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


thepowerofdonuts

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That will depend, in part, upon the finalized rules for the 600 MHz auction and the amount of spectrum that is made available.  If Sprint and T-Mobile bid against one another as separate entities, they will end up paying more aggregate than they would as a single Sprint-T-Mobile.  Think of it as two fiancés bidding against each other at an auction.  That additional cost must be factored into the equation.

 

AJ

Indeed, but they could also totally keep that bidding war under control, behind the closed doors  :)

They'd be bidding against much smaller entities for that 30Mhz slice, of course if that 30MHz allocation is to actually happen. 

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Indeed, but they could also totally keep that bidding war under control, behind the closed doors  :)

They'd be bidding against much smaller entities for that 30Mhz slice, of course if that 30MHz allocation is to actually happen. 

 

Is that legal to deal behind close doors and split the 30Mhz slice?

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Is that legal to deal behind close doors and split the 30Mhz slice?

No. FCC auctions prohibit collusion.

 

AJ

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Is that legal to deal behind close doors and split the 30Mhz slice?

It's as legal as delaying this whole merger for the purpose of banking during the auction lol.

 

Do corporations lie all the time for the purpose of achieving their goals at all cost? Absolutely.

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That will depend, in part, upon the finalized rules for the 600 MHz auction and the amount of spectrum that is made available.  If Sprint and T-Mobile bid against one another as separate entities, they will end up paying more aggregate than they would as a single Sprint-T-Mobile.  Think of it as two fiancés bidding against each other at an auction.  That additional cost must be factored into the equation.

 

AJ

Yes, but in the event they announce a merger, Tom Wheeler has already committed to rewriting all the rules to take away Sprint and T-Mobile's advantages at auction. Not to mention, the unjust enrichment rules for 600MHz will apply to M&A, which will be a further turn-off to merging after auction completed.

 

It's a really bad idea to merge if 600MHz rules are going to be in their favor.

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To put some Qualcomm initiatives into perspective, Qualcomm also proposed GSM1x so that GSM operators could both keep their preferred GSM MAP (i.e. backend network) and switch to a notably superior CDMA1X airlink.  It went nowhere.  In short, GSM1x could have existed but never did.

 

AJ

 

 

Only because no operator signed up for it. In this case, Sprint/T-Mobile will be big enough to do it. But like I said, VoLTE is close at hand, so I am not sure they will gain much by it.

Actually, one did implement GSM1X. China Unicom did and when it transferred those CDMA assets to China Telecom, China Telecom continued to use it. Historically, all three Chinese operators used GSM. It was later that WCDMA and CDMA2000 and TD-SCDMA were deployed. The only reason CDMA2000 was deployed there was because of GSM1X. That's also why SIM cards are required to connect to China Telecom's CDMA network. It uses GSM authentication. And also, China Telecom customers typically have dual-mode CDMA/GSM devices, so that they can access the China Mobile/Unicom GSM network, too.

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Actually, one did implement GSM1X. China Unicom did and when it transferred those CDMA assets to China Telecom, China Telecom continued to use it. Historically, all three Chinese operators used GSM. It was later that WCDMA and CDMA2000 and TD-SCDMA were deployed. The only reason CDMA2000 was deployed there was because of GSM1X. That's also why SIM cards are required to connect to China Telecom's CDMA network. It uses GSM authentication. And also, China Telecom customers typically have dual-mode CDMA/GSM devices, so that they can access the China Mobile/Unicom GSM network, too.

 

Thanks for the info. 

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Wasn't the breakup with att like 3 billion? I forget

 

 

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It was something like $ 3 billion in cash and $3 billion worth of spectrum. So about $6 billion in total.

 

Sent from my LG-LS980 using Tapatalk

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See my post here: http://s4gru.com/index.php?/topic/4191-softbank-new-sprint-discussion/?p=316863

 

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?

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I really am starting to think they are planning a joint venture similar to EE in the UK. Maybe just between Sprint & T-Mobile, or maybe Dish is in on it too. But whatever is being planned is going to show up soon enough.

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http://m.us.wsj.com/articles/SB10001424052702304655304579552301170337002?mg=reno64-wsj

 

Apparently Tmobile wants a break up fee of 1 billion plus

 

There's more to it than that; T-Mobile US wants to run the merged carrier and (surprisingly, to me at least) retain the T-Mobile brand even though Deutsche Telekom won't be part of the new company. I suspect that portends to trying to shift everyone over to UMTS/W-CDMA + LTE before VoLTE is fully baked, which would be a churn disaster.

 

http://www.phonescoop.com/articles/article.php?a=14052

 

I read these moves as a poison pill in the negotiations. I don't think Son wants to license the T-Mobile brand name (remember, he rebranded Vodafone Japan to stop paying licensing fees to Vodafone, and Sprint is planning to ditch the licensed Virgin brand too).

 

Frankly I think a network hosting or network sharing arrangement like EE or Telus/Bell on the companies' combined 600 winnings, along with (as I've said before) buying out the CCA carriers before the duopoly does, is a far better path forward for Softbank and leaves Legere and Telekom to deal with the consequences of their loss-leading customer acquisition strategy on Softbank's terms rather than the bailout coming out of Son's wallet and ultimately both companies' customers' wallets.

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There's more to it than that; T-Mobile US wants to run the merged carrier and (surprisingly, to me at least) retain the T-Mobile brand even though Deutsche Telekom won't be part of the new company. I suspect that portends to trying to shift everyone over to UMTS/W-CDMA + LTE before VoLTE is fully baked, which would be a churn disaster.

 

http://www.phonescoop.com/articles/article.php?a=14052

 

I read these moves as a poison pill in the negotiations. I don't think Son wants to license the T-Mobile brand name (remember, he rebranded Vodafone Japan to stop paying licensing fees to Vodafone, and Sprint is planning to ditch the licensed Virgin brand too).

 

Frankly I think a network hosting or network sharing arrangement like EE or Telus/Bell on the companies' combined 600 winnings, along with (as I've said before) buying out the CCA carriers before the duopoly does, is a far better path forward for Softbank and leaves Legere and Telekom to deal with the consequences of their loss-leading customer acquisition strategy on Softbank's terms rather than the bailout coming out of Son's wallet and ultimately both companies' customers' wallets.

A switch to UMTS wouldn't be a disaster for Sprint or its subscribers. >60% of currently sold phones support UMTS on PCS, and the overwhelming majority of phones sold by Sprint are UMTS capable. This is not an issue for Sprint. In fact, the opposite. Most likely, there'd be a massive capacity gain

 

I suspect that the T-Mobile branding may be an issue, though. I doubt Masa would like to kill the Sprint brand so quickly, but he may believe the brand is too tarnished to keep. However, you're wrong about why Masa switched the Vodafone brand to SoftBank. He switched it not because of licensing fees, but because the Vodafone brand itself was bad in Japan. Japan is insular and xenophobic by nature, and when J-PHONE rebranded to Vodafone in 2004, the attractiveness of the mobile network operator to Japanese consumers dropped like a rock because Vodafone is a "foreign brand" that sold phones that "weren't Japanese enough". When SoftBank rebranded Vodafone to SoftBank Mobile for mobile, and fixed assets to Yahoo! Japan, prospects immediately began improving. It wouldn't be until 2010 with the iPhone 4 (the first iPhone that supported docomo's UMTS band 6 that SoftBank used for roaming at the time) that Japanese consumers began reconsidering foreign brands and foreign-designed devices.

 

In any case, I think a network+spectrum sharing agreement to share GSM/UMTS/LTE networks would be much more palatable than a full-on merger. And indeed, it would preserve the four-player market, while providing both with the effective scale in the market they need. The independent company that manages the network would have access to BUYIN, the Deutsche Telekom+Orange S.A. global handset and network gear procurement joint venture that offers highly discounted GSM/UMTS/LTE hardware to DT/Orange companies. This would naturally extend to Sprint indirectly, since T-Mobile US currently participates in BUYIN.

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A switch to UMTS wouldn't be a disaster for Sprint or its subscribers. >60% of currently sold phones support UMTS on PCS, and the overwhelming majority of phones sold by Sprint are UMTS capable. This is not an issue for Sprint. In fact, the opposite. Most likely, there'd be a massive capacity gain.

 

My understanding is that while most recent Sprint smartphones can technically do GSM and UMTS on PCS bands, almost all (except the Nexus 5) have firmware or even hardware locks that don't allow UMTS/GSM access on US networks (e.g. any MCC starting with 31). Unless Sprint was forward-thinking enough to exclude 310-120 or another US MCC-MNC under their control like Nextel's (which would presumably mean that T-Mobile could broadcast the Sprint/Nextel MCC-MNC in addition to their own), there's no way to get those devices to authenticate on a US network. I suppose Sprint could go to the manufacturers and get them to update firmware to remove the lockouts, but we're talking about dozens of different devices, many of which are no longer supported by their manufacturers. You're also going to have to enable the WCDMA modes other than "Global," which are hidden from the menus on most Sprint devices, and talk customers through switching settings. And even after that you're probably looking at SIM swaps, with customers who have no clue what a SIM is, because it came preinstalled in the phone and they've never changed it.

 

And that doesn't account for the millions of dumb phones, m2m devices, mobile broadband devices, Phone Connects, and the like out there too, a lot of which don't even have any non-CDMA capabilities to speak of. And the older LTE devices that have embedded SIMs who won't be able to transition. Those people will churn - look at what happened with Nextel.

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My understanding is that while most recent Sprint smartphones can technically do GSM and UMTS on PCS bands, almost all (except the Nexus 5) have firmware or even hardware locks that don't allow UMTS/GSM access on US networks (e.g. any MCC starting with 31). Unless Sprint was forward-thinking enough to exclude 310-120 or another US MCC-MNC under their control like Nextel's (which would presumably mean that T-Mobile could broadcast the Sprint/Nextel MCC-MNC in addition to their own), there's no way to get those devices to authenticate on a US network. I suppose Sprint could go to the manufacturers and get them to update firmware to remove the lockouts, but we're talking about dozens of different devices, many of which are no longer supported by their manufacturers. You're also going to have to enable the WCDMA modes other than "Global," which are hidden from the menus on most Sprint devices, and talk customers through switching settings. And even after that you're probably looking at SIM swaps, with customers who have no clue what a SIM is, because it came preinstalled in the phone and they've never changed it.

 

And that doesn't account for the millions of dumb phones, m2m devices, mobile broadband devices, Phone Connects, and the like out there too, a lot of which don't even have any non-CDMA capabilities to speak of. And the older LTE devices that have embedded SIMs who won't be able to transition. Those people will churn - look at what happened with Nextel.

That's is an accurate take if the merger happened tomorrow, but by the time the merger is announced (if it ever happens) it will be quite a bit of time before it may be approved (if it is approved) and them an acceptable transition period before the network differences would even become an issue. . In theory by that time a lot of incompatible devices would be upgraded to more capable devices.

 

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My understanding is that while most recent Sprint smartphones can technically do GSM and UMTS on PCS bands, almost all (except the Nexus 5) have firmware or even hardware locks that don't allow UMTS/GSM access on US networks (e.g. any MCC starting with 31). Unless Sprint was forward-thinking enough to exclude 310-120 or another US MCC-MNC under their control like Nextel's (which would presumably mean that T-Mobile could broadcast the Sprint/Nextel MCC-MNC in addition to their own), there's no way to get those devices to authenticate on a US network. I suppose Sprint could go to the manufacturers and get them to update firmware to remove the lockouts, but we're talking about dozens of different devices, many of which are no longer supported by their manufacturers. You're also going to have to enable the WCDMA modes other than "Global," which are hidden from the menus on most Sprint devices, and talk customers through switching settings. And even after that you're probably looking at SIM swaps, with customers who have no clue what a SIM is, because it came preinstalled in the phone and they've never changed it.

 

And that doesn't account for the millions of dumb phones, m2m devices, mobile broadband devices, Phone Connects, and the like out there too, a lot of which don't even have any non-CDMA capabilities to speak of. And the older LTE devices that have embedded SIMs who won't be able to transition. Those people will churn - look at what happened with Nextel.

 

That's why you give them discounts to upgrade to the newest devices or you release new firmware. As far as m2m you leave a skeleton CDMA network up until 2018 or 2020. T-mobile has been doing really well converting Metro customers to GSM/UMTS/LTE.

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A switch to UMTS wouldn't be a disaster for Sprint or its subscribers. >60% of currently sold phones support UMTS on PCS, and the overwhelming majority of phones sold by Sprint are UMTS capable. This is not an issue for Sprint. In fact, the opposite. Most likely, there'd be a massive capacity gain.

 

In any case, I think a network+spectrum sharing agreement to share GSM/UMTS/LTE networks would be much more palatable than a full-on merger. And indeed, it would preserve the four-player market, while providing both with the effective scale in the market they need. The independent company that manages the network would have access to BUYIN, the Deutsche Telekom+Orange S.A. global handset and network gear procurement joint venture that offers highly discounted GSM/UMTS/LTE hardware to DT/Orange companies. This would naturally extend to Sprint indirectly, since T-Mobile US currently participates in BUYIN.

 

I was a long time supporter of the network sharing idea, mainly to share the LTE buildout costs, but I think that Masa wants to buy rather than share.  I think that DT still wants to sell. Legere was/is in favor of consolidation.

Edited by bigsnake49
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My understanding is that while most recent Sprint smartphones can technically do GSM and UMTS on PCS bands, almost all (except the Nexus 5) have firmware or even hardware locks that don't allow UMTS/GSM access on US networks (e.g. any MCC starting with 31). Unless Sprint was forward-thinking enough to exclude 310-120 or another US MCC-MNC under their control like Nextel's (which would presumably mean that T-Mobile could broadcast the Sprint/Nextel MCC-MNC in addition to their own), there's no way to get those devices to authenticate on a US network. I suppose Sprint could go to the manufacturers and get them to update firmware to remove the lockouts, but we're talking about dozens of different devices, many of which are no longer supported by their manufacturers. You're also going to have to enable the WCDMA modes other than "Global," which are hidden from the menus on most Sprint devices, and talk customers through switching settings. And even after that you're probably looking at SIM swaps, with customers who have no clue what a SIM is, because it came preinstalled in the phone and they've never changed it.

 

And that doesn't account for the millions of dumb phones, m2m devices, mobile broadband devices, Phone Connects, and the like out there too, a lot of which don't even have any non-CDMA capabilities to speak of. And the older LTE devices that have embedded SIMs who won't be able to transition. Those people will churn - look at what happened with Nextel.

I doubt that the PLMN ID of 310-120 is blocked, because most modems treat GSM/UMTS/LTE as one big thing (3GPP authentication). While Sprint has disabled 3GPP authentication in US carriers, by its very nature, it had to allow its own. With something like MOCN, that won't be a problem.

 

I was a long time supporter of the network sharing idea, mainly to share the LTE buildout costs, but I think that Masa wants to buy rather than share.  I think that DT still wants to sell. Legere was/is in favor of consolidation.

I seriously doubt DT wants to sell, since it would make very little sense. Post internal reorganization, this is the contribution to DT's revenues. EE (UK JV with Orange, S.A.) is under "Group Headquarters & Group Services", not "Europe".

011-2.png

Note that DT made a profit this quarter. While TMUS had an operating loss of ~$100m this quarter, the losses are temporary, since they are largely attributed to the huge influx of EIP usage and waiting for value to come in from traded-in devices being resold. Despite that, DT's revenue went up 8% because of the US unit, and profit increased as well.

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I doubt that the PLMN ID of 310-120 is blocked, because most modems treat GSM/UMTS/LTE as one big thing (3GPP authentication). While Sprint has disabled 3GPP authentication in US carriers, by its very nature, it had to allow its own. With something like MOCN, that won't be a problem.

 

I seriously doubt DT wants to sell, since it would make very little sense. Post internal reorganization, this is the contribution to DT's revenues. EE (UK JV with Orange, S.A.) is under "Group Headquarters & Group Services", not "Europe".

011-2.png

Note that DT made a profit this quarter. While TMUS had an operating loss of ~$100m this quarter, the losses are temporary, since they are largely attributed to the huge influx of EIP usage and waiting for value to come in from traded-in devices being resold. Despite that, DT's revenue went up 8% because of the US unit, and profit increased as well.

 

The subscriber gains are/will be temporary. Once Sprint has its network in order then it will have a response which help it gain back subscribers. It is pretty much a zero sum game, except for tablets and M2M. I don't count M2M because of the negligible revenue.

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The subscriber gains are/will be temporary. Once Sprint has its network in order then it will have a response which help it gain back subscribers. It is pretty much a zero sum game, except for tablets and M2M. I don't count M2M because of the negligible revenue.

M2M revenue is also pretty high margin (~90% or greater). And subscribership isn't a zero-sum game, which is why you can have >100% penetration in the market.

 

You sound so confident that the gains are temporary. But the data collected by most analyst groups seems to contradict that. In fact, they believe the subscribers are stickier with T-Mobile than they were with their previous mobile network operators. So I will have to disagree.

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M2M revenue is also pretty high margin (~90% or greater). And subscribership isn't a zero-sum game, which is why you can have >100% penetration in the market.

 

You sound so confident that the gains are temporary. But the data collected by most analyst groups seems to contradict that. In fact, they believe the subscribers are stickier with T-Mobile than they were with their previous mobile network operators. So I will have to disagree.

 

Hey.... I have a serious question....

 

Is this your true identity?

 

IBM-supercomputer-Watson-010.jpg

 

I think, that you think, that I think, that you think, that I already know that answer. :ninja:

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You sound so confident that the gains are temporary. But the data collected by most analyst groups seems to contradict that. In fact, they believe the subscribers are stickier with T-Mobile than they were with their previous mobile network operators. So I will have to disagree.

I hope it's not sticky like fly paper. :P

 

 

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M2M revenue is also pretty high margin (~90% or greater). And subscribership isn't a zero-sum game, which is why you can have >100% penetration in the market.

 

You sound so confident that the gains are temporary. But the data collected by most analyst groups seems to contradict that. In fact, they believe the subscribers are stickier with T-Mobile than they were with their previous mobile network operators. So I will have to disagree.

 

We will see how sticky they are once Sprint has their network in order and actually want to do a serious promotion. If they don't want to do that, maybe they don't want those bandwidth hogs back?

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