NEW YORK (Reuters) - SoftBank Corp (9984.T) will move rapidly to use airwaves from Clearwire Corp CLWR.O to bolster Sprint Nextel Corp’s (S.N) wireless service, but it does not plan any big personnel changes once it takes over the No. 3 U.S. mobile carrier, a top SoftBank executive told Reuters.
Apart from pushing ahead with plans to boost the speed of the Sprint network, which lags Verizon Wireless (VZ.N)(VOD.L) and AT&T Inc (T.N), the immediate priority will be expanding wireless capacity with the airwaves Sprint took over in its July 9 buyout of Clearwire.
Analysts expect Japan’s SoftBank, an aggressive competitor in its home market, to make big changes at Sprint once its takeover of the U.S. mobile service provider closes on Wednesday. They say Sprint needs an overhaul after years of customer losses that have hurt its bottom line.
Softbank founder Masayoshi Son told Reuters in April that he was preparing a ”secret weapon“ to revive Sprint - a ”very innovative product, innovative service that no other carriers in the world are preparing.
But SoftBank executive Ron Fisher, who will become vice chairman of the Sprint board of directors, said the first task was beefing up technology. He added that there will not be any management changes or general layoffs.
“The network is a core focus. Until one has a network that really provides the kind of service we all look for, that’s the most critical thing,” Fisher told Reuters ahead the close of SoftBank’s $21.6 billion purchase of 78 percent of Sprint.
“The Clearwire deal will give Sprint management the flexibility they need in spectrum to really build out the network over the next few years.”
Integrating Clearwire’s spectrum with Sprint’s network, and introducing handsets that can take advantage of that spectrum, could take as long as 18 months, said Fisher. But he noted that putting the process in motion is an “immediate priority.”
“The area you’re likely to see the greatest acceleration is around the 2.5 Gigahertz Clearwire spectrum deployment,” he said.
The deal’s close marks a victory for SoftBank Chief Executive Son, who has battled since April with U.S. entrepreneur Charlie Ergen to control Sprint. Son had to raise his offer last month from $20.1 billion to win the approval of investors and fend off a rival bid from Ergen, the founder of satellite TV provider Dish Network Corp (DISH.O).
Son has estimated Sprint will generate annual savings of $2 billion in the first three years and $3 billion per year thereafter, mainly by pooling purchasing power to get discounts from network equipment and mobile device makers.
Fisher, Son’s right-hand man in the United States since 1995, said savings would kick in “very rapidly” in the next few months.
“A dollar spent today in the Sprint network will go a lot further as we combine the purchasing volume,” he said.
SoftBank also appears to want to increase Sprint’s capital spending this year and next year. The companies have forecast a budget of $16 billion for 2013 and 2014 in merger-related documents they issued ahead of the deal’s close.
Sprint, which will still be run by current Chief Executive Dan Hesse, had expected to keep capital spending closer to $7.2 billion.
U.S. analysts have also been anxious to see what kind of service or pricing changes SoftBank might initiate at Sprint to help it compete with bigger and smaller rivals.
Son is famous for turning around Vodafone Group Plc’s ailing Japanese arm after he bought it in 2006, using price discounts and strategic handset deals. Since then, his company’s operating profit has more than doubled and SoftBank, the No. 3 mobile operator by subscribers in Japan, won even more users when it introduced Apple Inc’s (AAPL.O) iPhone in 2008 ahead of domestic competitors.
But the entrepreneur faces quite a challenge. At the end of the first quarter, Sprint trailed well behind its rivals, with about 56 million customers. AT&T reported about 107 million customers and Verizon nearly 99 million, even excluding the wholesale clients its rivals report.
Reporting by Sinead Carew. Editing by Andre Grenon