Another Week, Another Wireless Deal

[Commentary] It is not every week that we focus on consolidation of ownership in the wireless industry. OK, you are right, frequent reader, it is almost every week. On October 15, Sprint Nextel announced that it had agreed to sell 70 percent of itself to SoftBank of Japan for $20.1 billion. SoftBank, a big Japanese telecommunications company, said it would pay $8 billion to buy newly issued Sprint stock worth about $5.25 a share. It will then pay $12.1 billion to buy existing stock from other investors at $7.30 a share, a premium to current levels. The parties hope to close the deal – after gaining approval from regulators and Sprint shareholders – in the middle of 2013. For Sprint, the deal provides some much-needed cash as it tries to compete with Verizon Wireless, which controls 32 percent of the market, and AT&T Mobility, which has a 30 percent market share. Sprint is the third-largest carrier with a 16 percent share.