Softbank makes a revised sprint offer as it eyes global expansion

By Quantum Capital Fund

With a growing population which has largely weathered the storm left behind by the 2008 global financial crisis, the US technology industry is an attractive investment local for global companies who are eyeing international expansion; especially if these companies are focused in the area of telecommunications.
One of the biggest deals of 2012 was the proposed takeover of Sprint by Japanese telecommunications giant Softbank.

On October 15, 2012, SoftBank announced plans to take control of Sprint Nextel by purchasing a 70% stake of the company for $20 billion. This was the first visible signs of aggressive implementation of the company’s global expansion strategy. There was some debate as to the mechanics of the deal and on June 11, 2013, Softbank announced that it would make a revised offer.

SoftBank agreed with Sprint Nextel Corp. to raise its offer for the wireless carrier by 7.5% to $21.6 billion to try to ward off a competing bid from Dish Network. But it remained uncertain whether the move will clinch the deal.

The competition in the US smartphone market is healthy and Sprint will benefit from either offer. The question is which will benefit the company the most. Currently, Sprint is the US’ third largest mobile operator and has major ambitions to move its way up to the top.

If the company accepts the Dish Networks offer it will offer Sprint the opportunity to start diversifying out of the smartphone industry into satellite television, audio programming, and interactive television services.

However, if the company accepts the SoftBank offer it will be bought out by the third biggest mobile operator in Japan. Not only will Sprint have access to increased capital, the company will have access to a new market where it offer its products and services.