The internet behemoth, Yahoo has finally handed over its reigns, as Verizon has announced that it will acquire the former internet search giant in an all-cash deal of $4.83 billion. Although speculated for months, this news carries a tinge of sadness for everyone who grew up using Yahoo Mail, the search engine, and the immensely popular Yahoo Messenger. But other telecom giants are viewing this deal with skepticism. According to Sprint CEO Marcelo Claure, the acquisition of Yahoo by Verizon will never reap enough benefits, as content marketing is not as strong as their core cellular business. It is Verizon’s second significant purchase after it acquired AOL in 2015 for $4.4 billion.
T-Mobile has been trying to woo customers by offering them the ability to watch Netflix, Hulu, and other video services at a reduced quality without it affecting their monthly data cap. They call it Binge On. Verizon already has their Go90 video subscription service. Sprint’s answer to the competition is allowing the customer unlimited data packs, at a slightly increased fee per month, and letting them choose what they want to watch. But Sprint has been continually raising the monthly charges for their plans, and what once cost $50 a month is now up to $75, marking a 50% increase. Sprint has also tried to gain new customers by promising lower prices than other carriers, and using the Pokemon GO phenomenon to add lures to its store, and provide expert tips on the game.
In a conference call with reporters, Claure noted that all the purchases made by telecom companies to enhance their content services have failed to succeed. This includes Sprint’s chief rivals AT&T, who bought DirecTV, and Verizon, who acquired AOL and now Yahoo to bolster their video service known as Go90. This content marketing business has become popular among telecom companies, as they look for ways to sell content along with bandwidth in order to generate more revenue. He took a jab at Verizon in the conference, mentioning that Go90 has broken all records to generate the least amount of revenue for Verizon when compared to the investment made in it.
The extra mile Sprint went to win customers over has finally paid off, with the company announcing an increase of 377,000 customer base, out of which 173,000 are of non-prepaid variety, for the first quarter of their fiscal year 2016. This is the highest addition of postpaid customers the company has seen in nine years. An area of concern for Sprint is SoftBank’s acquisition of ARM, SoftBank being the parent company of Sprint. This deal might reduce the investment capital available for Sprint, but Marcelo seemed confident about Sprint’s performance and SoftBank’s decision, adding that Sprint is now stable in the telecom market.