Sprint Nextel Corp. shareholders are expected to approve SoftBank Corp.’s acquisition of 78 percent of the company today, and analysts and a Sprint spokesman say the deal provides potential for economic growth in Kansas City.
SoftBank’s $21.6 billion offer drove rival bidder Dish Network Corp. out the running for ownership of Sprint, the country’s No. 3 wireless carrier.
The SoftBank deal keeps the corporate headquarters and the management team headed by CEO Dan Hesse on the company’s campus in Overland Park, Kan. according to Sprint spokesman John Taylor.
“It’s a good thing for Kansas City that SoftBank got it,” said Chris Antlipz, telecom industry analyst at Technology Business Research. “Dish would have torn it apart and maybe even moved some operations to Colorado.” Sprint has over 7,000 employees in the Kansas City area.
Antlipz also noted that while Dish would want Sprint as an accessory for its mobile television delivery platform, SoftBank’s deal lets Sprint operate as its own entity, just with more cash to invest in its network operation, potentially leading to more jobs.
Ryan Weber, president of KCNext, an organization that supports and promotes the Kansas City area’s tech companies, also pointed out advantages of the SoftBank deal. “Sprint’s leaders have been huge in helping local tech startups make connections with larger markets,” Weber said. “And with a large of amount of tech talent in KC it’s good for both Sprint and the community for Sprint to stay here.”
For example, Sprint acquired Kansas City-based Handmark Inc. and its subsidiary One Louder Apps Inc. in May.
Weber also notes that if a Sprint takeover would have caused the company to leave Kansas City, there would be a ripple effect on the local economy. Supporting partners with a presence in Kansas City such as Ericsson, which operates Sprint’s wireless network and employs hundreds in its building on the Overland Park campus, would relocate as well and take jobs with them.
Freelance telecom industry analyst Jeff Kagan doesn’t foresee SoftBank’s takeover changing any of Sprint’s sponsorships of Kansas City-area events such as this week’s 1WeekKC. Local endorsements and national sponsorships like NASCAR’s Sprint Cup have reaped benefits for the wireless carrier, he said.
Sprint sent a memo June 14 to employees that assured them SoftBank has a track record of turning around companies “without conducting employee reductions” and that the transaction will “position Sprint to grow and create new jobs.” The memo also stated that after the transaction is closed, the new Sprint will review salaries to determine if adjustments are needed, but in general employees’ compensation will not see significant changes. Benefit plan changes aren’t anticipated for at least two years following the transaction, the company said.
Taylor said that the deal will hopefully mean “growth for the company and growth of opportunity for our employees.”