Softbank\'s proposed $20.1 billion deal to acquire 70 percent of Sprint Nextel (NYSE:S) will allow Sprint to better compete against Verizon Wireless (NYSE:VZ) and AT&T Mobility (NYSE:T) and will benefit the wider US wireless market, analysts said.

The deal will give Sprint $8 billion in new capital and may spark for further industry consolidation, though Sprint and Softbank pointedly noted that the transaction does not require Sprint to take control of Clearwire (NASDAQ:CLWR). Sprint holds a 48 percent stake in that company.

Sprint CEO Dan Hesse, who will remain CEO of the newly recapitalized carrier, said the deal will be a boon for Sprint and the wider industry. "This is pro-competitive and pro-consumer in the U.S. because it creates a stronger No 3. It competes with the duopoly of AT&T and Verizon," he said at a meeting with investors, according to Reuters. "When you look at what Softbank has accomplished in Japan with the No 3 carrier, it\'s something we can learn from."

Above all, analysts said, the deal was a major win for Sprint, which Hesse has said could start turning a profit in 2014 following seven years of losses. BTIG analyst Walter Piecyk said before the deal became official that the cash infusion could put Sprint in a much stronger position to compete with AT&T and Verizon and feed off a continual exodus of customers from T-Mobile and MetroPCS.

Sprint is in the middle of its multibillion-dollar Network Vision network upgrade. As part of that project, Sprint is deploying LTE, improving its CDMA network and shutting down its iDEN network. Although the Softbank deal will not help Sprint catch up with Verizon and AT&T in the race to deploy LTE, it could give Sprint the financial firepower to compete with them on more even footing in the years ahead.