Trump announces huge investment and job creation in U.S. by Sprint's parent company
President-elect Donald Trump said Tuesday that the Tokyo-based parent company of Sprint Corp. has agreed to invest $50 billion and create 50,000 jobs in the United States.
Trump made the remarks standing beside Masayoshi Son, who is chairman of Sprint and CEO of SoftBank Group Corp., which owns more than 80 percent of Sprint. The Overland Park-based wireless carrier was not mentioned in a brief video of Trump’s comments that ABC posted on Twitter.
Son spoke with reporters after Trump’s comments in the lobby of Trump Tower in New York and said his plans involve new companies.
“We were talking about it, and then I said I’d like to celebrate his presidential job” because Trump will advocate deregulation, Son told reporters according to Bloomberg News. He said he would invest in “new companies, startup companies in the United States.”
A Sprint spokesman referred questions to SoftBank. A SoftBank spokeswoman could not be reached.
Trump has made new jobs a public focal point between his election and inauguration, drawing attention to Ford, Carrier and other employers about potential moves outside the nation. He claimed credit, in a Twitter post, for Son’s pledge.
Sprint is unlikely to see any of the investment, analysts said. Its management is in the second year of a massive cost-cutting effort, and the company borrowed against many of its assets to fund the turnaround effort on its own.
But Son’s announcement provides some public relations benefit to any potential bid he might make to buy Sprint’s rival T-Mobile USA Inc., analysts agreed.
Son, a billionaire, has been public about his previous plans to buy T-Mobile to better challenge larger rivals Verizon and AT&T. SoftBank aborted an attempt at a merger in 2014 in the face of regulatory objections about eliminating one of the four national wireless competitors.
Analysts have said SoftBank almost certainly would test the regulatory waters again under a Trump administration. So far, Trump has not named anyone to key posts that would oversee any merger proposal.
Wireless industry analyst Bill Ho said Son’s meeting with Trump and Son’s jobs promise offered, in business terms, synergy for both men.
Trump gains more U.S jobs to claim credit for. Son creates some good will with the new administration.
“It’s all pure speculation on our part but, cynically, it gives them a good footing, at least PR-wise for a merger because of the new administration,” said Ho of 556 Ventures LLC.
Roger Entner, of Recon Analytics, said he agreed that Son’s pledge to the president-elect likely has a merger-related shadow to it. Son is developing a $100 billion investment fund, working with Saudi Arabia and others, and naturally would plan to invest a large part of that in the United States because of the opportunities there.
“You’re going to do it anyway, so why not make some hay out of it?” Entner said. “I don’t see Masa (Son) doing it for any other reason in such a high-profile way.”
Berge Ayvazian, with Wireless 20/20 , said Son may have many motives for a Trump meeting and public jobs pledge without thinking of a potential T-Mobile merger.
Sprint, for example, would benefit from less regulation in its effort to gain thousands of local permits to install additional network equipment called small cells. Sprint has said it must go from city to city for site permits and that the processes vary widely.
Sprint shares gained 12 cents Tuesday to close at $8.17.
In the video, Son holds up a printout of a presentation that shows the names SoftBank and Foxconn, the China-based supplier to Apple and Samsung, across the top. A photo of the page suggests that Foxconn may be pledging a $7 billion investment and an additional 50,000 jobs. It also says the investment would come over four years.
“This is Masa of SoftBank from Japan,” Trump said in the video clip. “And he’s one of the great men of industry.”