Sprint chief says he’ll start a price war if he can have T-Mobile

McClatchy Washington BureauMarch 12, 2014 

— The new chairman of Sprint Corp. says that if the U.S. government will let him take over T-Mobile, he’ll declare a price war that would revolutionize the American mobile market in the same way he overturned Japan’s.

Masayoshi Son promises faster Internet service and lower prices in return for a little regulatory flexibility.

Son heads the Japanese company SoftBank Corp., which bought Kansas-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 and 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 T-Mobile by saying that 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 likely 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 _ in other words, AT&T and Verizon’s domination _ 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 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.

He described his experience reviving Vodafone Japan, that country’s No. 3 carrier, to show how he shook up Japan’s mobile market _ a feat he said he’s eager to replicate in the 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 speech, but he publicly pined for the company in an interview with PBS’s 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.

Combined, the two smaller companies could offer “real competition” to industry leaders AT&T and Verizon, he said.

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.

“We’ve got the technology,” he said.

Email: lwise@mcclatchydc.com; Twitter: @lindsaywise

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