Trump Takes Undeserved Credit For Softbank Investment & Job Promises, As Company Sells Him On A T-Mobile Sprint Merger
from the Sad! dept
"There’s a key figure who will determine if Son makes another run at T-Mobile: the yet-to-be named new head of the FCC. If Son feels that person is more amenable to a combination to take on market leaders AT&T Inc. and Verizon Communications Inc., he will probably try again, said the people, who asked to not be identified because the matter is private."Fast forward to this week, and Son appears to have found a ray of hope named Donald Trump.
Trump and Son met this week at Trump Tower in Manhattan, shortly afterwards announcing a "new plan" to bring $50 billion in investment and 50,000 new jobs to the United States. Trump was quick to proclaim on Twitter that this investment and job growth was solely thanks to his existence:
Masa (SoftBank) of Japan has agreed to invest $50 billion in the U.S. toward businesses and 50,000 new jobs....— Donald J. Trump (@realDonaldTrump) December 6, 2016
Masa said he would never do this had we (Trump) not won the election!— Donald J. Trump (@realDonaldTrump) December 6, 2016
Most news outlets were quick to unskeptically repeat the idea that this investment was somehow a Trump master stroke, despite no actual details being released after the meeting. But a few outlets pointed out that this "new $50 billion investment" appears to be something the company actually announced in October as part of a pre-existing, four-year global investment strategy into a variety of startups and other projects. Previous reports on the fund note that while some of this money could come to the States, Softbank's $35 billion investment into the fund isn't even U.S. specific.
In short, the $50 billion investment and the 50,000 jobs are largely fairy tale numbers wholly unrelated to Donald Trump doing much of anything. It's also worth noting that when asked, Son himself wasn't actually willing to specifically credit Trump with any of it:
"...The contours of the deal Trump announced Tuesday appear in line with the company’s previous investment plans. In October, SoftBank announced it would create a $100 billion fund – with the backing of Saudi Arabia – in a bid to become the “biggest investor in the technology sector,” Son said at the time.So in short, Softbank's investment pledges have absolutely nothing to do with Trump, and were announced before Trump even won the election. Not that you'd know that by reading 90% of the news coverage about the plan. Meanwhile, where these 50,000 jobs will be coming from -- and whether they'll actually materialize at all -- is anybody's guess. The job growth certainly isn't happening at Sprint, where the company under Softbank ownership has been consistently laying off thousands of employees as it tries to trim $2.5 billion in operation expenses annually after years of continued missteps.
Son on Tuesday did not say whether the new investment pledge was a result of Trump's victory, but he did say he was celebrating Trump's White House win.
"I just came to celebrate his new job,” Son said. “I said, ‘This is great, the U.S. will become great again.’"
It's relatively clear Masayoshi Son is pining for an FCC that will let the company finally fuse Sprint with T-Mobile. And there's every indication he'll be getting his wish from the new FCC. Trump's telecom advisors are a who's who of industry-tied think tankers and lobbyists, all of whom have publicly stated the FCC should be hamstrung and defunded. One of them doesn't even believe telecom monopolies are real. Their selection for FCC boss, whoever it is, is extremely unlikely to support using regulatory authority to block mega-mergers, regardless of Trump's campaign promises to stop such deals.
While massive job creation promises are routinely bandied about in the run up to telecom mega-mergers, those promises never actually materialize. In fact the opposite happens as redundant positions are eliminated and customer support and service corners are cut to accommodate the debt taken on from the deals. Meanwhile, eliminating a major player in the wireless space results in consistently worse service and higher prices. This is, despite ample historical precedent, a lesson we're culturally unwilling to intellectually digest. Rinse, wash, repeat.
That said, this little public relations fracas was still a win for Trump and Masayoshi Son. Trump gets to falsely take credit for a several-month-old plan he had nothing to do with, and Son gets to fill Trump's head with the idea that if he supports his looming merger -- money, jobs and miracles will rain from the sky.