Softbank said acquisition target Sprint Nextel will spend $16 billion to boost the business over the next two years, in a bid to take on larger rivals Verizon and AT&T.
Sprint Nextel plans around $8 billion in capital spending this year and around $8 billion next year, Softbank CEO Masayoshi Son told The Nikkei. Spending will slow to around $6 billion thereafter.
Part of the planned capex budget will come from cost savings and synergies associated with the merger.
Son added that Softbank and Sprint will jointly open an R&D center in Silicon Valley, which will develop both hardware and software technology.
US regulator FCC last week confirmed reports that it had approved Softbank's plan to acquire a 78% stake in Sprint Nextel for $21.6 billion, clearing the final hurdle to the deal closing.
The FCC also approved Sprint's planned purchase of the remaining shares in wireless broadband affiliate Clearwire. Both Softbank and Sprint beat out unsolicited rival bids from US satellite TV operator Dish Network to clinch the acquisitions.
With the Softbank-Sprint merger now approved, credit ratings agency Standard & Poor's has downgraded Softbank's debt rating by two places to junk status, Reuters reported.
The agency cited financial risks associated with the major purchase as the reason for the downgrade, but noted that Softbank's outlook remains stable, partly due to the cost reduction potential of the merger.