The Winds of Change

I mentioned in my New Years update that I had applied once again to JET for a CIR position. Well, I found out recently that I didn't move on in the process. Some information came to me from friends on the review staff that my application was disqualified for a very iffy, red-tapey reason that made those in charge feel bad. I won't go into detail; it's certainly disappointing, but that was just one possible avenue. We'll see what's to come!

Although I don't write much (or at all) about my work here, it's been an interesting past half-year in telecom. I suppose there's always something going on, but last summer heralded the acquisition of wireless carrier Sprint by Japanese mover and shaker Softbank. This was exciting on more than one level ("Yay M&A!" and "Yay J-company!").

First (I don't want to assume you're familiar with the US wireless scene), know that there are 4 major American carriers. Two Goliaths - AT&T and Verizon Wireless, and two Davids - T-Mobile and Sprint. AT&T tried to buy up T-Mobile in 2011, but US regulators nixed the deal over concerns that it was anti-competitive. Since then, T-Mobile has become a scrappy thorn in its rivals' sides, branding itself as "the Un-Carrier" and promoting unlimited data plans and unsubsidized phones - basically swimming against the current and actually making headway.

Sprint, on the other hand, has been kind of barely treading water. About a decade ago it merged with Nextel - a deal that is seen now as a waste of resources. Its network is lacking and under-built. What it has got going for it is a lot of good spectrum (airwaves that are used to build cellular networks). Enter Softbank.

Softbank is one of the Big 3 carriers in Japan (Softbank, NTT Docomo, and KDDI au), and right now is the most dynamic and exciting of the bunch. It was the first to bring the iPhone to Japan, and its daring leader is now trying to shake things up in the US with newly acquired Sprint. Whether or not he'll be able to do so remains to be seen.

The latest news is that Softbank-Sprint is exploring the possibility of gobbling up T-Mobile. I'm not sure how realistic this is. US regulators at both the Department of Justice (DoF) and the Federal Communications Commission (FCC) have indicated that they like the recent spurt of competition brought on by T-Mobile's feistiness and are happy with their decision to its 2011 merger with AT&T. In terms of major carriers, 4 could be the magic number.

It's a shame that there aren't many other telecom moguls out there as daring as Softbank's Masayoshi Son. With regulators leery of allowing further consolidation among the major carriers, there's a rare opportunity here for entry into the US market. But alas, German Deutsche Telekom is T-Mobile's majority shareholder, and they want out. NTT Docomo once tried to get into the US market and failed, but right now they're the slowest of the J carriers to change and I doubt they'd be interested in such an adventure. 

Will T-Mobile and Sprint continue to fight uphill as separate entities, then? Probably, I think. T-Mobile may be snapped up eventually by Dish or someone else. Sprint definitely has the means to make an impact on the market, but that will take a lot of creativity and capital investment. We'll see if Son is up to the task.