutting prices.
Mr Son also confirmed SoftBank has been consulted by Foxconn about a bid for Toshiba’s flash memory business. People with knowledge of the talks have said Foxconn, which is listed as Hon Hai Precision Industry, has also approached Apple about a potential joint bid for the chip division that Toshiba wants to sell for at least $20bn.
“It is true that we have received various consultations, but we are not the main player. This is a deal that should be mainly studied by Foxconn and Apple,” Mr Son said.
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