Softbank - New Sprint - Discussion

[milan03]

Might be more devastating to sprint if the deal were rejected, especially with a payout to tmo. Att could afford such a fee, sprint not so much.

Jim, Sent from my Photon 4G using Tapatalk 2

I think that's the main reason why this proposal is taking too long. Masa is smart, probably working that T-Mobile management, proposing different and more favorable breakup fees. I'm guessing spectrum rather than cash.

[irwinshere]

I think that's the main reason why this proposal is taking too long. Masa is smart, probably working that T-Mobile management, proposing different and more favorable breakup fees. I'm guessing spectrum rather than cash.

I don't think either one should pay if the deal is denied. That is just extortion or a bribe. If softbank asks tmo to put a halt to expansion like att did, then you might have something. Otherwise I don't see it.

 

Jim, Sent from my Photon 4G using Tapatalk 2

[chamb]

Yeah, well that sounds great if this was in a totalitarian regime where an entity is getting overtaken without regulatory body. 

 

In this case, there is a high probability that the merger isn't happening, and T-Mobile USA has to protect itself, investors and subs. Plus Deutsche Telekom isnt desperate to sell US operations anymore. 

 

Good thing "you're not Softbank/Sprint"

Yep, if I were Softbank and "had the money" for the buyout, I would play hardball to the extreme. The guy with the money can call the shots. It would all be done on my terms or it would not be done.

[bigsnake49]

And how would that benefit T-Mobile USA? Especially if they commit to halt their deployment like they had to during AT&T merger. 

 

They can agree to merge, but the effect of not being approved by FCC and DoJ would be devastating for T-Mobile USA without a breakup agreement. There is no way that kind of deal is going to happen. 

They should never have agreed to halt their deployment for AT&T and they should not agree for Sprint. Actually I want them to behave the same way as before the merger is announced, including shots at Sprint. That will lessen the need for a breakup fee! Sprint needs T-Mobile's LTE network to be complete, not to be halted.

Edited May 8, 2014 by bigsnake49

[twospirits]

Might be more devastating to sprint if the deal were rejected, especially with a payout to tmo. Att could afford such a fee, sprint not so much.

 

Jim, Sent from my Photon 4G using Tapatalk 2

 

 

I think that's the main reason why this proposal is taking too long. Masa is smart, probably working that T-Mobile management, proposing different and more favorable breakup fees. I'm guessing spectrum rather than cash.

Who says that Sprint can't afford a break up fee. Replace Sprint with Softbank (as it should be) and I do see Masa willing to do a break up fee if needed. Shoot, he is going to get a swift $58 Billion alone from the Alibaba IPO. Not that he is going to use that for Sprint or a Sprint/T-Mobile merger deal/breakup fee, but the point is the man can if he wanted to. Like the article states, "his first priority, no matter what, is to settle the U.S. situation" before embarking on his 300 year plan of world domination. 

 

Hail Hydra

[irwinshere]

Who says that Sprint can't afford a break up fee. Replace Sprint with Softbank (as it should be) and I do see Masa willing to do a break up fee if needed. Shoot, he is going to get a swift $58 Billion alone from the Alibaba IPO. Not that he is going to use that for Sprint or a Sprint/T-Mobile merger deal/breakup fee, but the point is the man can if he wanted to. Like the article states, "his first priority, no matter what, is to settle the U.S. situation" before embarking on his 300 year plan of world domination.

 

Hail Hydra

But why would tmo be due a breakup fee? It is not like softbank reneged on a purchase agreement. If anything the regulators would be the ones to blame ... and sue ... Exactly what would tmo lose anyway?

 

Jim, Sent from my Photon 4G using Tapatalk 2

[marioc21]

But why would tmo be due a breakup fee? It is not like softbank reneged on a purchase agreement. If anything the regulators would be the ones to blame ... and sue ... Exactly what would tmo lose anyway?

 

Jim, Sent from my Photon 4G using Tapatalk 2

 

Most times the company being acquired wants to negotiate a breakup fee in case the deal falls through for whatever reason. One reasons Deutsch-Telekom agreed to sell to AT&T was the $3 billion breakup fee and billions in spectrum they would get if the deal fell apart. 

 

Masa Son saw how much AT&T gave up once that deal fell through and I doubt he wants to repeat that himself.  So he'll aim for as low a fee as possible.  

[twospirits]

Not saying they are due either. I'm just respondig to the point made of "Att could afford such a fee, sprint not so much"

 

TS

[WiWavelength]

Masa Son saw how much AT&T gave up once that deal fell through and I doubt he wants to repeat that himself.  So he'll aim for as low a fee as possible.  

 

As a potential Sprint-T-Mobile breakup fee, I would offer Legere a lifetime supply of pomade, five sport coats and pairs of distressed jeans from the Gap, and a personal meeting with Don Johnson of "Miami Vice" fame.  I think he would take it.

 

AJ

[marioc21]

As a potential Sprint-T-Mobile breakup fee, I would offer Legere a lifetime supply of pomade, five sport coats and pairs of distressed jeans from the Gap, and a personal meeting with Don Johnson of "Miami Vice" fame.  I think he would take it.

 

AJ

 

T shirts, don't forget T-shirts.

 

[WiWavelength]

T shirts, don't forget T-shirts.

 

Oh, I thought of the T-shirts.  But Legere likes to wear his own "magenta" ones.

 

AJ

[xdfgf]

http://www.fiercewireless.com/story/dishs-ergen-leaves-door-open-t-mobile-deal-if-sprintt-mobile-effort-fails/2014-05-08

 

 

 

Interestingly, Ergen also said that it would "make a lot of sense" for a company like AT&T or Verizon (NYSE: VZ) to purchase Dish.

 

That's a curious thing to say
 

[bigsnake49]

http://www.fiercewireless.com/story/dishs-ergen-leaves-door-open-t-mobile-deal-if-sprintt-mobile-effort-fails/2014-05-08

 

 

That's a curious thing to say

 

Well if AT&T is going after DirectTV, then Verizon can certainly go after Dish!

[milan03]

I don't think either one should pay if the deal is denied. That is just extortion or a bribe. If softbank asks tmo to put a halt to expansion like att did, then you might have something. Otherwise I don't see it.

 

Jim, Sent from my Photon 4G using Tapatalk 2

How is it extortion? Without Sprint, with only 70MHz of nationwide spectrum, T-Mobile has a much higher chance of getting a piece of that 30MHz allocated 600MHz slice during 2015 incentive auction.

 

With Sprint, their merged spectrum portfolio is almost 300MHz, which will basically ensure that NewCo has absolutely no shot at that allocation. They'd be bidding against Verizon and AT&T all day long.

 

So yes, a significant breakup fee is very important for T-Mobile if they ever want to stay competitive in Tier 1 market. It would probably be much smarter for Sprint to wait until after the auction, or possibly look into other spectrum holders.

[irwinshere]

How is it extortion? Without Sprint, with only 70MHz of nationwide spectrum, T-Mobile has a much higher chance of getting a piece of that 30MHz allocated 600MHz slice during 2015 incentive auction.

 

With Sprint, their merged spectrum portfolio is almost 300MHz, which will basically ensure that NewCo has absolutely no shot at that allocation. They'd be bidding against Verizon and AT&T all day long.

 

So yes, a significant breakup fee is very important for T-Mobile if they ever want to stay competitive in Tier 1 market. It would probably be much smarter for Sprint to wait until after the auction, or possibly look into other spectrum holders.

Valid points indeed. However, how would the breakup harm tmo? Wouldn't the breakup allow tmo to bid on the 600 after all? Unless, of course, if tmo missed the auction while in limbo.

 

Jim, Sent from my Photon 4G using Tapatalk 2

[Conan Kudo]

Valid points indeed. However, how would the breakup harm tmo? Wouldn't the breakup allow tmo to bid on the 600 after all? Unless, of course, if tmo missed the auction while in limbo.

 

Jim, Sent from my Photon 4G using Tapatalk 2

In the event a deal is announced, the FCC will rewrite all the rules for the incentive auction to make it a no-holds-barred auction. AT&T and Verizon will be able to gobble up all the 600MHz spectrum with the sheer amount of cash they have. Additionally, T-Mobile and Sprint are both likely to miss both auctions while in limbo. Potentially, T-Mobile could be harmed irreversibly in the market, too.

 

And during the period when a merger is announced and it closes/fails, both parties will be frozen in order to minimize integration headaches. 

[MacinJosh]

Has anyone ever considered the fact that this doesn't have to be a merger? It could be a sharing agreement. All this talk of a merger has been based on Son's T-Mobile comments when Dish was fighting for Sprint and Clear. Maybe what is going on is a massively Epic LTE network sharing agreement like EE in the UK. DT is half owner in that deal, so why can't they work on the same thing here in the US with SoftBank/Sprint?

 

 

Sent from Josh's iPhone 5S using Tapatalk 2

[dstar2002]

Great point. And could they bid together on 600 if they did that?

 

Sent from my HTC M8

[JThorson]

Has anyone ever considered the fact that this doesn't have to be a merger? It could be a sharing agreement. All this talk of a merger has been based on Son's T-Mobile comments when Dish was fighting for Sprint and Clear. Maybe what is going on is a massively Epic LTE network sharing agreement like EE in the UK. DT is half owner in that deal, so why can't they work on the same thing here in the US with SoftBank/Sprint?

 

 

Sent from Josh's iPhone 5S using Tapatalk 2

That is a very interesting thought. I have never thought of it this way. I think this would be better than any merger.

 

Great point. And could they bid together on 600 if they did that?

 

Sent from my HTC M8

I don't think they would be able to bid together but they would be able to bid because they are 2 separate companies. But maybe I'm wrong.

[bigsnake49]

In the event a deal is announced, the FCC will rewrite all the rules for the incentive auction to make it a no-holds-barred auction. AT&T and Verizon will be able to gobble up all the 600MHz spectrum with the sheer amount of cash they have. Additionally, T-Mobile and Sprint are both likely to miss both auctions while in limbo. Potentially, T-Mobile could be harmed irreversibly in the market, too.

 

And during the period when a merger is announced and it closes/fails, both parties will be frozen in order to minimize integration headaches. 

 

Sprint/T-Mobile could probably skip the AWS-3 auction but they are not skipping the 600MHz auction no way, no how! 

[Conan Kudo]

Has anyone ever considered the fact that this doesn't have to be a merger? It could be a sharing agreement. All this talk of a merger has been based on Son's T-Mobile comments when Dish was fighting for Sprint and Clear. Maybe what is going on is a massively Epic LTE network sharing agreement like EE in the UK. DT is half owner in that deal, so why can't they work on the same thing here in the US with SoftBank/Sprint?

 

 

Sent from Josh's iPhone 5S using Tapatalk 2

I've mentioned it multiple times. I immensely prefer a network sharing agreement where Sprint and T-Mobile share GSM/UMTS/LTE networks, maintaining a common platform while executing on developing broad coverage and high capacity networks using the broad portfolio of spectrum the two companies have.

 

In such a scenario, Sprint would still need to retire the CDMA network, as network sharing in CDMA is not feasible. It's somewhat possible, but it's so ugly, difficult, fragile, and not worth it. 3GPP networks have been designed from the beginning to support network sharing very easily, which is why ACS and GCI in Alaska transitioned to GSM/UMTS/LTE after merging their networks into a NetCo called AWN and now use the shared network.

 

Sprint/T-Mobile could probably skip the AWS-3 auction but they are not skipping the 600MHz auction no way, no how! 

 

Why should they skip AWS-3? AWS-3 offers T-Mobile the opportunity to get AWS LTE up and running in several markets where it can't now, such as Cincinnati. And the AWS ecosystem is much larger than the PCS one for LTE, making it much more cost effective for both companies.

[dkyeager]

I've mentioned it multiple times. I immensely prefer a network sharing agreement where Sprint and T-Mobile share GSM/UMTS/LTE networks, maintaining a common platform while executing on developing broad coverage and high capacity networks using the broad portfolio of spectrum the two companies have.

 

In such a scenario, Sprint would still need to retire the CDMA network, as network sharing in CDMA is not feasible. It's somewhat possible, but it's so ugly, difficult, fragile, and not worth it. 3GPP networks have been designed from the beginning to support network sharing very easily, which is why ACS and GCI in Alaska transitioned to GSM/UMTS/LTE after merging their networks into a NetCo called AWN and now use the shared network.

 

Why should they skip AWS-3? AWS-3 offers T-Mobile the opportunity to get AWS LTE up and running in several markets where it can't now, such as Cincinnati. And the AWS ecosystem is much larger than the PCS one for LTE, making it much more cost effective for both companies.

gsm and cdma are old school. Just go shared spectrum for LTE advanced.

 

sent by tapatalk from my LS-980 (G2)

[Conan Kudo]

gsm and cdma are old school. Just go shared spectrum for LTE advanced.

 

sent by tapatalk from my LS-980 (G2)

That is dumb on so many levels. For one, GSM/UMTS earn T-Mobile more than 70% of its revenue. Within that, UMTS earns T-Mobile greater than 65% of its revenue. GSM, while steadily earning less revenue, is still profitable to maintain due to domestic and multinational roaming and M2M services.

 

As UMTS is shifted from AWS to PCS, it can increasingly take over the role of GSM, allowing GSM to fade from the network. AT&T, ironically, is helping this by infusing a massive boost into the UMTS ecosystem by driving costs down to integrate UMTS into devices. It's now just as cheap as GSM to put into a device, in large part thanks to AT&T.

 

As for CDMA, the reason it's not worth maintaining is due to the increasing costs in the ecosystem. As operators steadily convert from CDMA to UMTS and cut off orders for CDMA-enabled devices, the cost of supplying those devices and network gear goes up. About a decade ago, a CDMA device would probably cost roughly the same as a UMTS one, because nearly all of the Americas maintained CDMA networks, as did several countries in Africa and Asia. This is definitely no longer the case. As a result, a CDMA device costs many times more than its UMTS counterpart. And more CDMA operators are disappearing every month. A few months ago, S-Fone in Vietnam declared bankruptcy and completely shut down. Bangladesh's CityCell is in the process of shutting down its CDMA network for GSM, pending approval to convert its mobile license to GSM/UMTS and turn on the replacement network. CityCell no longer offers CDMA roaming services, and has been preparing for two years for the switch. If its request isn't approved, CityCell will likely shut down. Bell and Telus in Canada are jointly shutting down CDMA across the country throughout the year. Movistar (owned by Telefónica) completed shutting down its last CDMA network in Venezuela about a month ago. Iusacell in Mexico has successfully migrated nearly all of its subscribers to UMTS and is repurposing CDMA spectrum for LTE service, in partnership with Nextel Mexico and Movistar. China Telecom, the biggest CDMA operator in the world, will likely fully switch back to GSM through a network sharing agreement being hashed out by all three Chinese mobile network operator companies to speed up LTE deployment. China Telecom already provides to its customers access to the China Unicom/China Mobile GSM network through its dual-mode CDMA/GSM devices that use GSM1X for the CDMA part.

 

Sprint's problems are compounded by the fact that no one outside the US use PCS for CDMA. And Sprint is the only one in the world using ESMR for CDMA. This makes CDMA device procurement exceptionally expensive, which is why Sprint has trouble with devices from time to time. KDDI elected to use it for LTE to avoid the cost issue, and Nextel Japan remains in limbo (though I expect it to have been fully shut down for the last few years, and they may not even have SMR licenses anymore).

 

We don't live in a vacuum, as much as many would like to think.

[Tajustin95]

I like everyone's thought on this merger. I don't know what is going to happen. Regulators are still skeptical about it. I do want this merger to go through. I think this will totally come down to how the other mergers will play out.

[Rawvega]

which is why Sprint has trouble with devices from time to time. 

 

Could you provide some specific examples of what you're referring to here?