SoftBank Gets Shares Boost After Ceding To T-Mobile Regarding Control Of Sprint

Reuters recently broke the news that Japanese financial firm SoftBank might be ceding control of mobile carrier Sprint over to T-Mobile just to get the merger over with. In the hours that followed, SoftBank’s shares got a major boost of 3 percent. The financial company has much to celebrate, but analysts still argue that Sprint’s growth prospects are grim.

Sources have told the publication that Deutsche Telekom AG, T-Mobile’s parent company, and SoftBank will be meeting soon to start negotiations when the ban on discussions between rivals is over, Reuters reports. The Japanese company’s founder, Masayoshi Son has been talking about he refers to as the "Berkshire Hathaway of the tech industry." This development could put SoftBank much closer to achieving that dream.

A lot of this would be riding on the proceeds that SoftBank will get from the sales or the stake that the company would end up with once the deal is sealed. With those resources, the company’s credit ratings could be improved, analysts say.

The most worrying aspect of this whole deal, however, is the fact that Son’s firm might end up getting the biggest slice of the pie despite ceding control over to T-Mobile. As it stands, SoftBank can still make a lot of money via its domestic mobile segment. Unfortunately for Sprint, since it doesn’t have the same resources as its much bigger competitors, growth is going to be challenging, to say the least.

This doesn’t seem to worry Son, though, with the Japanese billionaire telling reporters that profit potential with Sprint is more than he expected and has actually opened new roads for him. The last time he delved into this deals, he was more focused on actually making it happen.

At the time, US officials got in the way by basically preventing the merger. With a much more business friendly Trump administration, this isn’t a problem.