Mayumi Negishi

Japanese telecom company SoftBank Group is orchestrating a deal between US satellite startup OneWeb and debt-laden satellite operator Intelsat SA in an attempt to deliver faster and cheaper internet connections world-wide.

OneWeb, which is 40 percent-owned by SoftBank, will buy Intelsat, combining two very different types of satellite fleets that would offer low-cost, versatile connectivity spanning the globe. As part of the deal, SoftBank will inject $1.7 billion into the combined company, in which it will hold a 40 percent stake. The deal, which is subject to approval by Intelsat bondholders, would lower Intelsat’s roughly $14.5 billion debt by about $3.6 billion, while allowing OneWeb to further expand its ambitious satellite-production and deployment plans in the next decade.

SoftBank gave a glimpse of its plans to tackle the US cellphone market, unveiling a deal to develop low-cost smartphones for its Sprint unit and a new service that would allow unlimited downloads from select applications.

SoftBank said that together with fellow Japanese company Sharp it has developed a smartphone with near-frameless displays that it plans to sell through Sprint. It also introduced App Pass, a service that it plans to launch later in August, which will have a lineup of 100 applications as diverse as games, recipes and free access to news.

SoftBank and US-based Sprint will offer the handset, the Aquos Crystal, exclusively. App Pass will be preinstalled on the handsets.

Sprint may have given up its chase for T-Mobile US but it still thinks it can take on bigger rivals AT&T and Verizon Communications -- for now. Masayoshi Son, chief executive of Sprint parent SoftBank said the No. 3 US wireless carrier is ready to pare costs and do battle on prices as its network upgrade nears completion.

Son declined to elaborate beyond saying Sprint is testing new pricing plans, and will adopt Softbank's fighting spirit under Marcelo Claure, who was recently named Sprint CEO.

SoftBank halted plans to shuffle its Japanese assets, canceling a move that would have resulted in an extra ¥450 billion ($4.4 billion) in the Internet and telecom firm's war chest for acquisitions.

Japan representatives said the company changed its mind after studying the challenges in operating its own network and setting pricing plans. Now all the parties say the deal has been scrapped.

Some investors said they were troubled by corporate-governance issues in the now-abandoned deal. SoftBank was an early investor in Yahoo of the US and retains a small stake in the US firm, which in turn owns 35.5% of Yahoo Japan. In Japan, SoftBank operates one of the big three mobile-phone carriers and owns eAccess, the No. 4 player that specializes in data plans.

At a meeting with Sprint executives in October, the chief executive of parent company SoftBank lost his temper about the mobile carrier's advertising, complaining that it wasn't luring enough new customers.

"Are you stupid?" yelled Masayoshi Son, who engineered the Japanese company's takeover of the No. 3 wireless provider in the US in 2103 for about $22 billion, according to three people in the room. He slammed his fist on a table and suggested that Sprint fire all its ad agencies and start over.

The 56-year-old Son, a maverick billionaire and one of Japan's best-known CEOs, wants to use Sprint to upend the US wireless industry much the same way he did in Japan with a takeover of beleaguered Vodafone Japan in 2006. He blames a lack of competition between AT&T and Verizon Communications, which together have more than two-thirds of US mobile-phone customers and nearly all the industry's profits, for what he says are slow networks that cost consumers too much.

Son has established a shadow headquarters in San Carlos (CA), a Silicon Valley city near Apple and Google. Son is bringing in about 1,000 SoftBank employees from Japan, who will try to help turn around the struggling mobile carrier and develop new services that SoftBank can use back at home. [March 7]