Official Tmobile-Sprint merger discussion thread

[bigsnake49]

3 hours ago, utiz4321 said:

Well, I would have expected AT&T to have raised prices after both Verizon and T-Mobile did, yet they did not. A combined T-Mobile/sprint would have the spectrum resources to offer unlimited data for a long time to come as well as being a home ISP. Price is going to depend of where profit maximizations occurs. Upward pressure in this formula would come from less competition but downward pressure is going to come from scale, synergies and spectrum resources being more highly concentrated.

 

 

Home ISP? Maybe in rural areas.

[utiz4321]

Home ISP? Maybe in rural areas.

I dont think so. Masa was talking up being an home ISP competitor the first time he floated this merge idea.

 

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[dkyeager]

The key item driving this merger idea forward is the cost of 5G which will be necessary to compete.  The game will radically change soon when Verizon rolls out 5G.  Sprint brings high band, T-Mobile bring better low band, and combining customers brings economies of scale.  The new entity wouldn't be able to dramatically raise prices on its own.  Instead they will need to retain customers and keep up customer growth.  I don't expect dramatic site reductions outside of marginal customer areas.  The network will be more steady once fully combined.  Would this merger be like Nextel or MetroPCS? Only time will tell.

The Shentel-Ntelos merger FCC settlement did address updating of handsets, so I expect this will ultimately have to do the same.

[bigsnake49]

A very decent article summarizing the pros of the merger:

http://www.fiercewireless.com/wireless/lowenstein-s-view-it-s-time-for-t-mobile-and-sprint

[Nextel49]

https://www.google.com/amp/mobile.reuters.com/article/amp/idUSKBN1CG2OH#ampshare=https://www.reuters.com/article/us-sprint-corp-m-a-t-mobile/t-mobile-sprint-deal-likely-opposed-by-justice-dept-staff-sources-idUSKBN1CG2OH

[RedSpark]

7 hours ago, Nextel49 said:

https://www.google.com/amp/mobile.reuters.com/article/amp/idUSKBN1CG2OH#ampshare=https://www.reuters.com/article/us-sprint-corp-m-a-t-mobile/t-mobile-sprint-deal-likely-opposed-by-justice-dept-staff-sources-idUSKBN1CG2OH

This merger doesn't need to happen. Sprint is completely capable of being a competitive player in the marketplace without resorting to a merger with T-Mobile.

I keep thinking back to AT&T which wanted to merge with T-Mobile... and very similar promises were made about how competition would be preserved. And then that Merger Document leaked and it was clear that the merger was BS.

• For the first time the letter pegs the cost of bringing AT&T's LTE coverage from 80% to 97% at $3.8 billion -- quite a cost difference from the $39 billion price tag on the T-Mobile deal. The push for 97% coverage apparently came from AT&T marketing, who was well aware that leaving LTE investment at 80% would leave them at a competitive disadvantage to Verizon. Marketing likely didn't want a repeat of the Luke Wilson map fiasco of a few years back, when Verizon made AT&T look foolish for poor 3G coverage.

AT&T was willing to spend 10x the amount of money over a network build cost to knock T-Mobile as a competitor off the market.

None of this needs to happen here. Sprint has to keep paying down its debt, which over time will free up additional funds for CapEx. Network improves, better customer experience means more customers which means more funds to pay down debt. Repeat. This is already happening and it's why Sprint isn't in a death spiral now.

Here's what Sprint needs to do right now:

1) Fire leadership in the marketing department. Sprint's marketing message is inconsistent and incoherent. There's no real brand message/advantage with "1% difference". Sprint should be saying "Great service at a great price"... and deliver that. That's it.

2) Fire leadership in the website department. Sprint's website is a tangle of non-skinned legacy content mixed with skinned-over legacy content. One crappy retail store might affect a subset of people, but a crappy website affects everyone visiting it. Sprint needs a "Tiger Team" to fix this pronto.

3) Sign national deals for Magic Box with major retailers: CVS/Walgreens, Safeway, Target, etc. Place Magic Boxes in every qualifying address/location. Put a sticker on the entrance which says Sprint Magic Box. Make it clear that people will have coverage when they go in the store. More time in the store means more money spent in the store. This should be obvious to the retail partners.

4) Stand up a new profitable division: The Event Coverage Group. This group would have a page on the Sprint website through which event organizers could request COWS/COLTS or perhaps one day "Flying Magic Boxes". Sprint would profit from doing this by charging for the coverage. When the Sprint crews go to events, they need to bring Sprint Branding with them. If it's a music event, get the TIDAL team there. This is branding. This is effective brand messaging. This is exposure.

This merger doesn't need to happen for Sprint to succeed in the long run as a viable competitor. Ultimately, the joke will be on us in the form of higher prices if it goes through IMHO.

[utiz4321]

10 minutes ago, danlodish345 said:

I have a feeling it’s going to be blocked the merger. It’s all over the news.


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The decision isnt in the hands of the DOJ staff.  It is in the hands of a trump DOJ appointee that is a completely "hands-off" free marketer. I doubt it gets blocked.

[derrph]

Why wasn’t there a break up fee?

Combining Sprint and T-Mobile has its perks network wise but I think these two can stand on their own. I think Son just wants Sprint off his hands period. With 5G rolling around I think Sprint is in the best position. I do feel like Sprint will be the smaller carrier coverage wise if not allowed to merge. For most people that’s totally ok as long as their service works where they live.


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[RedSpark]

10 minutes ago, utiz4321 said:

I like how you know what does and doesn't need to happen, as well how you seem to have devine knowledge on what the proper structure of the wireless industry. How are you so much smarter than the aggravated decisions of 100s of millions of people?

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The primary argument for a merger I've seen, at least as I understand it, is "scale": "Sprint/T-Mobile as a merged company will be better capitalized to compete against Verizon/AT&T."

I think this argument is total BS. Look what T-Mobile was able to accomplish since the AT&T merger failed. It's on fire. Customer acquisition is through the roof. It's marketing message is on point. T-Mobile doesn't need Sprint to compete.... and Sprint doesn't need T-Mobile to compete. T-Mobile is eating into Verizon/AT&T. When Sprint finally gets its act together, it will too.

Yeah T-Mobile got a few billion dollars and some spectrum from AT&T as part of the merger breakup fee, but it could have just as easily blown the money on failed marketing and failed branding.... but it didn't.

Sure T-Mobile/Sprint may want the market to have only three major players as a result of a merger... but that may not be in the best interests of consumers in terms of price.

[utiz4321]

The primary argument for a merger I've seen, at least as I understand it, is "scale": "Sprint/T-Mobile as a merged company will be better capitalized to compete against Verizon/AT&T."
I think this argument is total BS. Look what T-Mobile was able to accomplish since the AT&T merger failed. It's on fire. Customer acquisition is through the roof. It's marketing message is on point. T-Mobile doesn't need Sprint to compete.... and Sprint doesn't need T-Mobile to compete. T-Mobile is eating into Verizon/AT&T. When Sprint finally gets its act together, it will too.
Yeah T-Mobile got a few billion dollars and some spectrum from AT&T as part of the merger breakup fee, but it could have just as easily blown the money on failed marketing and failed branding.... but it didn't.
Sure T-Mobile/Sprint may want the market to have only three major players as a result of a merger... but that may not be in the best interests of consumers in terms of price.

The problem is the market doesnt. And the market is alot smarter than you and I. We should probably weight it's opinions higher than our own.

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[RedSpark]

3 minutes ago, utiz4321 said:

The problem is the market doesnt. And the market is alot smarter than you and I. We should probably weight it's opinions higher than our own.

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You and I are the market... but you have to decide whether you are looking at the market as a customer or as an investor.

As an investor, a person wants "Return on Investment". All this noise about scale, merger, etc. That's institutional investor PR and FUD to move the stock price around. Unless I'm holding Sprint stock directly or through some investment vehicle, I don't care about return on investment.

As a Sprint customer, I care about good service at a good price:

Do I think merging with T-Mobile will "improve" my Sprint service through increased scale? Sure.

Do I think it will result in higher prices from less competition? Absolutely.

Is it necessary for Sprint to merge for the company to survive? Absolutely not. Sprint can succeed on its own. Just look at what T-Mobile has been able to do.

[dkyeager]

1 hour ago, RedSpark said:

Is it necessary for Sprint to merge for the company to survive? Absolutely not. Sprint can succeed on its own. Just look at what T-Mobile has been able to do.

The problem for Sprint is that T-Mobile sucked the air out of the room.  Had Sprint gotten rolling a few years sooner, the story would likely be quite different.  Sprint likely missed this window of opportunity.   The window of opportunity for a merger is now, before Verizon gets 5g rolling and while there is a Republican in the Whitehouse.

[dkyeager]

1 hour ago, derrph said:

Why wasn’t there a break up fee?

Combining Sprint and T-Mobile has its perks network wise but I think these two can stand on their own. I think Son just wants Sprint off his hands period. With 5G rolling around I think Sprint is in the best position. I do feel like Sprint will be the smaller carrier coverage wise if not allowed to merge. For most people that’s totally ok as long as their service works where they live.


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I think it is just as likely that Softbank increases their investment in the merged company.

[dkyeager]

https://www.wirelessweek.com/news/2017/10/report-doj-staff-likely-oppose-t-mobile-sprint-merger

Staff recommendations are not always accepted, but not good news for the pro merger camp.

[RedSpark]

12 hours ago, dkyeager said:

The problem for Sprint is that T-Mobile sucked the air out of the room.  Had Sprint gotten rolling a few years sooner, the story would likely be quite different.  Sprint likely missed this window of opportunity.   The window of opportunity for a merger is now, before Verizon gets 5g rolling and while there is a Republican in the Whitehouse.

I don’t think it’s too late for Sprint.

Similar things were said about T-Mobile at one point...

Apple too for that matter.

[bigsnake49]

9 hours ago, RedSpark said:

I don’t think it’s too late for Sprint.

Similar things were said about T-Mobile at one point...

Apple too for that matter.

It is too late. They don't have the money to improve their network so they have to compete on price. When they compete on price they don't have the money to improve their network. It's a vicious cycle. It does not help that T-Mobile has realized most of their gains in customers at the expense of Sprint. If T-mobile actually makes good on their promise of deploying 600Mhz spectrum on an accelerated spectrum, you can kiss Sprint's behind goodbye. I am sure they can then make an alliance with Dish to get access to Dish's spectrum. T-Mobile can make it alone. Sprint cannot. Not as a truly nationwide provider.

[Tengen31]

It is too late. They don't have the money to improve their network so they have to compete on price. When they compete on price they don't have the money to improve their network. It's a vicious cycle. It does not help that T-Mobile has realized most of their gains in customers at the expense of Sprint. If T-mobile actually makes good on their promise of deploying 600Mhz spectrum on an accelerated spectrum, you can kiss Sprint's behind goodbye. I am sure they can then make an alliance with Dish to get access to Dish's spectrum. T-Mobile can make it alone. Sprint cannot. Not as a truly nationwide provider.

While I don't agree with you. Id also like to see Sprint partner with USCC. Uscc customers complain about Coverage. Uscc could ride on Sprint and Sprint could gain native coverage on USCC. Plus uscc owns Nationwide Spectrum. So for example on the Dakota's where coverage needs to be added they could do Band 25,26 which Sprint would do, then add uscc AWS which could be cheaper than B41.

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[bigsnake49]

4 minutes ago, Tengen31 said:

While I don't agree with you. Id also like to see Sprint partner with USCC. Uscc customers complain about Coverage. Uscc could ride on Sprint and Sprint could gain native coverage on USCC. Plus uscc owns Nationwide Spectrum. So for example on the Dakota's where coverage needs to be added they could do Band 25,26 which Sprint would do, then add uscc AWS which could be cheaper than B41.

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Can you provide me with a reference to their nationwide spectrum?

[Tengen31]

Can you provide me with a reference to their nationwide spectrum?

http://specmap.sequence-omega.net/

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[RedSpark]

8 minutes ago, bigsnake49 said:

It is too late. They don't have the money to improve their network so they have to compete on price. When they compete on price they don't have the money to improve their network. It's a vicious cycle. It does not help that T-Mobile has realized most of their gains in customers at the expense of Sprint. If T-mobile actually makes good on their promise of deploying 600Mhz spectrum on an accelerated spectrum, you can kiss Sprint's behind goodbye. I am sure they can then make an alliance with Dish to get access to Dish's spectrum. T-Mobile can make it alone. Sprint cannot. Not as a truly nationwide provider.

They don't have the Money?

Here's the presentation where Sprint announced CapEx of $3.5 Billion to $4 Billion for FY2017 during the Fiscal 1Q2017 earnings call.

Here's the Transcript from the Earnings Call where the CFO specifically commented on CapEx.

[S4GRU]

8 minutes ago, Tengen31 said:

http://specmap.sequence-omega.net/

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Click on the hyperlink for this license. Look at the Map tab and see where they actually have licenses in that broad area. 

[bigsnake49]

Just now, RedSpark said:

They don't have the Money?

Here's the presentation where Sprint announced CapEx of $3.5 Billion to $4 Billion for FY2017 during the Fiscal 1Q2017 earnings call.

Here's the Transcript from the Earnings Call where the CFO specifically commented on CapEx.

We have all heard those promises before, like in 2016.

[RedSpark]

4 minutes ago, bigsnake49 said:

We have all heard those promises before, like in 2016.

What promise?

[bigsnake49]

3 minutes ago, S4GRU said:

Click on the hyperlink for this license. Look at the Map tab and see where they actually have licenses in that broad area. 

They have a 5Mhz license that covers 3/4 of the US but not the East coast and Northeast nor Florida. Their holdings are scattered. It would be beneficial if Sprint acquired them and horsetraded with carriers that already own AWS spectrum for some PCS spectrum. Adding yet another band to support is probably not worth it for Sprint and USCC has not deployed that spectrum either.

[bigsnake49]

15 minutes ago, RedSpark said:

What promise?

“When you look at our guidance for fiscal year ’16, we continue to say that we expect adjusted cash flow to be around breakeven, which reflects the fact that we are reducing our capex guidance from less than $3 billion to (a range of) $2 billion to $2.3 billion,” CFO Tarek Robbiati said during an earnings call this morning.

The move marks at least the third time Sprint has lowered its capex guidance for fiscal year 2016. In May it reduced the figure from $4.5 billion to $3 billion, then in October it lowered it from $3 billion to “less than $3 billion.”

http://www.fiercewireless.com/wireless/sprint-lowers-capex-guidance-again-raising-concerns-over-network