SoftBank CEO Masayoshi Son lashed out at fellow billionaire Charlie Ergen, saying he doesn’t have the expertise to run Sprint Nextel, the mobile-phone company both men are trying to take over.
Ergen, the chairman of Dish Network, has no wireless background, making him a poor fit to run Sprint, Son said Tuesday in Tokyo. He questioned the wisdom of Ergen’s strategy to combine Sprint with a satellite-television company instead of another mobile-phone carrier like his own.
“I just deliver the results, instead of big-mouthing about the future,” Son said. “Do you want to attach a satellite dish to your smartphone? It’s going to become much heavier. I don’t see any real meaningful value that he can offer to the smartphone customers.”
With the volley against Ergen, Son sought to cast doubt on Dish’s $25.5 billion offer to acquire Sprint, a proposal that investors such as Omega Advisors have called superior to SoftBank’s $20 billion bid.
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Sprint may be able to turn a profit starting next year if shareholders accept SoftBank’s offer, Son said.
“Starting in the second half of this year when our deal is closed, it will start showing early symptoms” of a turn toward profit, he said. “And by next year it will start having a real benefit of turning around. Net income will probably start being positive very soon.”
Dish said Tuesday it continues to believe its offer is better than SoftBank’s.
“We remain confident that the Sprint board will share our view that the Dish proposal is superior by offering Sprint shareholders greater value with a higher price and more cash,” Dish said. “A combined Dish/Sprint will benefit from synergies and growth opportunities that are not attainable through the pending SoftBank proposal.”
In the SoftBank deal, Sprint would be fully profitable by 2015, in part because of $2 billion in annual savings as the two companies pool their phone and network-equipment purchasing to buy in bulk, Son said Tuesday. The companies will together have a $20 billion budget for devices and network parts, he said.
SoftBank has more experience in wireless phone networks than Dish, which gets most of its sales from satellite broadcasting. The Japanese company’s offer gives the U.S. carrier more buying power and less debt to repay than Dish’s bid, Son said.
“People ask me, ‘Will SoftBank be increasing the price for the offer?’ Why should we?” Son told reporters in Tokyo. “We are already providing a better deal than the Dish proposal.”
He returned repeatedly to what he called Ergen’s shortcomings, saying the Dish chairman was not “behaving himself.” He criticized Ergen for making an unsolicited offer, while SoftBank worked with Sprint management to develop a proposal
He noted that Dish is less profitable than its U.S. satellite competitor, DirecTV. And he said the Dish offer would give Ergen too much control of the combined company.
“Many people tell me Masa Son is a one-man-show company, but I’m not that much aggressive to give 85 percent voting power to myself,” he said. “I am behaving a little bit better.”
Son’s stated goal is to create the largest mobile-services provider in the world by revenue, surpassing Verizon, Vodafone Group and China Mobile. His strategy would ultimately benefit investors more than what Ergen can offer them, he said.
“He himself admits he’s an amateur to our mobile industry,” Son said at the Tokyo event.
Sprint has tentatively set June 12 as the date for a shareholder vote on SoftBank’s offer.