TOKYO -- SoftBank is making the case that the U.S. wireless communications industry could use a shake-up, as the Japanese company plans a takeover of fourth-ranked U.S. carrier T-Mobile amid likely resistance from regulators.
On Tuesday, SoftBank Chairman and Chief Executive Officer Masayoshi Son argued that the U.S. market is characterized by "pseudo-competition" in a speech at the Chamber of Commerce in Washington. Addressing an audience of more than 300 including telecom industry insiders and policymakers, Son pointed out that U.S. consumers pay over 1.7 times more for smartphone service than Japanese.
According to a 2012 Japanese communications ministry survey, the typical smartphone user in Tokyo pays 7,564 yen ($72.78) a month for service, whereas those in New York shell out the equivalent of 8,698 yen -- just 15% more, under comparable conditions.
SoftBank is pursuing a merger between the third-ranked U.S. carrier Sprint, which it acquired last summer, and T-Mobile US, in a bid to challenge the dominance of Verizon Wireless and AT&T.
It will be necessary for SoftBank to battle the top two firms, Son said, adding that his company seeks to increase its scale and introduce real competition.
But for SoftBank to take over T-Mobile, it would first have to clinch approval from the Federal Communications Commission and Justice Department. Authorities have scuttled such deals in the past. In 2011, regulators shot down AT&T's attempt to buy T-Mobile, on grounds it would harm competition.
SoftBank could face similar obstacles, as the FCC and Justice Department maintain there is adequate competition among the four major players at present.
Son himself negotiated with the FCC and other regulators earlier this year. But he encountered "unexpectedly strong opposition," says a company official. SoftBank also announced Tuesday it was tapping former FCC advisor Bruce Gottlieb to serve as an executive of subsidiary SoftBank Inc., which handles strategic planning for the U.S. segment. Gottlieb's connections and insight into the FCC may prove useful to overcoming regulatory opposition.