Japan's Softbank Mobile is taking a multi-billion dollar short-cut to building a high-speed wireless network compatible with the new iPhone 5 by acquiring rival carrier eAccess.
The US$2 billion deal was signed and announced on Monday and could mean that iPhone 5 users gain within a few weeks significantly better LTE coverage, Softbank CEO Masayoshi Son said at a Tokyo news conference.
Both Softbank and rival KDDI recently began rolling out LTE networks for their iPhone 5 customers, but the networks are in their early stages and don't have great coverage. Softbank had been marching towards the goal of 20,000 base stations by March next year. The eAccess network adds an additional 10,000 base stations.
"As you know, Softbank and KDDI are locked in a tough fight," said Son. "We both offer the iPhone 5 and there's a harsh battle going on. It's a good thing, but it's all about who can expend the most sweat to build the network fastest. What we're announcing today is an expansion that doesn't require any sweat."
Softbank and KDDI are both using 10MHz of spectrum in LTE band 1, which uses frequencies in the 2.1GHz range, while EAccess uses band 3 frequencies in the 1.8GHz range. Softbank's iPhone 5 users should get access to the band 3 network within a few weeks after Softbank and Apple complete network tests, Son said.
Another benefit Softbank customers will see is an earlier introduction of the company's LTE tethering service, which will launch a month early on Dec. 15, Son said.
Before Monday's deal, Softbank was Japan's No. 3 carrier and was rapidly approaching second-place KDDI in terms of subscribers. The deal will put it ahead, according to market data presented by Son. He said the combined Softbank and eAccess would rank as Japan's second largest carrier.Softbank's lack of bandwidth and poor reputation for network quality have been sources of complaints among customers, however, even as the company made major investments in strengthening its network and obtained additional bandwidth from the government in recent years.With the launch of the iPhone 5, the company had been expected to add more load to its strained networks, so Monday's deal should help alleviate congestion.
Softbank, eAccess and KDDI all lag NTT DoCoMo, Japan's biggest carrier, which offers the rival Samsung Galaxy S3 and launched its LTE network back in 2010.
Martyn Williams covers mobile telecoms, Silicon Valley and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn's e-mail address is email@example.com
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.