Pedestrians walk past a Softbank Corp. store in Tokyo on Monday. Softbank agreed to pay $20.1 billion to acquire about a 70 percent stake in Sprint Nextel Corp. as Japan’s third-biggest mobile-phone operator seeks growth overseas amid a declining local market (Kiyoshi Ota/BLOOMBERG)

Japan’s Softbank on Monday announced a $20 billion takeover of Sprint Nextel, a deal that breathes new life into the struggling U.S. wireless carrier and holds out the prospect of increased competition and lower prices for consumers.

Sprint Nextel, the nation’s third-largest mobile operator, had been left further in the dust as industry leaders AT&T and Verizon Wireless bulked up. But this deal, along with T-Mobile’s recent bid for Metro PCS, revives a national rivalry with two underdogs newly motivated to lure away consumers from the bigger companies.

In the near term, analysts say, that could mean consumers will continue to have access to data plans that charge one price for unlimited use — a practice the biggest companies have abandoned. T-Mobile will focus on frugal urban customers through cheaper, no-contract plans.

“Having competitors to Verizon and AT&T has been critical because they provide more options and put pressure on the big carriers,” said Matt Wood, policy director at Free Press, a media advocacy group. Consumers paid an average of $86 on monthly wireless bills in 2011, up 25 percent from four years earlier, he said.

Through the deal, Sprint will get relief from its crippling $21 billion debt burden. Its financial troubles have stalled upgrades of network speeds to compete with faster services that Verizon Wireless and AT&T have introduced in major U.S. cities.

Sprint chief executive Dan Hesse said that if the deal closes, the company will shift from survival mode to an “investment phase.”

In a joint news conference in Tokyo with Softbank Chairman Masayoshi Son, Hesse referred to the U.S. market as a “duopoly” that could be broken by the “pro-competitive and pro-consumer” deal. Verizon Wireless and AT&T each have around 100 million subscribers. Together they hold six out of 10 mobile device contracts. Sprint is a distant third with 56 million subscribers.

Sprint’s problems are largely of its own doing. It is still reeling from a disastrous and expensive merger with Nextel in 2004, years of poorly rated customer service and its inability to get the iPhone on its system until last year.

The Justice Department and Federal Communications Commission, which rejected AT&T’s $38 billion bid for T-Mobile last year, will probably see consumer benefits to Softbank’s investment, analysts said. Because the deal involves a majority foreign owner, the transaction will be evaluated by the Treasury Department’s Committee on Foreign Investment in the United States for any national security concerns.

“Almost any other deal outside of Verizon Wireless and AT&T Mobility will likely have little issues getting regulatory approval,” Christopher King, an analyst with the investment firm Stifel Nicolaus, wrote in a research note.

Softbank will get a 70 percent stake in Sprint Nextel by buying $12.1 billion in existing shares, at $7.30 per share. Sprint is also issuing $8 billion in new shares that Softbank will buy at $5.25 per share. If for any reason the deal does not go through, Sprint will get $600 million in a breakup fee.

Analysts expect the deal to close by the middle of 2013.

The investment represents the biggest foreign purchase by a Japanese firm and illustrates a recognition that the Asian nation can no longer look inward for growth.

The Japanese tech industry has atrophied as South Korea, China and the United States have established new dominance in televisions, cellphones and music players.

Further, Japanese consumers are aging and not showing as much interest in spending more each year for wireless plans. In contrast, the United States has become one of the most lucrative wireless markets in the world.

“When we make a challenge, usually risk comes along with it,” Son said. “I know it’s not an easy path to go business-wise.” But then Son noted Japan’s low birthrate and added, “However, without challenges [into new markets] we may face even bigger risks.”

Sprint Nextel will keep its headquarters in Overland Park, Kan., and Hesse will remain chief executive. But Softbank said it will be heavily involved in its U.S. investment, which it sees as a key piece of its future — something Softbank’s Son thinks a lot about. He famously has created a 300-year strategic plan for his tech firm that calls for more foreign investments.

With a combined subscriber base of 96 million users in Japan and the United States, Softbank and Sprint will have more leverage in negotiations with smartphone and tablet manufacturers. Sprint Nextel’s deal last year with Apple to sell the iPhone stemmed a years-long hemorrhaging of customers. But the agreement with Apple is estimated by experts have cost Sprint more than $10 billion.

Other savings may come from consolidating contracts with their common supplier of network equipment, Ericsson.

“What this deal means for competitors is you have a potential powerhouse on your hands that has a ton of spectrum and now, finally, the finances they need to build out a system,” said Roger Entner, an analyst and founder of the Recon Analytics consulting firm.

“What this means for consumers is the potential to sustain unlimited plans much longer and new and innovative pricing plans,” he said.

Softbank has greater access to loans, given Japan’s low interest rates and the strong yen vs. the U.S. dollar. The Japanese company’s access to funds is fueling speculation that Softbank may also try to take over Clearwire, a national wireless carrier in which Sprint holds a 51 percent stake.

Clearwire also is burdened with debt but is in possession of a vast trove of airwaves compatible with Softbank’s system in Japan.

Investors in Softbank were wary of the deal, and the stock dropped 5 percent to $14.73 on Monday. Sprint’s stock closed slightly lower, down 0.7 percent to $5.69 after receiving a big boost last week on takeover rumors.

Shares of Kirkland, Wash.-based Clearwire ended up 16 percent at $2.69 on takeover speculation.

Harlan reported from Tokyo. Hayley Tsukayama contributed to this report.