Sprint Nextel, whose investors backed a takeover by SoftBank on Tuesday after an eight-month fight, is now preparing to use the firepower of its soon-to-be parent company to target Verizon Wireless and AT&T.
The company stands to get about $5 billion from Tokyo-based SoftBank to help bolster its network and make acquisitions.
While Sprint would have received more cash under a previous agreement that was changed to increase the payout to investors, the long-struggling company now has the wherewithal to better challenge its larger rivals.
Now that the drama of the battle for Sprint has ended, SoftBank can focus on building a better wireless-data network that is needed to compete with AT&T and Verizon, said Walt Piecyk, an analyst at BTIG in New York.
Sprint, a distant third to Verizon and AT&T in the U.S. wireless market, is counting on a speedy new LTE network to win over customers and bring service to a range of devices.
For SoftBank, a Japanese carrier with global ambitions, the idea is to apply its expertise in building fourth-generation networks and use Sprint as the stepping stone to a mobile-phone empire.
The combined company will be the sixth-largest telecommunications company globally by revenue and the second-biggest among mobile Internet carriers, according to data compiled by Bloomberg.
Sprint shareholders overwhelmingly approved the $21.6 billion deal at a meeting Tuesday, with about 98 percent of the votes cast favoring the transaction.
SoftBank, which has three of the four regulatory approvals needed to do the Sprint deal, still requires a final nod from the U.S. Federal Communications Commission.
Sprint will be in a stronger competitive position, with greater financial flexibility, increased scale and additional industry knowledge and perspective, said Scott Sloat, a spokesman for Overland Park, Kan.-based Sprint.
Mark Siegel, a spokesman for AT&T, declined to comment on the threat from Sprint following the merger. Brenda Raney, a spokeswoman for Verizon Wireless, didn’t immediately respond to a request for comment.
Sprint stock has gained 21 percent this year, lifted by the bidding war.