FCC clears way for SoftBank-Sprint merger

Japanese company Softbank won approval from the Federal Communications Commission to acquire Sprint Nextel for $21.6 billion.

Sprint Nextel cleared its last hurdle in being acquired by Japan's SoftBank.
The Federal Communications Commission approved SoftBank's $21.6 billion merger with Sprint Nextel and paved the way for the new entity to challenge wireless giants AT&T and Verizon.
The decision, issued Friday, also allows Sprint to purchase the remaining $3.7 billion in shares of Clearwire, which owns a large amount of wireless spectrum that the new Sprint needs to expand and improve its data network in the U.S. Sprint already owns a majority stake in the company.
"After thorough review, the Commission has found that the proposed SoftBank-Sprint-Clearwire transactions would serve the public interest," said acting FCC chairwoman Mignon Clyburn in a statement. "The increased investment in Sprint's

 and Clearwire's networks is likely to accelerate deployment of mobile broadband services and enhance competition in the mobile marketplace, promoting customer choice, innovation and lower prices."

SoftBank, a Japanese holding company with investments in Internet and wireless carrier businesses, initially offered to buy Sprint in October with a proposal to buy 70% of Sprint for $20 billion. But it was forced to raise its offer price after running into a competing bid from Dish Network, a U.S. satellite TV service provider that wants to enter the wireless business to diversify its offerings.
On June 18, Dish dropped its bid for Sprint after SoftBank raised its offer. Dish also dropped its separate pursuit of Clearwire on June 26.
The FCC's approval was widely expected as the deal doesn't consolidate the domestic market yet injects Sprint with more resources from an overseas parent with deep pockets and wireless experience.
The Treasury Department also reviewed national security implications of SoftBank owning U.S. airwaves, or spectrum, but cleared the bid in May. There also were concerns that SoftBank's use of Chinese networking equipment could open up U.S. networks to snooping by China, but SoftBank agreed to stop buying from one of its top Chinese suppliers, Huawei.
Sprint, Clearwire and SoftBank expected the transactions to become final this month, according to Sprint. Clearwire's shareholders are scheduled to vote July 8 on Sprint's purchase, a move already recommended by Clearwire's board of directors.
In a statement, Sprint CEO Dan Hesse thanked the FCC for its review and said that "just two years ago, the wireless industry was at the doorstep of duopoly, but with these transformative transactions, we are one step closer to a stronger Sprint which will better serve consumers, challenge the market share leaders and drive innovation in the American economy."
The merger could result in Sprint becoming "a more aggressive provider in the market with a better network" that will likely result in lower prices and differentiated services, said Roger Entner, an industry analyst at Recon Analytics.
"Sprint has to get into gear fast as its competitors are currently significantly more successful than they are. At this time, Sprint's biggest challenge is a resurgent T-Mobile with a new service offer that appeals to new customers," he said.