Further impacts from the SoftBank-Sprint merger

1Executive Summary

Since the completion of its July 2013 merger with Sprint, Japan-based SoftBank has taken a stronger stance than some might have expected with its U.S. counterpart. While some might consider SoftBank’s approach heavy-handed, it is important to view their actions through the lens of historical challenges to making an international merger a success. Despite cultural differences, SoftBank’s successful turnaround of its Vodafone Japan acquisition has provided relevant experience that can be essential to revitalizing Sprint. As the recent buzz has shown us, however, SoftBank’s biggest challenge may be one of cultural communication and clear messaging.

This research report will outline strengths and challenges that SoftBank will bring to the Sprint deal going forward. Key findings include:

  • Most successful international telecom mergers and acquisitions (M&A) deals fall into one of two categories: former suzerain colony and intra-region combinations. The Sprint/SoftBank deal was neither.

  • SoftBank has managed a successful mobile operator turnaround at Vodafone Japan, which shares a number of commonalities with Sprint.

  • The bulk of SoftBank’s cash infusion will be used to build out Sprint’s coverage, but a realignment of messaging and its handset lineup is also coming.

  • While SoftBank has much more of a Silicon Valley orientation than its peers, it is still not fully prepared to bridge the language and culture gaps between the two companies and will have to make communication a priority.

via Gigaom http://ift.tt/1kGL972


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