Sprint chairman says he’ll revolutionize the U.S. mobile market with T-Mobile takeover

The new chairman of Sprint Corp. says that if government regulators will let him take over T-Mobile, he will revolutionize the American mobile market the way he overturned Japan’s.

Masayoshi Son on Tuesday promised price wars and faster Internet service in return for a little regulatory flexibility.

Son heads the Japanese company SoftBank Corp., which gained control of Overland Park-based Sprint last year for $21.6 billion. Now Son wants Sprint to take over smaller rival T-Mobile USA Inc.

Known as a blunt and sharp-elbowed maverick, the 56-year-old Tokyo businessman is on a mission to revitalize Sprint, which has been losing subscribers as T-Mobile has been adding them.

He recently told a Japanese publication that the company needs “a change in mindset” and that he “sometimes yells at Sprint executives.”

It’s clear from a speech Tuesday and an interview this week in Washington that Son thinks a bid for T-Mobile is key to his ambitious plans for Sprint’s future.

Although Sprint opposed AT&T’s takeover of T-Mobile on antitrust grounds in 2011, Son now justifies Sprint’s own potential takeover of the same company by saying the two companies combined would have enough heft to compete with the industry’s top dogs, Verizon and AT&T.

American antitrust officials have signaled they probably would oppose a deal between Sprint and T-Mobile, the third- and fourth-largest U.S. wireless carriers. Consumer advocates remain skeptical as well, warning that a merger could stifle innovation and drive up prices.

In a speech Tuesday at the U.S. Chamber of Commerce in Washington, Son made his case that the status quo in the U.S. mobile market — a situation Sprint has attempted to portray as a competition-stifling Verizon-AT&T “duopoly” — hurts consumers.

He complained that the Internet in the United States is both slower and costlier than in other countries. America ranks 15th in connection speed, yet it has the second-highest prices, after Canada, Son said.

“The U.S. has been the inventor of the Internet, but now it’s falling behind,” he said.

Son described his experience reviving Vodafone Japan, that country’s No. 3 carrier, to show how he shook up Japan’s mobile market. It’s a feat that he said he’s eager to duplicate in America.

“A Japanese-owned company had a monopoly, and I said Japan has the most expensive Internet and slowest speeds. Is that a good thing?” Son said. “So I said deregulate. Deregulate for the sake of Japan. … In that moment, Japanese history got changed.”

Son said he declared a price war in Japan and as a result, “the cost for each subscriber has gone down.”

Japan uses 50 percent more data than the United States, but American consumers pay 1.7 times more than Japanese consumers, he said.

Son never mentioned T-Mobile by name during his Tuesday speech, but he publicly pined for the company in an interview with PBS’ Charlie Rose, excerpts of which were posted to YouTube on Monday.

He told Rose he would start a “massive price war” if U.S. regulators let Sprint purchase T-Mobile.

Sprint is investing billions to upgrade its network to faster speeds. Son said Tuesday that he wants to provide wireless network speeds of 1 gigabit per second of broadband performance, the same being offered by Google Fiber in Kansas City over landlines.

“We’ve got the technology,” he said.

Industry analysts watched the SoftBank boss carefully, seeing his declarations as a way to pressure regulators.

Son “did what he needed to do and made a very convincing case to the biggest doubters and naysayers,” Jennifer Fritzsche, an analyst at Wells Fargo Securities, said in an email to clients. “Son successfully laid out a thesis as to why a stronger Sprint is good for the American economy and, more importantly, the U.S. wireless consumer.”

Analyst Craig Moffett at MoffettNathanson Research said the effort probably will have been in vain. Son’s argument “is already fully understood by regulators. Simply hearing it argued again isn’t likely to do much to advance the cause,” Moffett said in a report to clients.

“The most interesting question remains: What will Sprint do without a merger?”

This story was originally published March 11, 2014 at 4:12 PM with the headline "Sprint chairman says he’ll revolutionize the U.S. mobile market with T-Mobile takeover."