T-Mobile LTE & Network Discussion

[jbom]

At the same time, Deutsche Telekom board members are split over whether the German carrier should sell its only growing asset, said two of the people.

 

[...] 

 

Deutsche Telekom may wait until after the Nov. 13 frequency auction before committing to a strategic decision on T-Mobile, the people said.

 

From: http://www.businessweek.com/news/2014-09-19/xavier-niel-s-iliad-said-to-face-hurdles-in-t-mobile-bid

[centermedic]

Look in TMUS investor reports.

I have to admit that a billion dollar profit is much batter than I expected. Interestingly enough it appears that the inclusion of Metro PCS actually helped T-Mo's finances. It will be interesting to see how that plays out over the next several quarters.

 

http://investor.t-mobile.com/Cache/1001189347.PDF?Y=&O=PDF&D=&fid=1001189347&T=&iid=4091145

[dnicekid]

Funny how they have been wanting to sell and now its their only growing asset??? I can understand the Softbank deal as it was sweeter but I have the feeling DT might not accept.

[jbom]

Funny how they have been wanting to sell and now its their only growing asset??? I can understand the Softbank deal as it was sweeter but I have the feeling DT might not accept.

 TMUS has been a positive asset for DT for a while now, it didn't just happen overnight

[dnicekid]

TMUS has been a positive asset for DT for a while now, it didn't just happen overnight

Yeah I know.-The point I was making is that DT was trying so hard and long to sell Tmo and Tmo is now one of their best assets...

 

The Softbank deal was more $$ so I can understand selling. Time for DT to seriously consider if they really want to let Tmo go..

 

Sorry for not being more specific.

[richy]

Just trying to order a cell spot now. I'lkl pickup a wilson amp for the car rather than their 4g booster as I want it to work when I switch to sprint. Seems like a sensible idea. I doubt they paid much per router. I'm sure there is an element of Legere twattyness about it, but on the other hand it has got them publicity and might reduce churn. 

 

Years ago in the UK companies like Vodafone were paying so much to companies to sign up subs an entire industry sprung up where you could get a free phone from an intermediary company and they would also pay your monthly line fees for the 12 months of your contract and still make a profit. I got a few phones this way. No con, they were simply paid so much in bonuses they could afford to do it. Sometimes the companies do things that seem silly, I never got to see the math behind it, perhaps Vodafone (orange did it as well) lost money or perhaps they made it back in the long term on average between all people who took advantage of the offer. 

 

Edit: called custard services, they asked a few questions, put me through to tech support. Tech support made sure I knew what I wanted (router vs booster), that it would switch me to paperless billing, that I need to inform them if I change address ( i suspect this pertains more to the booster since they have to know where they are) and that I need to return it when I leave tmo. I asked what happens if I dont return it, she said they keep the deposit, I asked how much the deposit is, she said $0 as a promotional offer. Shipping was also free via usps ground (i.e. throw it in a river and see if it gets there). When all said and done its just a router on loan, but its not bad and should help them a little. I can understand why they are trying it but I would really love to know if it pays off i.e. how much data is offloaded, how much capacity it frees up. Not that we will ever know. 

[david279]

So my router shipped today, ordered it online yesterday. I tried to get it on store but the reps would not sell it me. They insisted that I needed to be on contact or convert my prepaid account to postpaid no contract. They kept trying to sell it as a mobile device type of deal. Very uninformed reps.

[MkVsTheWorld]

"Silly electronics! Why you always gotta be so dependent on electricity?"

Lol what I was trying to say was that if your power goes out, this router becomes useless for calls. If I had this and used the WiFi calling with T-Mobile, then I'd get some kind of battery backup, just in case. I consider one of the biggest perks of having a cell phone is being able to continue using the service after widespread power outages.

[richy]

We keep the cable modem and router on a cheap UPS, it keeps them on for 6-8 hours when the power goes out (which it does a lot). For $40 is a sale it's a worthwhile consideration. 

[bigsnake49]

We keep the cable modem and router on a cheap UPS, it keeps them on for 6-8 hours when the power goes out (which it does a lot). For $40 is a sale it's a worthwhile consideration. 

Same here...It's well worth it.

[joshuam]

Geez...I honestly cannot remember the last time we've ever had a power outage. We've never had one for more than 15 mins or so...where in the heck do you all live? Lol

 

Sent from my Galaxy S5 on the Sprint Network

[bigsnake49]

Geez...I honestly cannot remember the last time we've ever had a power outage. We've never had one for more than 15 mins or so...where in the heck do you all live? Lol

 

Sent from my Galaxy S5 on the Sprint Network

Florida and travel to the Springfield, MA for business.

Edited September 22, 2014 by bigsnake49

[richy]

Hawaii.  Home of the drunk tourist .  Between them hitting poles and frequent natural disasters plus generally poor infrastructure we get a few decent outages a year.  It's no big problem. 

 

*Actually the last few weeks the worst accidents have all been drunk locals including Mr drunk at 5 am trying to drive home through the middle of the start line of the marathon. Luckily no one was injured. 

[irev210]

The sale does not have to be to Iliad -- though I drew that obvious connection earlier in this thread.  It is just that the Wi-Fi router program would create some unexpected synchronicity with Free Mobile.

 

Regardless, all of this "un-carrier" handing out of candy is a short term ploy to increase subscriber numbers.  I do not know how anyone can rationally see it any other way.  It is not sustainable long term.  T-Mobile is spending more and more per sub to acquire and retain.  In that way, Magenta is like the Denver Broncos, which are doubling down on Peyton Manning's rapidly closing window, spending accordingly like there is no tomorrow.  In another season or two, Manning will be gone, left behind will be a salary cap graveyard, and the Broncos will be awful.  That, too, is T-Mobile.  Live for today, then stick the new management with the bill down the road.

 

AJ

 

 

While I see the logic you are applying to come to this conclusion, the facts say otherwise.  it's rational to see it another way when you just look at their financials.  The facts are, T-Mobile's EBITDA margin is pretty darn healthy.  With all of this "live for today", T-Mobile has reduced margins by about 4% to add significant business to company.

 

The 4% drop in profit resulted in T-Mobile bringing in an additional 3.469 billion dollars. 

 

TMUS postpaid churn has only gone down over the past 3 years (now at about 1.5%).

Total wireless gross margins have not really changed (around 48%).

 

While originally, your thesis sounded good (I was on board with the thesis, I couldn't imagine how T-Mobile could not have higher churn) the numbers just aren't aligning with your narrative.

 

It's not good or bad, just what you are saying vs. how the company is performing aren't the same thing.

[S4GRU]

While I see the logic you are applying to come to this conclusion, the facts say otherwise.  it's rational to see it another way when you just look at their financials.  The facts are, T-Mobile's EBITDA margin is pretty darn healthy.  With all of this "live for today", T-Mobile has reduced margins by about 4% to add significant business to company.

 

The 4% drop in profit resulted in T-Mobile bringing in an additional 3.469 billion dollars. 

 

TMUS postpaid churn has only gone down over the past 3 years (now at about 1.5%).

Total wireless gross margins have not really changed (around 48%).

 

While originally, your thesis sounded good (I was on board with the thesis, I couldn't imagine how T-Mobile could not have higher churn) the numbers just aren't aligning with your narrative.

 

It's not good or bad, just what you are saying vs. how the company is performing aren't the same thing.

 

You can say what you want, but it is an undeniable fact that Tmo is spending more to gain customers.  They are spending a lot more to gain customers than they ever have.  It may, or may not pay off for them.  You make some points about how it appears to be paying off.  But it is still very early.  And Tmo customers are far more portable to other providers than any of their competitors customers.

[Conan Kudo]

T-Mobile just signed on their first LTE roaming partner: GCI in Alaska.

 

http://www.lightreading.com/mobile/4g-lte/t-mobile-gci-ink-lte-roaming-deal/d/d-id/710962?

 

Looks interesting. I wonder if it is through the roaming hub or standalone. I see they also run a CDMA network, but I imagine that is either on its way out or skeleton roaming for Sprint and Verizon?

The CDMA network used to be bigger (ACS ran the network before merging its spectrum and towers with GCI's GSM/UMTS/LTE network to form the AWN joint venture), but most of it has been turned off to make room for UMTS and LTE. More of the ACS CDMA network is being turned off all the time, since ACS is now selling GSM/UMTS/LTE devices.

 

The AWN CDMA network is basically a skeleton network that operates in a portion of ACS' wireline footprint. The other CDMA network in the state belongs to MTA (Matanuska Telephone Association), but only covers small rural areas. In fact, MTA has halted CDMA spending to focus on Verizon LTEiRA 4G deployment. MTA will also discontinue selling CDMA wireless service to customers in favor of using the Verizon Wireless brand with LTE-only service.

[WiWavelength]

While I see the logic you are applying to come to this conclusion, the facts say otherwise.  it's rational to see it another way when you just look at their financials.  The facts are, T-Mobile's EBITDA margin is pretty darn healthy.  With all of this "live for today", T-Mobile has reduced margins by about 4% to add significant business to company.

 

The dichotomy between T-Mobile and Sprint reminds me of a scripted scene in Oliver Stone's "Nixon."  Anthony Hopkins, playing the soon to be deposed Nixon, looks up at a portrait of JFK in the White House and says, "When they look at you, they see what they want to be.  When they look at me, they see what they are."

 

T-Mobile is a cult of personality.  People are excessively positive about T-Mobile, excessively negative about Sprint.  People give T-Mobile the benefit of the doubt, pleased with the present and supremely confident about what the future holds.  People hold grudges against Sprint, displeased with the present and obsessively cynical over a negative past.  But both of those are far more flawed human perceptions from failed people than they are actual objective assessments from rational individuals.

 

For example, what happens to T-Mobile's financials when it has to increase its CAPEX for its long, long, long overdue rural network modernization?  Sprint has already taken care of that, is years ahead of T-Mobile in that regard, and probably has "disrupted" T-Mobile into finally getting its rural ass in gear.

 

And what happens to T-Mobile's financials when it has to spend billions to acquire Lower 700 MHz and/or forthcoming 600 MHz spectrum?  Again, Sprint has already taken care of that.  Hypothetically, Sprint could walk away from the 600 MHz auction -- should the auction ever actually happen -- and still have nationwide low band spectrum.  T-Mobile does not have that luxury.  While Sprint has already paid its low band bill, T-Mobile has barely even started.

 

As Robert notes, it is still very early.  The cult of personality will not last, just as the "Camelot" White House came to an abrupt end -- to draw another JFK parallel.  And T-Mobile -- or whatever becomes of the pink "un-carrier" -- eventually will be left holding the bag.

 

AJ

[irev210]

The dichotomy between T-Mobile and Sprint reminds me of a scripted scene in Oliver Stone's "Nixon."  Anthony Hopkins, playing the soon to be deposed Nixon looks up at a portrait of JFK in the White House and says, "When they look at you, they see what they want to be.  When they look at me, they see what they are."

 

T-Mobile is a cult of personality.  People are excessively positive about T-Mobile, excessively negative about Sprint.  People give T-Mobile the benefit of the doubt, pleased with the present and supremely confident about what the future holds.  People hold grudges against Sprint, displeased with the present and obsessively cynical over a negative past.  But both of those are far more flawed human perceptions from failed people than they are actual objective assessments from rational individuals.

 

For example, what happens to T-Mobile's financials when it has to increase its CAPEX for its long, long, long overdue rural network modernization?  Sprint has already taken care of that, is years ahead of T-Mobile in that regard, and probably has "disrupted" T-Mobile into finally getting its rural ass in gear.

 

And what happens to T-Mobile's financials when it has to spend billions to acquire Lower 700 MHz and/or forthcoming 600 MHz spectrum?  Again, Sprint has already taken care of that.  Hypothetically, Sprint could walk away from the 600 MHz auction -- should the auction ever actually happen -- and still have nationwide low band spectrum.  T-Mobile does not have that luxury.  While Sprint has already paid its low band bill, T-Mobile has barely even started.

 

As Robert notes, it is still very early.  The cult of personality will not last, just as the "Camelot" White House came to an abrupt end -- to draw another JFK parallel.  And T-Mobile -- or whatever becomes of the pink "un-carrier" -- eventually will be left holding the bag.

 

AJ

 

Great point on different modernization efforts.  I love the fact that Sprint basically forced T-Mobile's hand into upgrading rural areas and in many ways, T-Mobile has forced Sprint to refocus on deploying B41 in urban areas.

 

In terms of CAPEX, when we look at the two (not adjusting for subs, clearwire, etc) we see that both have invested roughly the same in their network.

 

Sprint 2010-2014

21,895

T-Mobile 2010-214

19,770

 

As far as future capital spending, both are expected to continue to invest heavily.

 

While sprint has already spent a lot of money, they are also much more leveraged (net debt/ebitda=468.5% vs. 311.3% for T-Mobile) .  While we can discuss the advantages/disadvantages to each business strategy, that's a different topic.  You mention that, for example, T-Mobile doesn't have low band spectrum yet.  You can toss in T-Mobile acquiring a nice chunk of 600MHz for a few billion and still have less debt than sprint.  

 

They are different companies with different purposes with different strategies and business plans.  

[Conan Kudo]

Great point on different modernization efforts.  I love the fact that Sprint basically forced T-Mobile's hand into upgrading rural areas and in many ways, T-Mobile has forced Sprint to refocus on deploying B41 in urban areas.

 

In terms of CAPEX, when we look at the two (not adjusting for subs, clearwire, etc) we see that both have invested roughly the same in their network.

 

Sprint 2010-2014

21,895

T-Mobile 2010-214

19,770

 

As far as future capital spending, both are expected to continue to invest heavily.

 

While sprint has already spent a lot of money, they are also much more leveraged (net debt/ebitda=468.5% vs. 311.3% for T-Mobile) .  While we can discuss the advantages/disadvantages to each business strategy, that's a different topic.  You mention that, for example, T-Mobile doesn't have low band spectrum yet.  You can toss in T-Mobile acquiring a nice chunk of 600MHz for a few billion and still have less debt than sprint.  

 

They are different companies with different purposes with different strategies and business plans.  

Another key point to keep in mind is that T-Mobile's CAPEX is not expected to go down within the next 18 months. If it stays flat (as they've been saying for the last couple quarters), then it is effectively a capex raise compared to the business plan that T-Mobile pitched back in 2012. And T-Mobile is gradually growing its 700MHz footprint in order to have an alternative to the increasingly dicey 600MHz auction. Sprint itself underwent a massive 10 year program (that is just now nearing completion) to make its ESMR spectrum usable for cellular services.

 

And T-Mobile is periodically selling bonds to refinance its debt and de-lever faster than it would organically. Of course, most people don't focus on this aspect of the bond raising. Sprint does this too (though much less often), and it is foolish not to do it, especially since both are not considered junk stock (meaning selling bonds isn't usually difficult).

 

As both companies grow (yes, I do mean grow; I want to see Sprint eat Verizon's lunch!), we'll see the financials improve as the cost is spread across more customers and absorbed by higher total revenues.

[bigsnake49]

Sprint still needs to put LTE on additional sites, since we know that LTE's coverage is less than CDMA's. While LTE 800 might help temporarily by masking that deficiency, they just need to add more sites for their 1900MHz LTE not to mention band 41 LTE. They have been avoiding them so far, but it just needs to be done.

[S4GRU]

Sprint still needs to put LTE on additional sites, since we know that LTE's coverage is less than CDMA's. While LTE 800 might help temporarily by masking that deficiency, they just need to add more sites for their 1900MHz LTE not to mention band 41 LTE. They have been avoiding them so far, but it just needs to be done.

As Sprint depends on B41 more and more, the gaps between B41 sites will become more and more important. It will happen. And if Marcelo watches the network as closely as he has said, these holes will start becoming more and more obvious.

[cletus]

As Sprint depends on B41 more and more, the gaps between B41 sites will become more and more important. It will happen. And if Marcelo watches the network as closely as he has said, these holes will start becoming more and more obvious.

Since I have a few B41 sites near me I plan to watch them via speedtests over the next few months to see if they can hold up to the onslaught of iPhone users. I am not sure how they will do seeing as they APPEAR to be just clearwire towers that I used to connect to for WiMax. My 50-60 down may be because I am one of the only ones ever on the towers.

[S4GRU]

Since I have a few B41 sites near me I plan to watch them via speedtests over the next few months to see if they can hold up to the onslaught of iPhone users. I am not sure how they will do seeing as they APPEAR to be just clearwire towers that I used to connect to for WiMax. My 50-60 down may be because I am one of the only ones ever on the towers.

Over time, the iPhone effect will have an impact on one carrier sites. However, one B41 20MHz carrier has approximately 3x the capacity of each B25 carrier. So in places where there is B25/B26/B41, that's a lot of capacity. About 25MHz downlink (equivalent) capacity per sector.

 

As Sprint adds additional B41 carriers, each additional carrier adds ~15MHz DL capacity. So it will go 25-->40-->55 per sector with each addition. That's a lot of capacity. When three B41 carriers are live at a site, that's 10x more capacity than a B25 5MHz carrier alone.

 

It will be fun to watch it all unfold and track it! But my biggest concern is the impact the new iPhone will have on non B41 sites. They are going to be destroyed. It is going to show how for Sprint, B41 will be necessary on nearly every site and densification is going to be required in urban/suburban areas.

 

Marcelo, break out the capex checkbook! This train ain't slowing down any time soon!

[bigsnake49]

As Sprint adds additional B41 carriers, each additional carrier adds ~15MHz DL capacity. So it will go 25-->40-->55 per sector with each addition. That's a lot of capacity. When three B41 carriers are live at a site, that's 10x more capacity than a B25 5MHz carrier alone.

 

Robert are they using 3:2 or 2:1 download to upload ratio?

[lilotimz]

Robert are they using 3:2 or 2:1 download to upload ratio?

6:3

 

Sent from my Nexus 5 using Tapatalk