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Marcelo Claure, Town Hall Meetings, New Family Share Pack Plan, Unlimited Individual Plan, Discussion Thread

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I noticed an ad on Facebook for the Galaxy S8 for only $8 a month.

I also noticed every single comment on the ad was negative. People were furious that when they logged on to their accounts to take advantage of the deal, it wasn't there. New customers only.

Sure enough, when I log on, my great deal is $25 a month after my loyalty discount. Yeah, no thanks.

 

It baffles me that you would spend money on an ad that makes your customers upset.

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On 2/20/2018 at 8:44 AM, RedSpark said:

Sprint’s issuing $1 Billion of Notes.

Thoughts on this?

It shouldn't be a huge surprise based on the last earnings call (Combes strongly hinted they were looking at the high-yield market, even further so when asked a question during the Q&A); but overall, I'd say it is a pretty positive development. It shows Sprint has regained access to the high-yield bond market at terms fairly commensurate to when they last participated 3 years ago almost to the date. Plus, if you expect interest rates to rise, which certainly doesn’t seem unreasonable, now is probably as good of a time as any to lock in what you can. The other slightly positive way of looking at things is that Sprint management and Softbank appear to be comfortable with the financial position of the company right now to do this.

On 2/20/2018 at 10:58 AM, utiz4321 said:

I wonder if they had trouble getting another spectrum lease co offering to market. Why would they go for the higher interest rate of loan not back by asserts?

To the former, they strongly hinted they were going to do both. I don’t read anything regarding not being able to do something re: spectrum co. To the latter, there are plenty of reasons. The best of them being ideally the spectrum backed secured debt probably needs to be somewhat reserved for when it is actually needed. The solvency of the company to an extent was in question in early 2016 with some analysts estimating the company would run out of money unless something was done in the subsequent 18-24 months in large part due to $10+ billion in debt coming due in the following few years. The primary reason that Sprint was using spectrum backed debt vehicles, using 2.5 vendor financing options, selling future customer income at discount for money now, selling off phones and leasing them back, etc. is that the company was in such a giant liquidity pinch.  This was compounded by the fact that the company effectively lost access to the high-yield debt market at the same time.

In Early 2016, Sprint’s debt that had been issued at par was trading at about 75 cents to the dollar with coupons in the 6-8% range was yielding 12-13.5% (implying that would be Sprint’s future cost of borrowing on any new high-yield debt). Robbiati came on at roughly the same time and said the following at one of his first investor conferences, “Would you really want to tap into the high-yield market at 10%, 12%?” No. It doesn’t make any sense.” So, they went the handset leasing, spectrum backed security route, which again isn’t without it’s downfalls. When it happened in 2016 a Bloomberg article likened it to “borrowing against the tires to make car payments.” An equity analyst in a WSJ article said, “it shows what kind of bind Sprint is in, when you have to collateralize the plates and silverware.” Neither are exactly wrong.

The spectrum backed debt has two advantages for Sprint. 1) The interest rate is significantly lower than the junk bond market and 2) it is a way for Softbank to get around some of their debt covenants and end-run-around inject money into Sprint. Both of those advantages come with some costs though. The spectrum is a finite asset and they already sold 14% of it off. Secured debt is cheaper for Sprint, because it is less risky for the lenders due to the fact their bonds are secured by the asset (in this case the spectrum). If Sprint were to hypothetically default or go bankrupt they in all likelihood lose the spectrum. The other bigger factor is that as illustrated in the paragraph directly above this one, there was a time less than two years ago when Sprint really had no other realistic borrowing options other than doing this.

In a lot of ways, you’d want to preserve the capacity to do this again if you absolutely needed to in the future i.e. a “rainy day” when the market conditions aren’t favorable or the company isn’t in a financial position to obtain funding through more traditional sources. The junk-bond market isn’t going to last forever if Sprint cannot show an ability to generate actual free cash flows on a consistent basis. Furthermore, the more they collateralize assets for securitized debt the greater the potential they cut themselves off from the traditional unsecured debt markets due to covenants, seniority placement, and concerns about Sprint’s capacity to payoff non-secured debt in the event of default.  It literally could be the difference between getting 80-90% of your money back versus pennies on the dollar.

So the tl;dr of this is even if you can obtain debt cheaper by say offering 2.5 spectrum as collateral that isn't necessarily the better option. The whole reason Sprint was offering 2.5 secured debt or handset leasing vehicles was they didn't have access to traditional debt markets. It is certainly creative, cheaper borrowing that will have a place at S going forward. That said, tapping the high-yield market while Sprint can at relatively decent rates makes a heck of a lot of sense.

On 2/20/2018 at 11:08 AM, RedSpark said:

things seem like they’ll get busy in the coming 1-2 years. Perhaps Spectrum Co Lease would be used as a supplement then?

They'll tap Spectrum Co again soon based on the earnings call.

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7 hours ago, marioc21 said:

 

It's bonds that will have set payment schedules and maturity dates.  My guess is they're using this debt to pay off current debt that's about to come due.  They've done it in the past. 

While Sprint has issued debt basically to payoff debt (and they'll continue to do it as long as they aren't turning a profit, 10 years running now), I highly doubt that is the case here. They actually retired debt early last quarter. Additionally, Sprint currently has enough cash on hand to  cover their debt maturities through fiscal year 2018 (3/31/18). What they're likely doing (and what they said they'd be doing on the last earnings call) is building up money for the increase in CapEx.

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18 hours ago, RedSpark said:

That's basically peanuts. Maybe enough for protection sites. I still think that their best best is to be acquired. This payTV side lost another 121K customers. Their SlingTV is doing great however.

Edited by bigsnake49
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So this is the ad I mentioned running on Facebook.

PQcUugK.png

It is making customers upset because it reads "upgrade today" which naturally is interpreted as referring to existing customers who want a new phone. When it comes to cell companies, people have been conditioned to read "upgrade" as "get a new phone for your existing line"

And yet only when you log in to your account, is it clear that this offer is for new customers only. It feels like a bait and switch.

Sprint doesn't have the best reputation, and this kind of thing doesn't help. I started my day with zero thoughts about Sprint. I saw the ad, and thought "great". I clicked through and became disappointed and angry. The 100+ comments all expressed the same sentiment.

Spending money to make people upset is not good business.

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So this is the ad I mentioned running on Facebook.

PQcUugK.png

It is making customers upset because it reads "upgrade today" which naturally is interpreted as referring to existing customers who want a new phone. When it comes to cell companies, people have been conditioned to read "upgrade" as "get a new phone for your existing line"

And yet only when you log in to your account, is it clear that this offer is for new customers only. It feels like a bait and switch.

Sprint doesn't have the best reputation, and this kind of thing doesn't help. I started my day with zero thoughts about Sprint. I saw the ad, and thought "great". I clicked through and became disappointed and angry. The 100+ comments all expressed the same sentiment.

Spending money to make people upset is not good business.

 

I'm finding it hard for me to say this tactfully because that issue just makes my blood boil, but things like this is why Sprints image is not improving whatsoever. If they can't even stop making marketing faux pas like this then that just proves to me that they haven't really fixed the management issues that plague the company. They can make their network as great as they want but as long as marketing is run by a bunch of fools and CS is off-shored to people that can hardly speak the language of their callers let alone have the correct training to resolve issues properly, they'll never get anywhere. So this, in addition to people's sour taste about Sprint already is just continuously reaffirming their beliefs that Sprint is to be avoided like the plague.

I think if they had already fixed these marketing and CS issues people's opinions might already be making a turn for the better.

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26 minutes ago, jamesinclair said:

So this is the ad I mentioned running on Facebook.

PQcUugK.png

It is making customers upset because it reads "upgrade today" which naturally is interpreted as referring to existing customers who want a new phone. When it comes to cell companies, people have been conditioned to read "upgrade" as "get a new phone for your existing line"

And yet only when you log in to your account, is it clear that this offer is for new customers only. It feels like a bait and switch.

Sprint doesn't have the best reputation, and this kind of thing doesn't help. I started my day with zero thoughts about Sprint. I saw the ad, and thought "great". I clicked through and became disappointed and angry. The 100+ comments all expressed the same sentiment.

Spending money to make people upset is not good business.

Im a bit confused, what are they offering in this AD, all I see is the save $30 which is  the usual device upgrade/activation fee.

 

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6 minutes ago, nexgencpu said:

Im a bit confused, what are they offering in this AD, all I see is the save $30 which is  the usual device upgrade/activation fee.

So there are actually 2 ads running with slightly different text, but on Facebook theres no way to search for a specific ad to show you, I just have to wait until it pops up again. Because they are part of the same campaign, the comments actually appear on both ads, which is odd.

You are correct, this one in the screenshot appears to be talking about removing the $30 activation fee. A second ad that looks identical but with different text lowers the cost of the monthly flex lease price by about $25, so the phone costs $8 a month.

Personally, it was the $8 a month one that caught me eye, and after logging in I found out it wasnt for me

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7 minutes ago, jamesinclair said:

So there are actually 2 ads running with slightly different text, but on Facebook theres no way to search for a specific ad to show you, I just have to wait until it pops up again. Because they are part of the same campaign, the comments actually appear on both ads, which is odd.

You are correct, this one in the screenshot appears to be talking about removing the $30 activation fee. A second ad that looks identical but with different text lowers the cost of the monthly flex lease price by about $25, so the phone costs $8 a month.

Personally, it was the $8 a month one that caught me eye, and after logging in I found out it wasnt for me

Ah ok gotcha. Carriers always try to be somewhat vague when it comes to this stuff, same like the car industry (granted nowhere near as bad as car industry) But I could see people getting lured in by this without even qualifying and end up with something else, which is somewhat the advertisers intent. Not entirely malicious but not 100% kosher and somewhat annoying.

 

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23 minutes ago, lilotimz said:

 

So coming soon to ALU-land?!

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7 hours ago, nexgencpu said:

FCC supposedly gonna help fund network expansion into rural areas..

https://www.androidauthority.com/fcc-billions-for-10-mbps-lte-rural-areas-840043/

Rural user here, all LTE connectivity except the POTS line. I used the savings from dumping CableCo -(that went out when it rains) to buy LTE equipment that is capable of (aggregated) 2 Gb p/s. If I add em all up I get actual about 60 or 70 Mb p/s. This is without any company CPE or "fixed wireless" dedicated frequencies. Shooting for 5/1 or 10/2 in a certain swath is lame and essentially make-work for air DSL when we have actual GHz of spectrum becoming available and software defined networking adaptive to a wide range of frequencies.

The equipment is already there for much more, the carriers would like you to think having a dedicated, deprioritized channel coming from one site on one antenna is an actual effort at deploying good home service. Ffs just let people connect to your network in these areas and it won't be brought to it's knees, many do it every day. If you can deploy in publicly leased, licensed or even unlicensed spectrum in the hundreds of MHz you can service rural areas fully. Why would they spend millions and lobby for such large geo tracts?

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15 hours ago, nexgencpu said:

FCC supposedly gonna help fund network expansion into rural areas..

https://www.androidauthority.com/fcc-billions-for-10-mbps-lte-rural-areas-840043/

There will be an auction where you bid to provide such broadband for the lowest price. Maybe Sprint can bid in that auction to help defray some of their rural expansion costs. 

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16 minutes ago, mnjeepmale said:

I saw that on my news feed earlier. Don't know if it's a good or bad thing.

Sent from my SM-N950U using Tapatalk
 

Sounds like Marcelo is cleaning house again. I guess the management hierarchy he previously implemented wasn’t working well enough?

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22 hours ago, derrph said:

Geeze again

 

 

Sent from my iPhone using Tapatalk

Perhaps Michel Combes, as new President and CFO, wanted this organizational change:

http://newsroom.sprint.com/michel-combes.htm

Edited by RedSpark
Clarified

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Galaxy S9 pricing is pretty varied by carrier:

Samsung: $720
Tmobile: $720
AT&T: $790
SprintL $792
Verizon: $799

Disappointed that Sprint is charging a premium with the other two bad companies.

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Galaxy S9 pricing is pretty varied by carrier:
Samsung: $720
Tmobile: $720
AT&T: $790
SprintL $792
Verizon: $799
Disappointed that Sprint is charging a premium with the other two bad companies.
With that price it will not stay with Sprint.

Sent from my SM-G950U using Tapatalk

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You also have to factor in early upgrades and forgiven debt from upgrading early. Those are full term prices

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