Sprint (NYSE: S) parent SoftBank is looking to expand its reach in the Western Hemisphere by investing in Mexican wireless carrier Grupo Iusacell as part of an effort to ride growth in the Latin American market, according to a Bloomberg report.
The report, citing unnamed sources familiar with the matter, said SoftBank is in the advanced stages of reviewing Iusacell's assets. The report noted that Iusacell owner Ricardo Salinas said earlier this month he would soon announce a new "world-class strategic partner" for the operator. SoftBank already has a roaming deal with Iusacell that lets SoftBank's customers roam in Mexico for a flat rate. Iusacell is the No. 3 Mexican carrier after América Móvil and Telefónica.
SoftBank declined to comment, according to the report.
If the investment does come, it would be a little more than a year after SoftBank took control of 80 percent of Sprint in a $21.6 billion deal. Shortly after the Sprint deal closed, Softbank CEO Masayoshi Son turned his attention to T-Mobile US (NYSE:TMUS) in the hopes of combining the No. 3 and 4 U.S. carriers to create a larger competitor to Verizon Wireless (NYSE: VZ) and AT&T Mobility (NYSE: T). However, those talks, which developed for close to a year, fell apart in August amid intensifying opposition from U.S. regulators.
Manny European operators have turned to Latin America for growth amid stagnating revenues in their domestic markets. For example, Telefónica recently agreed to acquire Vivendi's Brazilian broadband business GVT for just over €7 billion ($9 billion) in cash and stock. And earlier this month Telecom Italia valued its 67 percent stake in TIM Brasil at around €13 billion ($16.7 billion), amid reports that Brazilian operators Oi and América Móvil were closing in on the Italian company's unit.
SoftBank would enter Mexico just as new laws are opening the telecommunications market there to foreign investors, which could lead to heightened competition. América Móvil is looking to sell assets in a bid to appease regulators, in deals that could be worth as much as $17.5 billion, and SoftBank is also reportedly one of the interested suitors.
SoftBank just reaped a windfall thanks to its role as the biggest shareholder in the Chinese e-commerce company Alibaba, which raised a record $25 billion in its initial public offering. As a result, SoftBank forecast a gain of about 500 billion yen ($4.6 billion) related to the listing.
- see this Bloomberg article
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