Softbank deal validates US rejection of T-Mobile-AT&T merger, Sprint CEO says

Dan Hesse said regulators' blocking of the deal last year made Softbank's planned investment in Sprint possible

Softbank's planned US$20 billion investment in Sprint validates the way the U.S. government handled last year's proposed merger of T-Mobile USA and AT&T, Sprint CEO Dan Hesse said Thursday.

The proposed 2011 deal, which would have seen AT&T pay $39 billion to take over T-Mobile USA, fell apart in December in the face of opposition from both the U.S. Federal Communications Commission and the Department of Justice. The two agencies, which faced pressure from carriers including Sprint, feared the takeover would harm competition.

"Last year, I was asked why did I, personally, and why did Sprint, take such a loud, strong, vehement opposition to the T-Mobile-AT&T deal," Hesse said during a keynote speech at Sprint's developer conference in San Jose.

(See video of Hesse commenting on the Softbank deal.)

"I was concerned that if we had a government-sanctioned duopoly, investment would dry up," he said. "I think the $20.1 billion investment by Softbank into Sprint is validation of the way the Department of Justice and FCC looked at it."

Last week, Masayoshi Son, chairman and chief executive officer of Softbank, told Bloomberg News in an interview that he wouldn't have made an investment of "even $1,000" in the U.S. mobile market had the AT&T and T-Mobile deal succeeded.

The Softbank deal, which itself awaits regulatory approval, will give the Japanese telecommunications company a 70 percent stake in Sprint.

"I think it's a big win for all of us, and certainly a big win for the U.S. wireless industry," Hesse said.

He predicted "the new Sprint" will be a "much, much stronger competitor in the U.S. wireless industry."

Martyn Williams covers mobile telecoms, Silicon Valley and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn's e-mail address is martyn_williams@idg.com

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