“SoftBank believes that the agreed terms of our transaction with Sprint offer Sprint shareholders superior short- and long-term benefits to Dish’s highly conditional preliminary proposal,” SoftBank wrote in a statement that might as well have been on perfume-scented paper with soft-focus “boudoir” photos enclosed. “The SoftBank-Sprint transaction is in the advanced stages of receiving the necessary approvals, and we expect to consummate the transaction on July 1, 2013.”
Dish CEO Ergen has argued that “A transformative Dish/Sprint merger will create the only company that can offer customers a convenient, fully integrated, nationwide bundle of in- and out-of-home video, broadband and voice services.”
The SoftBank deal was intended to provide a much-needed cash injection for Sprint, which is lagging behind market leaders Verizon Wireless and AT&T in offering LTE service. The combined buying power of a united Sprint and SoftBank could also mean a wider variety of devices available to Sprint customers in the U.S. Finally, the deal is not expected to receive much negative regulatory scrutiny, as the partnership would not remove any competitors from the market.
Meanwhile, the Dish deal would also provide Sprint with the cash it needs. Dish could benefit by being able to offer competitively priced satellite and wireless bundles. Many cable and satellite providers do offer promotional deals for wireless service, but this could be more akin to the cable/Internet/phone triple-play packages consumers are familiar with. That being said, the satellite industry still hasn’t figured out a way to compete with terrestrial cable providers in offering broadband services. This could become increasingly important as more consumers turn to streaming, cloud-based services for their home. Does Sprint want to get in bed with a company that may not be able to keep up with Comcast, Verizon FiOS and the rest?