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Holy frac...T-Mobile family plan for 4 lines down to $100/month


bigsnake49

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They cannot spread their capex over 100MM people (and maintain the same wireless margins that VZ and T have*).

 

I think that T-Mobile wants to gain market share and say "yeah, we'll make less per customer but ultimately,we'll have more customers, so overall we will make more in the long-term."

 

 

 

What is wrong with 33 billion in debt?  What is wrong with 14 billion in debt?  AT&T has 75 billion in debt.  Verizon has 94 billion in debt.

 

The little two companies are only around because they are highly attractive assets worth billions.  It's not charity - nobody "bailed out" T-Mobile or Sprint.  Softbank looks at Sprint as an investment, not charity care.

 

T-Mobile had 35 million in net income after 4 billion in capital expenditures.  T-Mobile spent more on capital in 2013 than the last three years COMBINED.

 

Sprint's issues are well documented and well compounded - took many years to "right the ship" and we've already started to see margin expansion even with customer losses.

 

It's not that these two entities can't be stand alone - they would be more profitable as combined entities, sure.  But in no way would they not be self-supporting on their own.

 

As a customer, I'll take them on their own and take the cheaper prices.  Again, as a stockholder, I would take them as a combined entity.

 

They will never be able to match the same margins as AT&T and Verizon. There is nothing wrong with debt except you have to pay it back :). In AT&T's and Verizon's case they will be able to pay back the debt faster and the be able to improve their network or purchase companies, or spectrum ,etc.

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They will never be able to match the same margins as AT&T and Verizon. There is nothing wrong with debt except you have to pay it back :). In AT&T's and Verizon's case they will be able to pay back the debt faster and the be able to improve their network or purchase companies, or spectrum ,etc.

 

Or make their stock price go  up faster, higher dividends, etc :)

 

Hence my point, if I was a stockholder, I would be singing a much different tune.

 

Just different ways of looking at it.

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1,000,000 6,759 493,241 1,250,000 1,250,000 1,000,000 1,750,000 1,250,000 1,000,000 1,250,000 5,925 1,744,075 600,000 1,000,000

 

Total Debt 13,600
Total Issues 15

 

Their 2013 Annual Report shows 17 issues and total long-term debt of $19.945 billion. That is also consistent with the reports of Softbank lining up financing to assume T-Mobile's $20 billion debt.

 

Edit: Your numbers are from 2012. They took on a significant amount of additional debt the following year ($6.3 billion) by assuming the obligations of Metro PCS.

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1,000,000 6,759 493,241 1,250,000 1,250,000 1,000,000 1,750,000 1,250,000 1,000,000 1,250,000 5,925 1,744,075 600,000 1,000,000

 

Total Debt 13,600
Total Issues 15

 

According to Morningstar they have $17B http://quicktake.morningstar.com/stocknet/bonds.aspx?symbol=tmus

but the 1st quarter results give their position as $14.6B net debt and $5.5B in cash which gives us a debt of $20.1B http://investor.t-mobile.com/Cache/1001186493.PDF?Y=&O=PDF&D=&fid=1001186493&T=&iid=4091145

Edited by bigsnake49
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Their 2013 Annual Report shows 17 issues and total long-term debt of $19.945 billion. That is also consistent with the reports of Softbank lining up financing to assume T-Mobile's $20 billion in debt.

 

Edit: Your numbers are from 2012. They took on a significant amount of additional debt the following year ($6.3 billion) by assuming the obligations of Metro PCS.

 

I see what you did - you added payments to DK.  Hard to really count affiliate debt.

 

MetroPCS Wireless Inc 7.88 9/1/2018 1,000,000 USD 1,000,000

T-Mobile USA Inc 5.25 9/1/2018 6,759 USD 6,759

T-Mobile USA Inc 5.25 9/1/2018 493,241 USD 493,241

T-Mobile USA Inc 6.46 4/28/2019 1,250,000 USD 1,250,000

T-Mobile USA Inc 6.54 4/28/2020 1,250,000 USD 1,250,000

MetroPCS Wireless Inc 6.63 11/15/2020 1,000,000 USD 1,000,000

T-Mobile USA Inc 6.25 4/1/2021 1,750,000 USD 1,750,000

T-Mobile USA Inc 6.63 4/28/2021 1,250,000 USD 1,250,000

T-Mobile USA Inc 6.13 1/15/2022 1,000,000 USD 1,000,000

T-Mobile USA Inc 6.73 4/28/2022 1,250,000 USD 1,250,000

MetroPCS Wireless Inc 6.63 4/1/2023 5,925 USD 5,925

T-Mobile USA Inc 6.63 4/1/2023 1,744,075 USD 1,744,075

T-Mobile USA Inc 6.84 4/28/2023 600,000 USD 600,000

T-Mobile USA Inc 6.5 1/15/2024 1,000,000 USD 1,000,000

 

 

According to Morningstar they have $17B http://quicktake.morningstar.com/stocknet/bonds.aspx?symbol=tmus

but the 1st quarter results give their position as $14.6B net debt and $5.5B in cash which gives us a debt of $20.1B http://investor.t-mobile.com/Cache/1001186493.PDF?Y=&O=PDF&D=&fid=1001186493&T=&iid=4091145

 

 

Ok - I see what you are saying - they took net debt.  Missed that the first time.  Saying how much debt they have then talking about how NET debt they took the conversation in a different direction...

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I see what you did - you added payments to DK.  Hard to really count affiliate debt.

 

MetroPCS Wireless Inc 7.88 9/1/2018 1,000,000 USD 1,000,000

T-Mobile USA Inc 5.25 9/1/2018 6,759 USD 6,759

T-Mobile USA Inc 5.25 9/1/2018 493,241 USD 493,241

T-Mobile USA Inc 6.46 4/28/2019 1,250,000 USD 1,250,000

T-Mobile USA Inc 6.54 4/28/2020 1,250,000 USD 1,250,000

MetroPCS Wireless Inc 6.63 11/15/2020 1,000,000 USD 1,000,000

T-Mobile USA Inc 6.25 4/1/2021 1,750,000 USD 1,750,000

T-Mobile USA Inc 6.63 4/28/2021 1,250,000 USD 1,250,000

T-Mobile USA Inc 6.13 1/15/2022 1,000,000 USD 1,000,000

T-Mobile USA Inc 6.73 4/28/2022 1,250,000 USD 1,250,000

MetroPCS Wireless Inc 6.63 4/1/2023 5,925 USD 5,925

T-Mobile USA Inc 6.63 4/1/2023 1,744,075 USD 1,744,075

T-Mobile USA Inc 6.84 4/28/2023 600,000 USD 600,000

T-Mobile USA Inc 6.5 1/15/2024 1,000,000 USD 1,000,000

 

 
 

 

I wouldn't go off morningstar.

 

Sounds like the debt is the fair market value, not the par value I am quoting.

 

You don't add current cash to the amount of debt they have.  Cash is cash, debt is debt.

 

You could do cash-to-debt ratio to see how levered they were relative to peers, but you don't add them together.

Net debt = Debt - cash

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I see what you did - you added payments to DK.  Hard to really count affiliate debt.

That $5.6 billion long-term debt to affiliates is DT issued long term debt for the Metro PCS transaction. It absoluetely belongs in long-term debt and it would be assumed as part of any Softbank purchase.

 

http://www.bloomberg.com/news/2013-10-08/deutsche-telekom-said-to-plan-5-6-billion-of-t-mobile-debt-1-.html

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Give it up irev :). They have $20B in debt. We will see how much more they will have tomorrow :).

 

I'll leave it at "sorta".

 

If they were acquired, yes - DK would get paid.

 

If not, there is a lot of "flexibility" with the money that is owed to DK.  

 

 

Net debt = Debt - cash

 

 

Yes, sorry I missed reading the net.  I missed the switch from debt to net debt - sorry about that.

 

 

 

Bottom line - 20 billion or not, it's sort of irrelevant to this conversation.

 

$13.6 billion in bonds

$19.6 billion in total long-term debt

$16.9 billion in net debt

/end arguing about how much debt they have - doesn't really matter which was my original point.

 

All these capital intensive businesses have tons of debt, which is fine, as they kick off a lot of cash to repay their debt.

 

How much extra they should have after it is all said and done is what we were originally arguing about.  Let's stay focused on that :)

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We will see how much more they will have tomorrow :).

 

They did well.

 

Added 1.323 million postpaid, 465k prepaid, total 1.788 million customers.

 

Some how postpaid churn improved to 1.5% from 1.6% a year ago.

 

 

Hrm, do I have this right?  T-Mobile at 50.545 million customers, Sprint at 54.553 million?

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T-Mobile at 50.545 million customers, Sprint at 54.553 million?

I can't imagine Masa being happy in 4th place if Sprint subscriber numbers slip & T-Mobile numbers continue to grow. That could speed up the M&A talks between those two companies...

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I can't imagine Masa being happy in 4th place if Sprint subscriber numbers slip & T-Mobile numbers continue to grow. That could speed up the M&A talks between those two companies...

 

From all the leaks - everything is in place.  The M&A talks are done.

 

I thought it was interesting that T-Mobile already has first 700MHz A block sites on air.  I am wondering how many 700MHz sites T-Mobile will be able to get on air by the end of the year.  Doesn't seem like much but will be interesting to see.

 

AJ could probably chime in here - he is much more familiar.  I know he mentioned that not a significant amount of A block will be available until 600MHz auction time.

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From all the leaks - everything is in place. The M&A talks are done.

I guess then that the delay in announcing was primarily to make a stronger case for the merger to the regulatory bodies, then. I can see where that's going to be a clusterfrack...

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I thought it was interesting that T-Mobile already has first 700MHz A block sites on air.  I am wondering how many 700MHz sites T-Mobile will be able to get on air by the end of the year.  Doesn't seem like much but will be interesting to see.

 

AJ could probably chime in here - he is much more familiar.  I know he mentioned that not a significant amount of A block will be available until 600MHz auction time.

 

What is the source for the on air T-Mobile band 12 sites?  And where are they located?  Or is T-Mobile being intentionally vague?

 

AJ

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What is the source for the on air T-Mobile band 12 sites? And where are they located? Or is T-Mobile being intentionally vague?

 

AJ

It's their 700 FIT. I saw it referenced in one of the docs I read today. But if we are giving credit to Tmo for FIT'S, then Sprint has the best damn network in the world since they are actually building. Right? :)

 

Robert via Nexus 5 using Tapatalk

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What is the source for the on air T-Mobile band 12 sites?  And where are they located?  Or is T-Mobile being intentionally vague?

 

AJ

 

Robert was spot on - it's a TMO FIT

 

Our 700 megahertz A-block spectrum covers 158 million or about 50% of the population in 70% of the existing
T-Mobile customer base. It covers in 9 of the top 10 and 21 of the top 30 metros in the US. I'm thrilled to report the that
first 700 megahertz sites are already on air, compatible handsets are being field tested right now and are expected to be
available for sale by the fourth quarter.
 
About half of the markets covered by A-block spectrum are covered by channel 51, limiting our ability to use the
spectrum until after the incumbent broadcasters are relocating. However, Neville and his team have already entered into
agreements to relocate broadcasters in to new frequencies in five markets covering more than 13 million people making
those markets available for launch in 2015.
 
This is an addition of many markets which are already free and clear today such as Washington DC, Miami, Dallas and
Houston just to name a few. We have recently entered into agreements to acquire A-block spectrum and additional
markets from multiple parties covering 8.7 million POPs for approximately $15.5 million. That translates into an
average megahertz per POP price of approximately 0.48 compared to 1.85 per megahertz POP price we pay in the
Verizon A-block transaction.
 
As we've said before, we will be opportunistic and discipline price. And I believe we have several options for adding
low band spectrum to our portfolio, including the 600 megahertz incentive auctions next year.
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It's their 700 FIT. I saw it referenced in one of the docs I read today. But if we are giving credit to Tmo for FIT'S, then Sprint has the best damn network in the world since they are actually building. Right? :)

 

Yes, T-Mobile does give us FITs.

 

AJ

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If you really think about it, there is not really anything new at T-Mobile because all they really have done is painting old MetroPCS plans magenta. Look at MetroPCS, they have been offering this for some time and no big deal. 

 

All T-Mobile is good at, recycling old rate plans with a new paint job.

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If you really think about it, there is not really anything new at T-Mobile because all they really have done is painting old MetroPCS plans magenta. Look at MetroPCS, they have been offering this for some time and no big deal. 

 

All T-Mobile is good at, recycling old rate plans with a new paint job.

 

But they do a great job at generating customer buzz.

 

Customer buzz drives bodies into stores, which drives sales.

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If you really think about it, there is not really anything new at T-Mobile because all they really have done is painting old MetroPCS plans magenta. Look at MetroPCS, they have been offering this for some time and no big deal. 

 

All T-Mobile is good at, recycling old rate plans with a new paint job.

 

Except that the MetroPCS plans are only for brand new customers and have 2 GB less data per line, but yeah you are right 4 for $100 isn't anything new.  MetroPCS stores are pretty bad, the authorized retailers mainly though selling phones only with a plan and not letting people sign up for the $40 plan cause they want to make more money. 

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No the plans are new but there a couple of things wrong with them. They are offered for a limited time and the plan itself lasts fora limited time. It just smells like a pump and dump scheme to me. They are timing it so that whoever acquires them has to pay extra for all these new customers but then get's stuck with all these customers at a very cheap plan who then can all leave the moment the plan reverts to less data. Can we say churn city boys and girls? I thought we could! Not to mention the fact that it's not a shared plan so that my daughter's high consumption can be smoothed out by the rest of the family's low consumption.

Edited by bigsnake49
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No the plans are new but there a couple of things wrong with them. They are offered for a limited time and the plan itself lasts fora limited time. It just smells like a pump and dump scheme to me. They are timing it so that whoever acquires them has to pay extra for all these new customers but then get's stuck with all these customers at a very cheap plan who then can all leave the moment the plan reverts to less data. Can we say churn city boys and girls? I thought we could! Not to mention the fact that it's not a shared plan so that my daughter's high consumption can be smoothed out by the rest of the family's low consumption.

 

Interesting opinion - it seems like their lower churn, improving margins, strong customer growth don't really support your facts...

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Interesting opinion - it seems like their lower churn, improving margins, strong customer growth don't really support your facts...

 

My sense of things is that while all of those things are true for now, it's because T-Mobile is at an unusually good position in its network upgrade cycle: the network is reasonably up-to-date and with the MetroPCS merger relatively underutilized, so they can bring in new customers for now and they'll have a relatively good experience in most urban (e.g. WCDMA or LTE) markets.

 

The problem is that they're selling service below their long-term cost of CAPEX to maintain or improve the current network; building out A-block 700 and whatever they get from the upcoming auctions won't be cheap, and I think they're going to be caught with a lot of customers not under contract who can easily switch to AT&T (and in the future as VoLTE rolls out Sprint and Verizon), all three of whom could more sustainably match or beat T-Mobile pricing while keeping their networks operating smoothly (VZW and AT&T because customer adds are a drop in their bucket, Sprint because of the ability to evolve NV).

 

It seems very likely T-Mobile is going to hit a wall soon maxxing out the backhaul and facilities they built for WCDMA late last decade along with MetroPCS' bolt-on LTE. Sprint's new network is being built for 2020; T-Mobile's is largely being patched up to get through 2015-16 (with a good chunk still built for the pre-iPhone era, lest we forget).

 

Not to mention: who knows how much T-Mobile has held back on network investment during its dalliances with AT&T and Sprint? If Legere thought he was going to slap RRUs and 700+AWS antennas up on each Sprint NV tower to evolve T-Mobile LTE through 2020 (since the existing NV equipment could be firmware-upgraded to add T-Mobile's band 2 LTE and WCDMA in PCS) and turn off their current equipment in overlapping areas, T-Mobile is going to be in a world of pain.

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