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Verizon, Vodafone Agree to $130 Billion Deal, WSJ Reports


Rawvega

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Correlation does not necessarily equal causation.  But look at what VZ and SBC were able to ram through 2000-2008.  As a society, are we better off?

 

AJ

I'm sorry I'm not understanding, ram through what? Regulatory agencies? Consumers? Harry's Tic Tac emporium?

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I'm sorry I'm not understanding, ram through what? Regulatory agencies? Consumers? Harry's Tic Tac emporium?

He's referring to the whole AT&T + Cingular deal, where AT&T was bought out, split up, only to rebrand, remerge, and come back to basically the same exact company, only with spectrum assets in some markets rivaling none. 

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Sprint had its chances to improve it's coverage map by merging with Alltel and possibly USCC and some others. They could have also bought 1900Mhz spectrum from the bankrupt Nextwave to shore up some of their weak spectrum spots. They would not have had sub 1GHz spectrum in the major urban centers or a lot of 2.6GHz spectrum or the PCS G block, but they could have bid in the AWS auction or the 700MHz auction. 

 

Verizon won't have the money to expand their network as much, but they will still be a formidable competitor.

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I'm sure many of us (myself included) wished that Sprint had merged with Alltel. But that ship has sailed, and eventually Sprint will have to figure out what to do once EvDO roaming agreements with Alltel (in ex-Alltel coverage areas) fall through.

 

Also, remember that Nextel was the owner of a fair chunk of BRS spectrum back pre-merger (AJ, correct me if I'm wrong on this). That's what they used to conduct Flarion's Flash-OFDM trials in the Research Triangle. I remember reading in PC Mag circa 2005 about those trials...they were hitting speeds comparable to HSPA 3.6 when AT&T was just deploying UMTS in a few markets...and both Verizon and Sprint were still on EvDO rev 0.

 

http://www.pcmag.com/article2/0,2817,1770838,00.asp

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The Bells only succeeded in part because of the regulatory advantages they had. They still had to build out in a lot of places. Not all of it was bought. The other factor was Sprint's extreme incompetence through the Nextel debacle and T-Mobile's passiveness in upgrading their own networks. It wasn't the duopoly alone.

 

I'm sure if there were any pro-business people on here, they'd point at Sprint and T-Mo US dropping the ball. I think the current leadership at both companies is better but they're still behind.

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The Bells only succeeded in part because of the regulatory advantages they had. They still had to build out in a lot of places. Not all of it was bought. The other factor was Sprint's extreme incompetence through the Nextel debacle and T-Mobile's passiveness in upgrading their own networks. It wasn't the duopoly alone.

 

I'm sure if there were any pro-business people on here, they'd point at Sprint and T-Mo US dropping the ball. I think the current leadership at both companies is better but they're still behind.

 

He lives!  He lives!!!   :kisswink:

 

Robert

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He lives!  He lives!!!   :kisswink:

 

Robert

 

I apologize for taking a long break. I was really burnt out. 

 

It ended up being a long summer break for me to work on my golf game and lower my handicap. I was off all social media (even Twitter) for a long time. 

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I'm sure many of us (myself included) wished that Sprint had merged with Alltel. But that ship has sailed, and eventually Sprint will have to figure out what to do once EvDO roaming agreements with Alltel (in ex-Alltel coverage areas) fall through.

 

Also, remember that Nextel was the owner of a fair chunk of BRS spectrum back pre-merger (AJ, correct me if I'm wrong on this). That's what they used to conduct Flarion's Flash-OFDM trials in the Research Triangle. I remember reading in PC Mag circa 2005 about those trials...they were hitting speeds comparable to HSPA 3.6 when AT&T was just deploying UMTS in a few markets...and both Verizon and Sprint were still on EvDO rev 0.

 

http://www.pcmag.com/article2/0,2817,1770838,00.asp

Yes, they (Nextel) bought MCI's BRS holdings.

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He lives!  He lives!!!   :kisswink:

I apologize for taking a long break. I was really burnt out. 

 

It ended up being a long summer break for me to work on my golf game and lower my handicap. I was off all social media (even Twitter) for a long time. 

 

Fraydog traveled many months, miles, and golf holes to come back to us.  It is like the plot of "The Incredible Journey."

 

:P

 

AJ

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http://www.telecomramblings.com/2013/09/verizon-pays-up-vodafone-will-distribute-84b-to-shareholders/

 

 

 

If you were unplugged for the Labor Day weekend in the USA, then this will be news. Otherwise, it’s just the wrap-up with the actual numbers.  The deal has been made: Verizon is paying Vodafone $130B to take full control over Verizon Wireless.

Vodafone will be getting $58.9B in cash, Verizon common stock currently valued at $60.2B plus $5B more in notes payable, the 23.1% stake in Vodafone’s Italian subsidiary that Verizon held at a valuation of $3.5B, and $2.5B of other unnamed financial considerations. Yep, in this gargantuan M&A event, that last $2.5B is enough of a rounding error that it doesn’t need to be specified in detail.

Verizon has arranged $61.0B in bridge financing with JP Morgan, which it will replace with permanent financing arrangements later. However, if they manage to raise more, Verizon does have the right to swap $15B of cash for stock it would have otherwise issued.

Quickly defusing the possibility they might go shopping with the whole proceeds, Vodafone says it will return $84B of the treasure hoarde to shareholders. The biggest piece of that will be all of the Verizon shares, which will go directly to Vodafone shareholders along with $23.9B.

Of the remaining cash, Vodafone is putting £6 toward additional organic investments. That means accelerated 4G rollout in 5 European markets, deeper 3G coverage overall, UC and an extended fiber roleout, and various portfolio additions. And much of the rest will go toward debt reduction it seems.

Of course that doesn’t mean there won’t be funding available for M&A by Vodafone, it’s just that it won’t be of the magnitude it could have been. On the other hand, the idea that AT&T might swoop in and buy the rest of Vodafone doesn’t seem all that unlikely.

As big as the deal is, it won’t take long to close. They’re targeting Q1 of 2014 for that.

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I hope the pre-paid market starts some competition in the US/Canada.

 

The prices in Europe are crazy low when compared with here.

 

Also all carriers will match prices in a round about way, if one adds a 'network maintenance' fee, the others will.

They do dishonest things like that now. CenturyLink just started adding more fees like this a few months ago.

 

They also don't subsidize devices in Europe like they do here.

 

Verizon buying out Vodafone has been rumored for awhile now. It will be interesting to see if Vodafone ok's the deal.

 

I think a while is an understatement. It's been going on for many years.

 

Sprint's network plans are a threat to Verizon.  Especially as their LTE speeds start to take a crap on 750MHz.  I love shoving my 2.5Mbps Sprint 3G speedtests in the face of my Verizon friends when their LTE speeds drop to 1-2Mbps at night around here.   ;)

 

Robert

 

How about my 50 kilobit 3G speedtests? :-p

 

I'm going with daisy-chained microwave backhaul on those towers. Which doesn't actually impact speeds that much, or latency. That's how VZW is serving up LTE south of San Angelo, TX, and I'm sure they're using it in other areas.

 

Does capacity take a hit this way? Sure. But when fiber to these sites is nonexistent you gotta do what you gotta do.

 

My guess is that one immediate ramification of this deal is that FiOS builds will pretty much stop, even more so than they already are doing. Now that Verizon can take 100% of profits generated by VZW, they'll try to sink all of their money there.

 

They'll also have a bit more incentive to invest in their network. So AWS might come online sooner in some areas. Which would be nice in places where LTE 750 site density (which is increasing in urban areas, even after the initial build-out) just isn't enough.

 

All carriers are using microwave in many spots in their networks. It just makes sense.

 

How does capacity take a hit?

 

For most of the life of VZW, there were no dividends paid. Vodafone wanted those dividends pretty badly. Only recently did they start dispensing.

 

Apparently Sprint also daisy-chains microwave-fed sites along some highways. Although to Sprint's credit, I'm certain that after NV is complete, a much greater proportion of their sites will be fiber-fed than VZW's.

 

 

Unfortunately that ship sailed long ago. Verizon is currently only building out FiOS in places like NYC where they signed franchise agreements several years ago. The only thing that might change now is that Verizon will more aggressively try to wriggle out of the minimum service terms of those agreements. They will also continue to refuse to repair DSL lines (e.g. those damaged by Hurricane Sandy), leaving residents in the Northeast with a poor choice between cable or their high-profit and low-capped LTE service.

 

The sad reality is that most (although not all) private companies, particularly the large ones that serve the most people, are only interested in squeezing what they can out of their existing infrastructure, instead spending that money on lobbying state governments to pass laws preventing locales from doing much about it. IMO muni fiber can't come quickly enough.

 

 

Very true. Although AT&T's lately been giving them a run for their money, juggling 3 acquisitions - Alltel (ATN), Leap, and Long Lines - at once.

 

Everyone uses microwave.

 

Sprint had its chances to improve it's coverage map by merging with Alltel and possibly USCC and some others. They could have also bought 1900Mhz spectrum from the bankrupt Nextwave to shore up some of their weak spectrum spots. They would not have had sub 1GHz spectrum in the major urban centers or a lot of 2.6GHz spectrum or the PCS G block, but they could have bid in the AWS auction or the 700MHz auction. 

 

Verizon won't have the money to expand their network as much, but they will still be a formidable competitor.

 

Sprint and T-Mo have repeatedly dropped the ball. You reap what you sow.

 

I have no reason to think that Verizon won't explode the use of their other spectrum holdings if the competition heats up too much. AT&T already is. I'd like to point out that $2.5B of the purchase was miscellaneous. $2.5B was miscellaneous. $2.5B goes a long way in adding a band to towers and on the sale it was just marked as miscellaneous.

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They also don't subsidize devices in Europe like they do here.

 

 

I think a while is an understatement. It's been going on for many years.

 

 

How about my 50 kilobit 3G speedtests? :-p

 

 

All carriers are using microwave in many spots in their networks. It just makes sense.

 

How does capacity take a hit?

 

For most of the life of VZW, there were no dividends paid. Vodafone wanted those dividends pretty badly. Only recently did they start dispensing.

 

 

Everyone uses microwave.

 

 

Sprint and T-Mo have repeatedly dropped the ball. You reap what you sow.

 

I have no reason to think that Verizon won't explode the use of their other spectrum holdings if the competition heats up too much. AT&T already is. I'd like to point out that $2.5B of the purchase was miscellaneous. $2.5B was miscellaneous. $2.5B goes a long way in adding a band to towers and on the sale it was just marked as miscellaneous.

 

Which purchase are you talking about?

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The $2.5B is going to get paid to Vodafone, not the other way around.

 

I know. You missed my point. If $2.5B is petty enough to be miscellaneous, surely Verizon Wireless can afford to roll out whatever band they so choose wherever they so choose to roll it out.

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I know. You missed my point. If $2.5B is petty enough to be miscellaneous, surely Verizon Wireless can afford to roll out whatever band they so choose wherever they so choose to roll it out.

 

Oh, they'll have plenty of money, even with the interest payments.

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