SoftBank buys eAccess to create global LTE band, eyes up Sprint and MetroPCS

Early last week, SoftBank, owner of Japan’s third largest mobile network operator, announced that it is in the process of acquiring eAccess. eAccess owns Japan’s fourth largest mobile network operator, E-Mobile. Through acquiring E-Mobile, SoftBank Mobile will become the second largest mobile network operator, surpassing au by KDDI (its closest competitor, the current number two).

While last week was focused more onT-Mobile acquiring MetroPCS, this announcement is no less of a shake up in the wireless industry. Japan’s industry is far more concentrated than the United States, containing just four wireless companies for the whole country. NTT Docomo, au by KDDI, SoftBank, and E-Mobile. Foreigners who’ve used wireless services in Japan from 2003 to 2006 would know of SoftBank Mobile by its older name: Vodafone, as it used to be Vodafone Japan before the Vodafone Group sold it to SoftBank.

While NTT Docomo has two thirds of the subscriber base in Japan, the rest is divided up among au by KDDI, SoftBank, and E-Mobile. E-Mobile has been the typical maverick, offering plans that seem outrageously generous by competitors, while SoftBank has been aggressive in offering typical plans at lower rates and catering to those in the international community that visit or stay in Japan by offering special services for foreigners.

While most of the information presented by SoftBank isn’t very interesting, there was one unique tidbit: SoftBank plans to reconfigure E-Mobile’s UMTS band IX (1.7GHz) network into a global band for LTE. The presentation didn’t make it immediately clear which global band it was referring to, so we contacted SoftBank about it.

According to Matsuhiro Kurano of SoftBank Group Public Relations, SoftBank intends to reconfigure E-Mobile’s 1.7GHz network into a DCS (1.8GHz, band class 3) LTE network to support more global LTE devices. In particular, the iPhone 5 supports this band, as well as nearly all LTE devices sold in Europe and mainland Asia. The reason it can do this is because UMTS band IX is made up of frequencies entirely on the upper half of the global DCS band.

By making the network compatible for DCS LTE equipment, SoftBank makes its network much more attractive to foreigners who want to use their devices on its network. Japanese subscribers will soon be able to import a wide selection of European and Asian LTE devices and use it on SoftBank’s network. Finally, it opens Japan up to LTE roaming with SoftBank by European and Asian network operators.

By adding E-Mobile’s DCS-compatible spectrum, SoftBank will be able to offer support for HSPA+ devices that work on 900MHz (band VIII) and 2100MHz (band I), FD-LTE devices that work on 1800MHz (band class 3) and 2100MHz (band class 1). Separately, SoftBank will soon also be able to offer support for TD-LTE devices on 2500MHz (band class 41, the same band that Clearwire will use).

Oddly enough, SoftBank is still calling the DCS band 1.7GHz, though the common frequency name is 1.8GHz. This is potentially because the uplink frequencies in the DCS band are actually in the 1.7GHz range. This is also for the same reason that the uplink frequencies for AWS are called 1.7GHz as well (more specifically, the lower half of the DCS uplink frequencies is used for AWS uplink frequencies).

By and large, this is a very smart move for SoftBank. It beefs up its subscriber base to jump up to the number two spot and get better, more unique devices. It also gives SoftBank an additional 10,000 cell sites to be able to beef up capacity quickly, too. And finally, it allows it to further its own objectives in growing its business in the unique way that it has over the years.

Finally, we should also point out that SoftBank is in talks with Sprint Nextel to buy as much as 70% of the US company, which would make it the third largest mobile carrier in the world. Since the news broke, SoftBank’s stock price has plunged 17%, signaling a lack of support from Japanese investors — while Sprint’s stock surged 14% higher in the US. SoftBank is also apparently interested in MetroPCS, another US mobile carrier. Both acquisitions combined would cost the Japanese carrier around $25 billion.

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