Saudi-backed SoftBank invests $125 million in Alphabet venture to put cellphone antennas in the sky

Japan's SoftBank Group Corp Chief Executive Masayoshi Son. (REUTERS/File Photo)
Updated 25 April 2019

Saudi-backed SoftBank invests $125 million in Alphabet venture to put cellphone antennas in the sky

  • SoftBank’s year-old HAPSMobile and Alphabet’s Loon separately have been trying to fly networking equipment at high altitudes
  • The goal is to provide high-speed Internet where ground-based towers are unreachable

SAN FRANCISCO, USA: A SoftBank Corp. business seeking to find a way to fly cellphone antennas high in the atmosphere to provide internet in underserved areas said on Wednesday it was investing $125 million in an Alphabet Inc spinoff working on the same problem.

SoftBank’s year-old HAPSMobile and Alphabet’s Loon, which spun out last July from the research incubator of the Google parent, separately have been trying to fly networking equipment at high altitudes to provide high-speed Internet where ground-based towers are unreachable.
Loon carries the gear with a large balloon, while HAPSMobile uses a large drone.
Despite Internet coverage gaps in rural areas or during natural disasters, mobile network operators, governments and other potential customers have yet to demonstrate much enthusiasm for buying skyborne technologies.
Also in the competition to fill the coverage gaps are several billionaire entrepreneurs, including Elon Musk, Richard Branson and Jeff Bezos. Each is backing separate early-stage ventures that want to beam Internet from satellites in near-Earth orbit.
Loon and HAPSMobile said on Wednesday that collaboration could be the key to adoption. They are discussing the possibility of using each others’ technology, standardizing their airborne and ground networking gear and joining forces in regulatory discussions, they said in a statement.
The companies described their partnership as a “long-term” tie-up of one of Japan’s top three wireless carriers and one of the world’s biggest tech companies.
“I’m confident we can accelerate the path toward the realization of utilizing the stratosphere for global networks by pooling our technologies, insights and experience,” Junichi Miyakawa, SoftBank’s chief technology officer and HAPSMobile’s chief executive, said in the statement.
“Even in this current era of coming 5G services, we cannot ignore the reality that roughly half of the world’s population is without Internet access,” Miyakawa added.
Loon has tested balloons for nearly a decade and expects to hold its first commercial trial in Kenya this year.
HAPSMobile emerged from technology developed by dronemaker AeroVironment Inc, which owns 10 percent of the SoftBank subsidiary.
Loon said it has the option to later invest $125 million in HAPSMobile. 


 


HP rejects Xerox takeover bid, says open to acquiring Xerox instead

Updated 23 min 12 sec ago

HP rejects Xerox takeover bid, says open to acquiring Xerox instead

  • In rejecting Xerox's $33.5 billion cash-and-stock acquisition offer, HP said the offer “significantly” undervalued the personal computer maker
  • Xerox made the offer for HP on Nov. 5 after resolving its dispute with its joint venture partner Fujifilm Holdings Corp.
NEW YORK: HP Inc. said on Sunday it was open to exploring a bid for US printer maker Xerox Corp. after rebuffing a $33.5 billion cash-and-stock acquisition offer from the latter as “significantly” undervaluing the personal computer maker.
Xerox made the offer for HP, a company more than three times its size, on Nov. 5, after it resolved a dispute with its joint venture partner Fujifilm Holdings Corp. that represented billions of dollars in potential liabilities.
Responding to Xerox’s offer on Sunday, HP said in a statement that it would saddle the combined company with “outsized debt” and was not in the best interest of its shareholders.
However, HP left the door open for a deal that would involve it becoming the acquirer of Xerox, stating that it recognized the potential benefits of consolidation.
“With substantive engagement from Xerox management and access to diligence information on Xerox, we believe that we can quickly evaluate the merits of a potential transaction,” HP said in its statement.
The move puts pressure on Xerox to open its books to HP. Xerox did not immediately respond on Sunday to a request for comment on whether it will engage with HP in negotiations as the potential acquisition target, rather than the acquirer.
HP on Sunday published Xerox CEO John Visentin’s Nov. 5 offer letter to HP, in which he stated that his company was “prepared to devote all necessary resources to finalize our due diligence on an accelerated basis.”
Activist investor Carl Icahn, who took over Xerox’s board last year together with fellow billionaire businessman Darwin Deason, said in an interview with the Wall Street Journal last week that he was not set on a particular structure for a deal with HP, as long as a combination is achieved. Icahn has also amassed a 4% stake in HP.
Xerox had offered HP shareholders $22 per share that included $17 in cash and 0.137 Xerox shares for each HP share, according to the Nov. 5 letter. The offer would have resulted in HP shareholders owning about 48% of the combined company. HP shares ended trading on Friday at $20.18.
Many analysts have said there is merit in the companies combining to better cope with a stagnating printing market, but some cited challenges to integration, given their different offerings and pricing models.
Xerox scrapped its $6.1 billion deal to merge with Fujifilm last year under pressure from Icahn and Deason.
Xerox announced earlier this month it would sell its 25% stake in the joint venture for $2.3 billion. Fujifilm also agreed to drop a lawsuit against Xerox, which it was pursuing following their failed merger.

Test for new HP CEO
In 2011 as the centerpiece of its unsuccessful pivot to software. Little over a year later, it wrote off $8.8 billion, $5 billion of which it put down to accounting improprieties, misrepresentation and disclosure failures.
More recently, HP has been struggling with its printer business segment recently, with the division’s third-quarter revenue dropping 5% on-year. It has announced a cost-saving program worth more than $1 billion that could result in its shedding about 16% of its workforce, or about 9,000 employees, over the next few years.
Xerox’s stock has rallied under Visentin, who took over last year as CEO. However, HP said on Sunday that a decline in Xerox’s revenue since June 2018 from $10.2 billion to $9.2 “raises significant questions” regarding the trajectory of Xerox’s business and future prospects.