Sprint’s Son Pitches Skeptical Washington on Competition
Sprint Corp. chairman Masayoshi Son came to Washington Tuesday to promote Sprint’s interest in offering home broadband service and reframe the conversation around his stalled effort to acquire T-Mobile US.
Speaking just a block from the White House, Son argued that Sprint’s new “Sprint Spark” service could bring higher-speed wireless broadband into homes and compete with traditional wired Internet providers such as Comcast, AT&T and Verizon.
“Wireless is not an alternative competition to Comcast or Verizon’s wired service,” Son said, making it clear he wants that to change.
Son’s effort to reposition Sprint as a future competitor in the U.S. broadband market represents a sort of bank-shot plan to get Washington to think about his proposal to buy T-Mobile in a different way. Federal regulators haven’t been enthusiastic about allowing more consolidation in the wireless market — particularly after they killed AT&T’s $39 billion deal to buy T-Mobile just three years ago.
But Obama administration officials do want to see more competition in the home broadband market. Regulators are expected to examine issues such as concentration of the broadband market as part of Comcast’s deal to acquire Time Warner Cable.
Comcast owns NBCUniversal, which is an investor in Re/code.
Son never said the word “T-Mobile” during his nearly 45 minute luncheon speech to the U.S. Chamber of Commerce, but his message was clearly an attempt to explain to regulators why he should be allowed to buy it.
Billed as a speech on “the promise of mobile Internet in driving American innovation, the economy and education,” the presentation was basically another pitch by Son to convince Washington that he can do for the U.S. what he did for Japan: Lower prices and raise speed by aggressively competing with incumbent providers.
“We have an issue of only two things: Low speed and high price. It’s not complicated,” Son told a crowd of FCC lawyers, lobbyists, reporters and analysts. “Let’s reduce the price by competition. Not the pseudo competition, but real competition.”
There are “only two things we need: Speed and price. High speed, low price. Today it’s the opposite. Let’s change it,” he said.
Son painted a relatively bleak picture of the U.S. wireless market, citing statistics suggesting LTE wireless broadband speeds here rank 15th among 16 countries. (He appeared to be using a weighted national average that brought down the U.S. speed to 6.5 Mbps.) He also noted that other countries, notably China, are spending far more money on wireless infrastructure.
“The U.S. is falling behind,” he said.
Son’s argument that he can shake up the U.S. market has been hurt by the fact that it is T-Mobile, not Sprint, that has taken the lead recently in shaking up the wireless market by improving its LTE network, lowering prices and letting subscribers upgrade phones more quickly.
During an interview with PBS’ Charlie Rose Monday night, Son argued that his rejuvenated Sprint, combined with T-Mobile, would bring more competition to the wireless market, even though that deal would eliminate one of four national mobile carriers in the U.S.
“We need a certain scale, but once we have enough scale to have a level fight, okay,” Son said during the interview, according to Bloomberg. “It’s a three-heavyweight fight. If I can have a real fight, I go in more massive price war, a technology war.”
Son’s effort to buy T-Mobile faces a steep climb in D.C., where Obama administration officials and regulators have been unusually candid in their negative assessments of such a deal.
FCC Chairman Tom Wheeler said he was “highly skeptical” of a Sprint-T-Mobile merger, and Justice Department antitrust chief William Baer gave an interview to the New York Times in January where he suggested the merger was a bad idea.