SoftBank Profit Tops Estimates as Sprint Merger Talks End

SoftBank Group reported quarterly profit that topped analysts’ estimates, as its U.S. unit Sprint faces an uncertain future after talks to merge the carrier with T-Mobile collapsed, according to Bloomberg.

Operating profit was 396 billion yen ($3.5 billion) in the period ended September, the company said in a statement. That’s more than the 322 billion yen average of analysts’ projections compiled by Bloomberg. Sales came in at 2.23 trillion yen, matching predictions.

SoftBank’s founder Masayoshi Son has relied on a steady flow of cash from Japanese wireless and telecom operations to fund new endeavors, while Sprint has struggled to return to profit and stem subscriber losses. After merger talks with T-Mobile fell apart over control, Son needs to find a new way to secure Sprint’s long-term future.

The billionaire is also in the process creating the $100 billion SoftBank Vision Fund with the Saudis, Abu Dhabi investor Mubadala and other backers to speed up investments in technology startups abroad. Son addressed questions about Sprint’s future and the Vision Fund at a briefing.

“The board decided that we could not agree to a merger of Sprint and T-Mobile that would result in the loss of control,“ Son said at the Tokyo Stock Exchange. Sprint’s finances are improving, so therefore “it will be able to secure funding on its own,“ he said.

Under SoftBank’s control, Sprint has succeeded in halting a customer exodus, but progress came at a cost and the company hasn’t had a profitable year in a decade. Holding on to subscribers would also require investments into network improvements that the fourth-largest U.S. carrier may struggle to pay for. About half of Sprint’s $38 billion in debt and obligations is coming due over the next four years and the company is also facing potentially costly investments into next-generation wireless technology.