SAN ANTONIO, Texas--SoftBank CEO Masayoshi Son issued a call to the small and rural carriers here at the Competitive Carriers Association trade show: "We need to fight back," Son proclaimed during a keynote presentation outlining Sprint's (NYSE:S) new efforts with the CCA and the NetAmerica Alliance to increase Sprint's LTE footprint.
"A duopoly is taking over our country, our country America," Son said, noting that AT&T Mobility (NYSE:T) and Verizon Wireless (NYSE:VZ) have increased their share of postpaid wireless subscribers from 56 percent in 2008 to 73 percent in 2013. "The fact is, if you look at [the past] five years … it is a fact that those two big companies increased from 56 percent to 73 percent. What happens in the next five years?"
Son also pointed out that Verizon and AT&T controlled 80 percent of the enterprise share of the market last year, up from 51 percent in 2008. And AT&T and Verizon increased their share of U.S. industry EBITDA from 67 percent in 2008 to 84 percent in 2013.
Due to the threat from the "duopoly," Son said Sprint is making a "strong commitment" to work with smaller carriers to stop the growth of the nation's two largest wireless operators. He pointed to Sprint's announcement yesterday of new partnerships with the CCA for data roaming and the NetAmerica Alliance for an LTE buildout program. With CCA, Sprint is tying its network into the CCA data roaming hub, which the carrier said will allow smaller wireless operators that also connect into the hub to easily and quickly provide LTE roaming across Sprint's network in a reciprocal roaming model. As for NetAmerica, Sprint has agreed to work with NetAmerica members to aid their LTE buildouts, including through leasing its unused 800 MHz and 1900 MHz spectrum and through financial assistance from Sprint parent SoftBank.
Importantly, Sprint has also agreed to add 700 MHz Band 12 support into some of its devices starting in January. Interestingly, in a slide that Son displayed during his CCA keynote appearance, Sprint appears to be preparing to support bands including Band 2 (1900 MHz A-F), 4 (AWS), 5 (850 MHz), 12 (700 MHz A-C), 25 (1900 MHz A-G), 26 (upper 850 MHz) and 41 (2.5 GHz).
"SoftBank and Sprint will make a strong commitment to all of you to getting access to LTE devices and LTE investment," Son said, noting that the footprint of CCA members is complementary to the footprint of Sprint.
To entice rural carriers to join with Sprint, Son pointed to Sprint's network upgrade plans. He reiterated that Sprint can eventually provide 200 Mbps wireless download speeds through its 2.5 GHz spectrum. Son said these speeds would be available to the roaming subscribers of rural carriers that join in Sprint's CCA and NetAmerica partnerships.
"We need a new weapon to fight back," Son said. "With our services, we can fight back."
Son also pointed to his background as motivation for his desire to battle AT&T and Verizon. He said that he grew up in a poor, minority family, and that he believes "any kids, born rich or poor, should have equal opportunity."
"All of us should have equal opportunity for the future. So I would say let's fight back," Son said.
During a brief interview after his keynote presentation, Son addressed SoftBank's continuing efforts to merge Sprint with T-Mobile (NYSE:TMUS). Though he declined to provide any new details in SoftBank's efforts to ink a deal, he made it clear that he believes that the only way to truly compete against AT&T and Verizon is to create a carrier of equal size. He likened the situation to a heavyweight boxing match, noting that lightweight boxers simply don't have the mass to compete against larger, heavyweight boxers. "We need to change the industry structure," Son said, repeatedly declining to provide details of possible discussions between Sprint and T-Mobile or SoftBank and T-Mobile parent Deutsche Telekom.
Interestingly, Son also addressed T-Mobile's recent "uncarrier" efforts in the market, and the carrier's recent resurgence in terms of new subscribers. He said T-Mobile's success is a short term phenomenon and that "we need a real fight, not a pseudo fight."
Son also responded to questions about a possible partnership between Sprint and Dish Network (NASDAQ: DISH), which competed with SoftBank last year for control of Sprint before SoftBank won out. He said, "I would like to partner with Dish," adding that "we are specifically discussing all kinds of alliances." He pointed to the tests of fixed wireless services Dish and Sprint announced last year as evidence of Sprint's desire to work with Dish and Dish's growing trove of spectrum.
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