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SoftBank's profit zooms on Sprint turnaroun

13 May 2017

Japan's SoftBank Group Corp 9984.T said it had notched up its second-best annual profit on cost cuts and a rise in subscribers at Sprint Corp S.N , adding that it was eager to discuss potential M&A for the loss-making USA wireless unit.

Sprint, which has been reporting financial losses since 2007, reported a loss of $0.07 per share on $8.5 billion in revenue during Q1 2017. For T-Mobile, it means deploying 5G technology on existing low-band spectrum, which is only part of what 5G is supposed to look like.

A week after T-Mobile announced its plan to build a coast-to-coast 5G network, Sprint threw its 2 cents into the 5G hat with an announcement of its own.

The latest merger interest between the two telecoms was raised by Masayoshi Son, the chairman of Sprint's parent company, SoftBank Group, in a discussion with reporters in Tokyo on May 10, according to a report by Bloomberg. He said at the time that the reason was Trump's push for less regulation of businesses.

However, Son admitted that the ball is in T-Mobile's park on whether or not it would be receptive to the idea of a merger.

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It's being reported today that 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.

Despite naming T-Mobile as its primary candidate as a potential merger partner, Son said that the company is "basically open to anything" and won't be limiting its options for its US wireless unit.

Son also said T-Mobile is one of the best candidates for a potential deal, but added that there are other possibilities. T-Mobile, meanwhile, is now said to be the fastest-growing wireless carrier in the US thanks to a combination of promotions, price cuts and social media marketing campaigns that have seen it steal customers away from both AT&T and Verizon.

Sprint is struggling to find its place in the USA wireless industry right now. He explained that although the new Trump administration might view the idea more favorably, the principles for allowing a merger are not made by the administrations.

On Thursday, Deutsche Telekom AG Chief Executive Tim Hoettges said merger talks will very likely get under way involving its USA subsidiary T-Mobile US. "The challenge will be to keep up the "Uncarrier" disruptor role when being a mainstream player".

SoftBank's profit zooms on Sprint turnaroun