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Summary:

Sprint and T-Mobile are probably going to join forces at some point down the road. If that happens, Softbank’s Masayoshi Son thinks that his new acquisition and T-Mobile won’t just compete with wireless carriers.

Japan's SoftBank Corp. founder and President Masayoshi Son speaks during a press briefing to announce the company's financial results in Tokyo on February 12, 2014. SoftBank said February 12 its nine-month net profit soared 58 percent thanks to strong iPhone sales, but third-quarter earnings suffered because of losses in its newly acquired Sprint Nextel unit. KAZUHIRO NOGI/AFP/Getty Images
photo: KAZUHIRO NOGI/AFP/Getty Images

He refused to actually identify the object of his affections Wednesday at the Code Conference, but there’s little doubt Softbank CEO Masayoshi Son wants to combine Sprint, the U.S. carrier he already owns, with T-Mobile, the only other major one he can afford. Should that come to pass, the combined company could provide a more effective counterweight to AT&T and Verizon, but it’s not just wireless competition that Son is promoting.

Sprint and T-Mobile have been linked in merger rumors for years, but this time around, it seems serious. “It’s true that we need scale to have a better presence, to be a better alternative source” to the Big Two wireless carriers, Son said. But what’s interesting is that Son wants to sell the merger by promising competition with fixed-line broadband providers, just hours after Comcast CEO Brian Roberts appeared before the same audience. (Guess who won the crowd over).

“In this country there is … duopolists of wireless and a monopolist of fixed network,” Son said. He also pointed out that the average LTE download speed right now is 6Mbps, while the average U.S. fixed broadband speed is also 6Mbps.

Right now we separate cable and DSL internet service providers and wireless service providers into different buckets, but “there’s only one definition going forward. It’s all about the information highway,” Son said.

While the scale argument makes sense, a combined Sprint/T-Mobile would be losing a lot of money. Son argued that any combination (he was very careful to never actually name T-Mobile) would result in a lot of cost redundancies and efficiencies: which means a lot of people would get laid off. But over time, it would also consolidate the amount of money spent on capital expenditures.

“We will provide lower prices and higher speeds,” Son said, speaking of this shall-not-be-named corporate combination.

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  1. As long as they retain the customer service quality of T-Mobile… otherwise, it will be downhill after the merger. I used to be Sprint customer but had bad customer service experience. I moved to T-Mobile and has been with them for 15 years and counting.

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