SoftBank of Japan is making its biggest gamble yet: entering the American cellphone market.
SoftBank’s complex $20.1 billion deal to buy majority control of Sprint Nextel will unite Japan’s fastest-growing cellphone service provider with one of the United States’ most troubled. The idea is to provide Sprint with a stronger, deeper-pocketed partner that can help finance its network overhaul and, eventually, pursue additional mergers. But SoftBank, an Internet and communications company, is making a risky wager that it can break the dominance of Verizon and AT&T in the United States the way it did a similar duopoly that long reigned over the Japanese market.
“SoftBank brings so much more to Sprint than money,” Daniel R. Hesse, Sprint’s chief executive, said on an analyst call. “This investment provides the opportunity to benefit from the knowledge and expertise of a leader in mobile Internet technology with a proven track record of challenging larger incumbent carriers.”
Together, the two companies would have $80 billion in revenue and $18 billion in earnings before interest and taxes. And they would nearly double Sprint’s customer base to 96 million, giving the company greater purchasing power.
SoftBank’s founder and chief executive, Masayoshi Son, was blunt in his goal: creating the biggest and fastest wireless network in the United States. It is the strategy his own company is pursuing in Japan, aimed at drawing in users of the latest smartphones.
Sprint is only beginning to roll out its next-generation Long Term Evolution network, trailing Verizon Wireless and AT&T.
“U.S. citizens don’t have this experience of high speed,” Mr. Son said on the analyst call. “We’re going to bring that to the States.”
Shareholders in Sprint and SoftBank appeared less pleased by the transaction. Sprint’s shares closed down slightly on Monday, at $5.69, while SoftBank’s