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Thread: Softbank to Invest $16 Billion over 2013/2014

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    Softbank to Invest $16 Billion over 2013/2014

    http://www.nasdaq.com/article/softba...20130707-00017

    TOKYO (Nikkei)--Softbank Corp. (9984.TO) is planning $16 billion in capital spending at Sprint Nextel Corp. over the next two years, President Masayoshi Son said in an interview, as his company seeks to make the U.S. mobile phone carrier a more serious challenge to top rivals, the Nikkei reported in its Monday morning edition.

    Under Softbank, the pace of investment at Sprint will more than double. Most of the roughly Y1.6 trillion in spending will go toward base stations for Sprint's high-speed LTE network. Softbank is also adding base stations in Japan. It reckons its Sprint takeover, recently approved by the U.S. Federal Communications Commission, will lower costs through economies of scale, not only in network infrastructure but also in smartphone procurement.

    Sprint, the third-biggest American mobile carrier, has lagged top-ranked Verizon Wireless and No. 2 player AT&T Inc. in expanding LTE coverage. As of March 31, Verizon's LTE network spanned 491 U.S. markets, compared with just 88 for Sprint. Like Japan, America is seeing a surge in data traffic as smartphone usage spreads.

    If the network isn't good, customers are going to complain, Mr. Son said, adding that Sprint will seek to pull even with Verizon in high-speed coverage in about two years.

    Plans call for $8 billion, or about Y800 billion, of capital spending this year and the same amount in 2014. After that, the pace is to slow to $6 billion.

    Softbank's 21.6 billion dollar takeover of Sprint includes $5 billion of capital to bolster the U.S. firm's balance sheet. Sprint is supposed to pay for network investments out of its own earnings, requiring no additional funding from Softbank.

    The two carriers will open a joint R&D center in California as early as this year. It will "give birth to new technology in Silicon Valley, the center of Internet technology," Mr. Son told the Nikkei.

    With an initial staff of several hundred engineers drawn from both companies, the R&D lab will develop both hardware and software. It will also hire locally, eventually growing to a team of around 1,000, according to Mr. Son.

    The new Sprint, to be 78% owned by a U.S. subsidiary of Softbank, will take over the old Sprint's business. Son will chair the new Sprint's board of directors, with Ronald Fisher, who now heads Softbank's U.S. operations, as deputy chairman. Four current Sprint directors, including Chief Executive Officer Dan Hesse, will stay on, joined by newcomers including Michael Mullen, a former chairman of the U.S. Joint Chiefs of Staff. Softbank and Sprint executives will meet once a month to set common business goals for both the U.S. and Japan.

    Straightening out Sprint's finances will be crucial to funding network investments. "We've found that there is considerable possibility for cutting costs," Mr. Son said.

    Softbank estimates $2-3 billion in annual savings to be had from such steps as combining purchases of smartphones and base stations.

    Mr. Son declined to comment on future talks with fourth-ranked American carrier T-Mobile U.S. Inc., which emerged as a Plan B for Softbank should the Sprint deal fall through.

    The Sprint takeover raises Softbank's groupwide interest-bearing liabilities to Y6 trillion. Mr. Son said it puts less of a strain on the balance sheet than past acquisitions did. But much depends on Sprint's ability to grow steadily. In Japan, Softbank rode its early monopoly on iPhone sales to higher earnings, but all of the big U.S. carriers already offer the popular Apple Inc. device. Innovation in services will be crucial to making Sprint more competitive.
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    Interesting indeed...
    Thrill me...

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    Sweet. 1,000 new high paying jobs in my state.

    Let's hope two years from now Sprint will be pulling ahead. Given their plans and recent developments, Sprint's future looks sunny.
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    Is this an indication of network expansion? or am I simply "reading" this incorrectly?



    - Focus on Post-Network Vision Build

    "If the network isn't good, customers are going to complain", Mr. Son said, adding that "Sprint will seek to pull even with Verizon in high-speed coverage in about two years."



    http://www.softbank.co.jp/en/design_...012_004_03.pdf

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    Sounds like they are serious.

    What does this statement mean though? It kind of sounds like yes we're planning on investing X amount of money but this depends on x happening....

    Softbank's 21.6 billion dollar takeover of Sprint includes $5 billion of capital to bolster the U.S. firm's balance sheet. Sprint is supposed to pay for network investments out of its own earnings, requiring no additional funding from Softbank.


    The sound of new jobs is always welcome news to my California ears indeed. These jobs should be good paying ones too... Maybe I should go work for Sprint now.

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    Quote Originally Posted by 503ducati View Post
    Is this an indication of network expansion? or am I simply "reading" this incorrectly?



    - Focus on Post-Network Vision Build






    http://www.softbank.co.jp/en/design_...012_004_03.pdf
    Well if he's seeking to pull even with Verizon in 2 years, to me it sounds like he would want to expand coverage... very exciting indeed. I'm also assuming that this is above and beyond existing Network Vision plans -- from what I heard, these have already been fully funded.

    Does anyone know how this compares to Verizon's or AT&T annual investments in their networks?

    Nat

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    Quote Originally Posted by NGeorge View Post
    Well if he's seeking to pull even with Verizon in 2 years, to me it sounds like he would want to expand coverage... very exciting indeed. I'm also assuming that this is above and beyond existing Network Vision plans -- from what I heard, these have already been fully funded.

    Does anyone know how this compares to Verizon's or AT&T annual investments in their networks?

    Nat
    Well as a comparison, $4 billion is enough for T-Mobile to refarm 37,000 towers and upgrade to LTE. 4x that investment plus Network Vision already being funded seems like they want to significantly expand coverage. I just hope prices won't rise too much. A triopoly with similar prices isn't a good thing.

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    I wouldn't get my hopes and excitement that high until it actually happens. Been selling sprint for over 5yrs and it's been that long that I"ve been telling customers network is getting better, blah blah blah... and yet? lol... whatever pays the bills I guess, that's why I have my personal phone a verizon one.

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    Quote Originally Posted by m3nphls View Post
    I wouldn't get my hopes and excitement that high until it actually happens.
    No, you wouldn't...

    Been selling sprint for over 5yrs and it's been that long that I"ve been telling customers network is getting better, blah blah blah... and yet? lol... whatever pays the bills I guess, that's why I have my personal phone a verizon one.
    Cool story.

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    Quote Originally Posted by NGeorge View Post
    Well if he's seeking to pull even with Verizon in 2 years, to me it sounds like he would want to expand coverage... very exciting indeed. I'm also assuming that this is above and beyond existing Network Vision plans -- from what I heard, these have already been fully funded.

    Does anyone know how this compares to Verizon's or AT&T annual investments in their networks?

    Nat

    I too figured this was above and beyond NV as that has already been budgeted and funded. One thing I wonder is if they are going to take back network operations. Son did say that there are areas that can be trimmed considerably. If SoftBank is getting volume discounts it is likely that they can get parts and install them cheaper than Ericsson.

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    Quote Originally Posted by mossme89 View Post
    Well as a comparison, $4 billion is enough for T-Mobile to refarm 37,000 towers and upgrade to LTE. 4x that investment plus Network Vision already being funded seems like they want to significantly expand coverage. I just hope prices won't rise too much. A triopoly with similar prices isn't a good thing.
    You add in the discount that is expected due to volume purchases and you are talking a lot of equipment. It will take a lot of equipment to cover the US. They also have to build out on the 2.5 spectrum. That won't be too bad since the only real thing they need is a card and antenna. I hope Sprint included an extra antenna in all building/tower modification permits. The next thing will be do they have enough bandwidth to supply all the frequencies. 100mbps probably won't be enough to power all the sectors and the various frequencies. What they are using though should have no problem going higher. It won't be long before 1gbps is standard affair for tower connectivity. With all the 2.5 that will be needed if they deploy multiple channels or wide channels.

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    Quote Originally Posted by NGeorge View Post
    Well if he's seeking to pull even with Verizon in 2 years, to me it sounds like he would want to expand coverage... very exciting indeed.
    I'm still hoping that they decide to re-purpose some of the decommissioned iDEN only cell sites for CDMA but have not seen or heard any evidence yet that it will happen.
    Sprint user since 1997

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    Quote Originally Posted by larryt510 View Post
    I'm still hoping that they decide to re-purpose some of the decommissioned iDEN only cell sites for CDMA but have not seen or heard any evidence yet that it will happen.
    They are literally decommissioning the iDEN only sites here.. Demolition of the site is underway..

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    Quote Originally Posted by Wireless Junkie View Post
    They are literally decommissioning the iDEN only sites here.. Demolition of the site is underway..
    Those are the ones that likely have expired leases. They're mostly still physically up around here. I've seen a few where they removed the panels but left the equipment shed in place. Probably while they ride out their leases. No sense spending money removing the equipment now when that money can be used for better purposes.

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    This statement about pulling even with VZW high speed coverage interests me.. Do you think he's talking geographically? I have a hard time believing they can build new towers to match VZW in only 2 years, but I'd love to be wrong. How much $ would it take to build out just Montana? It sort of boggles my mind to think of covering that state from scratch with cellular coverage. I would love to see this happen and have a third big player.

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