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SoftBank Chief relieves hard posture on sprint



TOKYO-Just five months ago,

Softbank Group
Corp.


9984 4.08%

Chief

Masayoshi son

He said it was "the key" for him to keep a mobile operator in the US

sprint
Corp.


S 8.33%

in his empire and he would "really regret" it in 10 years if he ever lost control.

Now, Mr. Son seems to be ready to put this prediction to the test. People who are familiar with Mr. Son's thinking say that he is ready to make a deal to combine Sprint with

T-Mobile US
Inc.,


TMUS 0.66%

a step that would give at least some control to T-Mobile's parents

Deutsche Telekom
AG


DTEGY 1.49%

.

If the merger were completed, it would accelerate the Japanese billionaire's departure from his core business of selling mobile phones. He has recently focused on Internet investing in companies such as the leading provider Uber Technologies Inc. and a $ 100 billion mutual fund launched last year with support from Saudi Arabia.

Mr. Son has long held that a merger between T-Mobile and Sprint, the number 3 and 4 carrier in the US, is necessary to compete with the two market leaders,

Verizon communication
Inc.

and

AT & T
Inc.

The following year, after buying control of Sprint for $ 22 billion in 2013, the pair announced a deal just before a deal, but gave up on Obama's overreaction for excessive concentration in the face of Obama's opposition.

Sprint and T-Mobile came close again. Then, at the last second, Mr. Son made a deal and said Sprint was too important to Softbank's vision of a world where communication between machines known as the Internet of Things or IoT would power new services.

"The IoT era is coming," Mr. Son said at a November press conference. "If you think about infrastructure for this era, controlling Sprint is the key, losing control of Sprint means losing the US – the largest and richest market, and we'd really regret that in 10 years." [19659007]What has changed? A person close to Mr. Son said the pressure on Sprint to use next generation technology to support IoT devices – called fifth generation wireless – makes it more accessible to take control of the debt-laden US Give up mobile operators. [19659007] Building a fifth-generation network is costly: Mr. Son has said that Sprint will increase its investment this year from around $ 4 billion to $ 6 billion to keep up with Verizon and AT & T

Sprint and SoftBank are already deeply in debt – SoftBank even more than its subsidiary, with net debt estimated at nearly five times earnings before interest, taxes, depreciation and amortization, according to S & P Global Market Intelligence. This is a level that most analysts regard as unhealthy.

Working with T-Mobile and its German parent company, Sprint could save billions of dollars as analysts could share the cost of network devices and retail stores. T-Mobile's market capitalization was $ 55 billion on Friday, more than twice as high as Sprint's $ 26 billion, giving Deutsche Telekom the upper hand in every combination.

The exact terms of the proposed merger were not clear, but one person. Discussions with the unions were discussed in terms of terms that Mr. Son could give a voice to the merged entity, perhaps by distinguishing between shareholdings and voting rights.

Mr. Son has moved away from its telecommunications focus in its home market of Japan. SoftBank operates Japan's third largest mobile operator, which still accounts for most of the group's revenue. Mr. Son has said that he may want to list the unit by the end of this year.

Some SoftBank board members have expressed concern with director about the relocation

Tadashi Yanai,

Head of Uniqlo parents

Fast retail
Co.

Mr. Son needs to focus on "real business" and not just on speculative investments in internet start-ups.

But Mr. Son has sometimes expressed his tiredness as a mobile operator. Average revenue per user has fallen in the US and Japan as smartphone saturation increases, while traffic has grown exponentially, requiring ever-higher infrastructure spending. This situation, which Mr. Son called "sad," led him to invest more in investment.

He bought British chip architecture designer Arm Holdings in 2016 and paid $ 32 billion to gain a crystal ball Towards Technology

SoftBank has often reinvented itself in the past, moving from software distribution to publishing to broadband moved to telecommunications with diversions in banks and satellite transmissions. Less than three years after buying the Finnish game maker Supercell and declaring mobile games a core business, Mr. Son sold the company to sign up for Arm. To prepare by SoftBank 2016.

Write to Mayumi Negishi at mayumi.negishi@wsj.com and Phred Dvorak at phred.dvorak@wsj.com


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