With Softbank, Sprint plans to challenge rivals in handset purchases
LAS VEGAS--Sprint Nextel (NYSE:S) is hoping its proposed financial transaction with Japan's Softbank will ultimately help position the company to obtain more smartphones at a lower overall cost.
In comments to FierceWireless during the Consumer Electronics Show, Sprint's Trevor Van Norman said that Sprint and Softbank could jointly purchase smartphones, and could obtain those handsets for a lower cost due to economies of scale. Van Norman said adding Softbank's buying power to Sprint would put Sprint on more equal footing with Verizon Wireless (NYSE:VZ) and AT&T Mobility (NYSE:T).
"That helps. It definitely helps," said Van Norman, Sprint's director of device product marketing. Van Norman made clear though that Softbank's $20.1 billion purchase of 70 percent of Sprint still needs regulatory approval, and that the companies have not completed any specific handset-purchasing agreements.
Nonetheless, if Softbank's investment in Sprint is consummated, the companies could use their weight to make advances. Van Norman said Sprint eventually plans to run LTE across 1900 MHz, 800 MHz and 2.5 GHz, and that Qualcomm (NASDAQ:QCOM) is building LTE chips to support those bands.
Further, Van Norman hinted that Sprint is working on ways to smooth the delivery of its handsets. He said that the carrier is working on technology that would allow it to deploy devices simultaneously across its various bands, such as Boost Mobile and Virgin Mobile. He said Sprint generally must modify phones for each individual brand, but is working to ensure the carrier can "develop once and sell in multiple places."
"We're working on some interesting things" in this area, Van Norman hinted, without providing details.
Interestingly, Van Norman also said Sprint is closely watching T-Mobile USA's new approach to handset pricing. T-Mobile recently announced it would soon discontinue offering subsidies on devices, instead allowing customers to either buy their device upfront of pay for their device in monthly installments.
"I think we're watching what T-Mobile is doing closely," Van Norman said. "We're evaluating it to see if there are opportunities."
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