There has been mounting speculation over recent months that the Japanese mobile carrier Softbank will make a bid for T Mobile. So should we really care about such a development if it does come to pass? And what will it mean for us consumers?
Well the speculation has heightened after Softbank recently reported good earnings for the financial year to the end of March 2014. The company’s profits were ahead by 34 percent, and earnings at its Mobile Communications Segment were up close to 18 percent. This part of the business includes the company’s mobile businesses in Japan.
So the analysts’ logic has it that such a strong performance puts Softbank in a more logical position to make a bid for T Mobile. Softbank acquired Sprint last year, and Softbank’s CEO Masayoshi Son reportedly has a vision to firmly establish his company as a global mobile solutions provider. Therefore – a bid for T-Mobile USA would be a big stepping stone towards achieving that goal.
The company’s results were boosted in particular by the handsets and increased subscribers to SoftBank Mobile, and through the consolidation of GungHo Online Entertainment. This part of the group is a mobile games producer based in the home country. Earnings were also assisted by Supercell, another games producer, based in Finland, along with U.S.-based cell-phone distribution company Brightstar.
In total, Softbank now has around 1,300 companies under its ever-widening belt. Quite whether T Mobile will become another, though, is anyone’s guess. But CEO Son has said he’ll deliver increased price and speed competition to the U.S. market. In fact, the Japanese business chief described U.S. broadband speeds as “terrible” compared with other developed countries.
Media reports have suggested that Softbank could be working on a bid for T-Mobile as early as this summer. This would then enable Sprint and T-Mobile to merge – thereby controlling around a third of the U.S. market.
It would also enable the enlarged group to compete even more fiercely – though T Mobile has already done a lot to shake up the market with some very competitive deals for international long distance mobile calls – unlimited mobile to mobile across international borders for just $15 a month, for example.
This is particularly interesting for people living in the U.S., with a regular need to call Mexico, Cuba or other Latin American countries – as this is the biggest single market by far for international mobile to mobile calls – something which is surely not lost on the big companies competing so fiercely for market share. And this is also a market that looks set to grow alongside the cheaper deals. Spanish is already by far the most spoken non-English language in the U.S.
Now 37.6 million people aged five or over speak Spanish at home in America, according to the Pew Research Center’s American Community Survey, so the market is huge.
And if a bid is made, then the competition will surely hot up even more – with better deals and faster download speeds coming to consumers. But if a bid isn’t made – it’s still difficult to foresee a decline in competition and ever-better deals any time soon.
This is what they call a “win, win” for mobile users – and particularly Spanish speakers.