Friday, October 12, 2012

Softbank Purchase of Sprint Could Have Other Ramifications

Softbank purchase of Sprint potentially could have further ramifications elsewhere in the U.S. markets beyond its obvious potential for change in the retail wireless space. Sprint, for example, does own a national long haul network that essentially has been harvested as a cash cow, without major investments of the sort a company might make if that assets were "core" and strategic, many would argue. 

So speculation about what might be possible, in the wake of a successful Softbank bid for Sprint, naturally will occur. Some will argue the long haul asset could be sold. The issue then becomes "who would buy," and what would that mean?

Level 3 Communications has been an asset purchaser for quite some time, so Level 3 inevitably would be thought a potential acquirer. CenturyLink, which owns the former Qwest backbone, also would be viewed as a candidate, as CenturyLink also has been a buyer of assets. 

In that event, CenturyLink could migrate customers off the older Sprint backbone and onto the former Qwest network. In addition to an arguably better value proposition for customers, CenturyLink would be able to leverage its own access footprint to lower costs.

And CenturyLink might also be able to secure wholesale access to the Sprint and Clearwire wireless assets on terms more favorable than what is currently possible. 


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