Sprint Reportedly Bowing Out of T-Mobile Bid (was "Sprint offer" and "Iliad" threads)

[VW Maverick]

http://www.androidauthority.com/sprint-finalizes-40-billion-financing-t-mobile-merger-395462/

 

Mav.

 

Sent from my Sprint Tri-Band LG G2.

[Fraydog]

I'm starting to get a little antsy about the debt load TMUS brings to the table here...

[WiWavelength]

I'm starting to get a little antsy about the debt load TMUS brings to the table here...

 

Santa Claus has debt?  What?  No!

 

AJ

[JThorson]

I'm starting to get a little antsy about the debt load TMUS brings to the table here...

$40 Billion just blows my mind. That is a crazy amount, though Masa and Softbank should be able to handle it. 

[Fraydog]

Santa Claus has debt? What? No!

 

 

[bigsnake49]

$40B is the total amount to be financed. Not all of it is T-Mobile debt. Only $20B is T-Mobile debt that needs to be refinanced.

[WiWavelength]

$40B is the total amount to be financed. Not all of it is T-Mobile debt. Only $20B is T-Mobile debt that needs to be refinanced.

 

bigsnake49 has a fever...

 

 

AJ

[JimBob]

$40B is the total amount to be financed. Not all of it is T-Mobile debt. Only $20B is T-Mobile debt that needs to be refinanced.

What is the average interest rate on the T-Mobile debt compared to the rate that refinancing will receive?

[bigsnake49]

bigsnake49 has a fever...

 

 

AJ

 

No, network and spectrum sharing would cure it as well. But if they're going to do that why the heck did they wait so freaking long...

[bigsnake49]

What is the average interest rate on the T-Mobile debt compared to the rate that refinancing will receive?

Don't know...all I know is $40B is not the total value of the deal, since there will be stock involved. DT will end up owning around 20% of the NewCo.

[Josh]

First, I thought that t-mobile only had around 9Billion of debt, so why does it say that there is 20Billion of financing to cover t-mobile debt?  I am confused with that, but also I have heard that DT will own between 15-20% of the new combined company, so where is that factored in if there is 20+20B financed?  

 

Also, I know that they are looking at the fact that they will be roughly doubling in size and be able to save on redundant infrastructure/marketing/etc, but couldn't softbank just spend that money on completing the spark roll out and crush t-mobile? 

[JimBob]

Also, I know that they are looking at the fact that they will be roughly doubling in size and be able to save on redundant infrastructure/marketing/etc, but couldn't softbank just spend that money on completing the spark roll out and crush t-mobile? 

"Crush" T-Mobile and still end up losing to the much larger AT&T and Verizon?

 

The point of spending money is to eventually generate profits in the not-too-long-off-future.

[bigsnake49]

First, I thought that t-mobile only had around 9Billion of debt, so why does it say that there is 20Billion of financing to cover t-mobile debt?  I am confused with that, but also I have heard that DT will own between 15-20% of the new combined company, so where is that factored in if there is 20+20B financed?  

 

Also, I know that they are looking at the fact that they will be roughly doubling in size and be able to save on redundant infrastructure/marketing/etc, but couldn't softbank just spend that money on completing the spark roll out and crush t-mobile? 

$5.5 billion ending cash position

$14.6 billion net debt excluding towers

http://investor.t-mobile.com/Cache/1001186493.PDF?Y=&O=PDF&D=&fid=1001186493&T=&iid=4091145

 

where net debt = total debt - cash at hand

 

so total debt is $20.1B

Edited June 21, 2014 by bigsnake49

[bigsnake49]

First, I thought that t-mobile only had around 9Billion of debt, so why does it say that there is 20Billion of financing to cover t-mobile debt?  I am confused with that, but also I have heard that DT will own between 15-20% of the new combined company, so where is that factored in if there is 20+20B financed?  

 

Also, I know that they are looking at the fact that they will be roughly doubling in size and be able to save on redundant infrastructure/marketing/etc, but couldn't softbank just spend that money on completing the spark roll out and crush t-mobile? 

 

So let's say they do that and it only nets them, let's say, 5 million customers, then what?

Edited June 21, 2014 by bigsnake49

[Mr.Nuke]

First, I thought that t-mobile only had around 9Billion of debt, so why does it say that there is 20Billion of financing to cover t-mobile debt?

They have $19.945 billion in long-term debt on their balance sheet as of the fy 2013.

[Mr.Nuke]

What is the average interest rate on the T-Mobile debt compared to the rate that refinancing will receive?

6.32% is T-Mobile's current weighted average cost of long-term debt. With softbank's current credit rating I'm guessing it will  average to around 5% for the refinancing (they would probably be downgraded again if a deal goes through though). At $20 billion that is about $264,000,000 in savings. If Sprint is refinancing the deal it will cost more.

[kct1975]

Thought you might want to see this...

 

http://www.usatoday.com/story/tech/2014/06/19/sprint-ceo-talks-about-potential-t-mobile-merger/10814633/

 

Sent from my RCT6378W2

[dnicekid]

I think Dish wants to be more than just a mobile operator. They want to be able to offer fixed and mobile broadband to their subscribers. Plus if they are patient they could probably pick up more spectrum and a lot of T-Mobiles's network for a discount after T-Mobile is integrated into Sprint. Now will that get done before 2017 which is their deadline? I don't know!

Dish might be sitting in its best position right now.. they almost can't lose! Either way they get in cheap!

[Rawvega]

Thought you might want to see this...http://www.usatoday.com/story/tech/2014/06/19/sprint-ceo-talks-about-potential-t-mobile-merger/10814633/

Sent from my RCT6378W2

And of course the first analyst they quote is Muppet. 'Three-player markets don't tend to have lower prices than four-player markets'. How insightful..Going by that logic,a five-player market would have even lower prices. Yet,I don't recall all of this angst about VZW and AT&T divvying up Alltel which is the transaction that people really should've been protesting. However, since their CEO wasn't a pandering 50-something year old still trying to dress like a hipster and tossing four letter words around constantly for attention, I guess most people couldn't be bothered enough to care about that. /shrug

[Fraydog]

Don't forget Entner is a piece of work too. This was the same guy who said both smaller competitors would get ground to shreds by the duopoly, now he think's T-Mobile is bulletproof! I'm glad someone shined a light on Sprint's efforts on corporate responsibility, that's been something that Hesse frankly hasn't got enough credit for (besides saving Sprint from going bankrupt after the Gary Forsee disaster). Would Legere have the same commitment? That's a very valid question. It's one he needs to answer if he is to ever take the leadership of Sprint.

[Rawvega]

Don't forget Entner is a piece of work too.

Thank you. I actually had meant to give Ole Roger a shout out in my post but got distracted. I shudder every time one of his columns appears on Fierce because I know it's going to be absolute tripe.

 

Sent from my SM-N900P using Tapatalk

[Josh]

So let's say they do that and it only nets them, let's say, 5 million customers, then what?

 

5 Million new customers would help a lot and it depends on how quickly they add them... I think it would be better than loosing customers every quarter, but I get your point. Would it be worth the extra money?

 

I'm saying that it would cost less than 40B to complete NV in all of its current phases and add towers to expand sprint's current footprint to match/overbuild what it would gain with the addition of t-mobile.  This would make the network just as fast (and eventually faster) in the urban areas where t-mobile currently has their LTE/HSPA+ coverage using the 2600Mhz band, and they would have a decent speed network outside of the major metros using their 800/1900Mhz spectrum.  They would then gain capacity in the rural areas with the 600Mhz spectrum auctions (which they will presumably have money to spend on without spending 40B now) and start to match VZW/At&t at least in areas that they serve (maybe not areas like montana, lol).  

 

Now, this might not bring one extra customer in because people have a perception of sprint, and right now it's still lacking any stand out quality for the brand.  Verizon has the coverage in the US and speed is fastest, At&t is the 2nd largest coverage & speed and gets exclusive phones, T-Mobile is the underdog that's smaller but is blazing fast where covered and is cheap, Sprint has slightly larger 3G footprint than t-mobile and has unlimited data... but is constantly kicked for not having as much coverage/reliability as the big 2 or speed as t-mobile... 

 

No matter what happens, sprint will need to have a successful advertising campaign (no 'framily') and show that it is just as capable as the other players... Maybe once the 100 city TDD-LTE built out is complete, do a blind speed test with people trying to guess what carrier it is, then show that it is sprint and is cheaper than VZW and At&t.  

 

I think that they could add customers again if they have a good product that is well positioned and priced. Don't forget like always in a merger, they also will probably loose some customers that don't want to switch to the new company or if they are required to purchase a new phone.  The other companies will also offer switching incentives (much like what t-mobile has done).  I am not saying that the combined company will be substantially smaller than the addition of both subscriber bases, just that it is not always a 2+2=4 scenario.  

 

I'm sure they have someone doing a cost analysis, and it is cheaper to buy t-mobile with its customers and spectrum, than to build out to gain the customers and purchase new spectrum... but if it gets shot down by the government, then sprint/softbank has 2B less to spend on upgrades and t-mobile/DT has 2B more.  

[Paynefanbro]

No matter what happens, sprint will need to have a successful advertising campaign (no 'framily') and show that it is just as capable as the other players... Maybe once the 100 city TDD-LTE built out is complete, do a blind speed test with people trying to guess what carrier it is, then show that it is sprint and is cheaper than VZW and At&t.  

 

 

I like the blind speed test idea. I figure, Sprint should rig it a bit and show it in areas, or cities that have better LTE/Spark coverage in general such as NYC, Chicago etc. And then Sprint could show an LTE map with their roaming partners to show how their coverage is just as great as AT&T and Verizon, and finally show them that with Framily they'll be paying for great coverage at a great price.

[WiWavelength]

I like the blind speed test idea. I figure, Sprint should rig it a bit and show it in areas, or cities that have better LTE/Spark coverage in general such as NYC, Chicago etc. And then Sprint could show an LTE map with their roaming partners to show how their coverage is just as great as AT&T and Verizon, and finally show them that with Framily they'll be paying for great coverage at a great price.

 

After that needlessly lengthy quote, your gentleman and scholar titles have been revoked.

 

AJ

[Paynefanbro]

After that needlessly lengthy quote, your gentleman and scholar titles have been revoked.

 

AJ

 

Fixed again!