Official Tmobile-Sprint merger discussion thread

[belusnecropolis]

1 minute ago, Brad The Beast said:

Any thoughts on purchasing some of Dish's 600MHz for the first 9 5G cities? It would improve coverage where a lot of the people and money are. They would be able to get a minimum 10x10 in 7 out of the 9 cities. Then purchase some more low band when they go to deploy 5G in more locations? 

It would be neat, odds are against it. More possible in the event of a merger falling through I suppose. 

3 minutes ago, Brad The Beast said:

Ok. That makes sense. What do you think of a phased rural low band deployment?

We have seen a couple projects at expansion with Sprint, cedar and such. Some they ended up leasing their band 25 license to an affiliate to complete build out requirements. So maybe?

[RAvirani]

42 minutes ago, belusnecropolis said:

It would be neat, odds are against it. More possible in the event of a merger falling through I suppose. 

We have seen a couple projects at expansion with Sprint, cedar and such. Some they ended up leasing their band 25 license to an affiliate to complete build out requirements. So maybe?

Project Cedar never really came to fruition. Most of the CellularOne sites were never touched and I believe leases have started to expire.

Project Ocean was more of a rural densification than a coverage expansion. 

We've seen a fair number of affiliate agreements involving spectrum leasing and roam-like-home coverage. I'd say these are more likely moving forward than native expansion. We haven't seen significant native coverage expansion in a while. 

That being said, if the merger falls through, there's no saying what will happen. Sprint will need to do something big if they want to stay a major provider/competitor. 

[Brad The Beast]

1 hour ago, RAvirani said:

Project Cedar never really came to fruition. Most of the CellularOne sites were never touched and I believe leases have started to expire.

I was curious about that. Looking at the tower maps nothing really happened. Wonder what will happen to all the sites that are "New Site in Planning - On Air Date TBD". 

1 hour ago, RAvirani said:

Sprint will need to do something big if they want to stay a major provider/competitor. 

Wonder what they could actually do given their current situation?

[dkyeager]

3 minutes ago, Brad The Beast said:

I was curious about that. Looking at the tower maps nothing really happened. Wonder what will happen to all the sites that are "New Site in Planning - On Air Date TBD". 

Wonder what they could actually do given their current situation?

1) advertise their 5G service coverage areas

2) find another merger partner

3) abandon service in unprofitable parts of the country by striking a longer term roaming deal with T-Mobile

4) change their name to match their related Japanese carrier and/or merger with them

[Brad The Beast]

2 minutes ago, dkyeager said:

2) find another merger partner

US Cellular maybe?

2 minutes ago, dkyeager said:

3) abandon service in unprofitable parts of the country by striking a longer term roaming deal with T-Mobile

Totally dismantle towers and expand the roaming agreement? Or discontinue expansion in these areas and expand the roaming agreement?

3 minutes ago, dkyeager said:

4) change their name to match their related Japanese carrier and/or merger with them

Become SoftBank US and do a total rebrand? 

[dkyeager]

3 hours ago, Brad The Beast said:

US Cellular maybe?

Totally dismantle towers and expand the roaming agreement? Or discontinue expansion in these areas and expand the roaming agreement?

Become SoftBank US and do a total rebrand? 

One Of the cable companies or Dish would be my bet.  US Cellular does not want to merge and is not big enough to gobble Sprint.

Marcello discussed Sprint being forced to become a regional carrier, so areas would be dropped.

Softbank spun off its Japanese cellular business so this could be possible.  But normally you don't want to combine a cash cow with a dog like Sprint.  The rebrand part might work. 

Mergers can also general cash for improvements, unless an outsider drive the price too high (Dish bidding for Clearwire ate most of Sprint's CAPex.  With more initial CAPex, then it would have been much more difficult for T-Mobile.  Instead T-Mobile sucked the air out of the room. 5G is a new opportunity, but merging should have been completed early last year.  Ideally Sprint would have put up all Massive MIMOs rather than 8T8Rs, at least in areas with large B41 holdings.

But you are where you are. 5G is the opportunity so we will see how Sprint handles it.  We have front row seats.  Regulators are also watching IMO before they make a decision on the current merger.

[bigsnake49]

22 hours ago, Terrell352 said:

I still believe that dish and Sprint together makes sense. Not to mention more lowband for Sprint that they could use for 5G

Sent from my SM-G965U using Tapatalk
 

Dish is too cheap to actually contribute money to the merger. Now, Sprint Dish and the cable companies might make some sense. Comcast has some 600Mhz spectrum which combined with Dish's 600Mhz will enhance Sprint's low band holdings. Deploying Dish's + Comcast's spectrum will take some money which Sprint does not have. But Dish does have some useful spectrum for sure.

[Brad The Beast]

I'm curious as to what will happen with the Verizon roaming agreement since they are shutting down their CDMA network at the end of the year. They provide a lot of voice roaming coverage for Sprint. 

[dkyeager]

22 minutes ago, Brad The Beast said:

I'm curious as to what will happen with the Verizon roaming agreement since they are shutting down their CDMA network at the end of the year. They provide a lot of voice roaming coverage for Sprint. 

Which is the reason for roaming agreements with AT&T and T-Mobile

 

[Brad The Beast]

2 minutes ago, dkyeager said:

Which is the reason for roaming agreements with AT&T and T-Mobile

 

I thought the roaming agreements with AT&T and T-Mobile were data only?

[banananuts87]

24 minutes ago, Brad The Beast said:

I'm curious as to what will happen with the Verizon roaming agreement since they are shutting down their CDMA network at the end of the year. They provide a lot of voice roaming coverage for Sprint. 

Hence the roaming agreements with ATT and T-Mobile. Forced to use VoLTE for calls and pay the roaming fees for it. 

 

Helps that Sprint has aggressively been upgrading clear towers to Triband too!

[banananuts87]

Just now, Brad The Beast said:

I thought AT&T and T-Mobile were data only?

Technically it’s all data as service is digital 😉

[Brad The Beast]

1 minute ago, banananuts87 said:

Helps that Sprint has aggressively been upgrading clear towers to Triband too!

It does but coverage is still severely lacking though.

[dkyeager]

They should have enough speed for VoLTE.

[Brad The Beast]

Just now, dkyeager said:

They should have enough speed for VoLTE.

So it'll be forced VoLTE then. Ok, that'll be good. 

[red_dog007]

What Sprint needs to just do is spend the capex.  Look what TMobile has been able to do with 4~5 billion in capex since 2013.  Now that Sprint is back up to 5 billion, we are seeing movement.  They can do what what they think is best, but just keep spending that money.  This will be their best ROI.  

They have excellent LTE roaming agreements and 3 more years with TMobile, no need to focus on that level of network expansion.  Honestly, I'd rather them continue with these native roaming agreements vs expanding into their territory.  

[belusnecropolis]

4 hours ago, red_dog007 said:

What Sprint needs to just do is spend the capex.  Look what TMobile has been able to do with 4~5 billion in capex since 2013.  Now that Sprint is back up to 5 billion, we are seeing movement.  They can do what what they think is best, but just keep spending that money.  This will be their best ROI.  

They have excellent LTE roaming agreements and 3 more years with TMobile, no need to focus on that level of network expansion.  Honestly, I'd rather them continue with these native roaming agreements vs expanding into their territory.  

You are asking the current c suite to pour money into an indefinite time period or outcome that is up in the air based on souring regulators. We have seen the absolute limits of exposure to debt financing that softbank will endure for Sprint. They will quickly cut this down based on previous spend. They have made this company as lean as possible and mortgaged several key components of the existing Sprint entity to continue operation. The only way to expect a continued spend is a sale, that much is clear by Softbank's capitulation on majority share, stake and direction in a new company. 

John Legere flew to Tokyo instead of Hodges(spelletry) that message was quite clear. It is a sale to reduce exposure, a merger to free up softbank spend, or a devaluation of shares and expected firesale. This company needs a serious buyer or backer that is not a foreign banking asset. Until then one should limit market exposure based on past events, no?

Pick one.

[belusnecropolis]

6 hours ago, red_dog007 said:

What Sprint needs to just do is spend the capex.  Look what TMobile has been able to do with 4~5 billion in capex since 2013.  Now that Sprint is back up to 5 billion, we are seeing movement.  They can do what what they think is best, but just keep spending that money.  This will be their best ROI.  

They have excellent LTE roaming agreements and 3 more years with TMobile, no need to focus on that level of network expansion.  Honestly, I'd rather them continue with these native roaming agreements vs expanding into their territory.  

Also, we have had this conversation for years now. See Admin Robert posting 3 years back how after T-mo's band 4 rollout, Sprint could aggressively act in respect to a band 41 overlay. We just keep waiting and now as a merger approaches we see capex expand, a new CEO with a history of overspending is installed, whilst we are expected to accompany this rollout with pride. This was due 2-4 years ago. We are getting 8t8r in areas we thought would get minimacs and NR in areas those 8t8r were just installed.

While we benefit from these they should or could have been there years ago. This has got to be the biggest catch up we have seen on a macro level, and as usual Sprint is tripping over itself via inefficiency. I like the service, but it is not an enhancement or expansion. 

Like dood said in another thread we won't see densification, the last few plans fell flat via project cedar and such, small cells are being removed, actually taken out and replaced in other areas. If you give this c suite money, expect it to be dropped on a buyback if you are lucky.

[dkyeager]

5 hours ago, belusnecropolis said:

We just keep waiting and now as a merger approaches we see capex expand, a new CEO with a history of overspending is installed, whilst we are expected to accompany this rollout with pride. This was due 2-4 years ago.

*** Agree that a more stable expansion would have better served Sprint, but such is the nature of any cash constrained business. ***

We are getting 8t8r in areas we thought would get minimacs and NR in areas those 8t8r were just installed.

*** This was anticipated by installation firms. Projects planned long ago being completed. Needs being addressed by available equipment.  Project completion targets must be met. Also note that MMs need contiguous spectrum while 8T8Rs can handle fragmented spectrum.***

Like dood said in another thread we won't see densification.

*** Former Clear areas are getting a dramatic densification right now.  Just hope it is complete before possible merger as we could be stuck with what we have for a few years.  Even getting a few new sites to cover gaps. 

Tribanding more sites and Massive MIMO could lead to moving small cells -- merger definitely would. Small cells also count for densification.***

 

[dro1984]

The FCC clock begins to count again tomorrow.    Do you think we will get any action this week?    The longer they take to review the more the opposition has to cause issues.     After nearly a year... I'm thinking the DOJ or FCC would have called it off by now, but who knows?

[dkyeager]

5 hours ago, dro1984 said:

The FCC clock begins to count again tomorrow.    Do you think we will get any action this week?    The longer they take to review the more the opposition has to cause issues.     After nearly a year... I'm thinking the DOJ or FCC would have called it off by now, but who knows?

A year does not surprise me.  Even more time needed since we are likely on Merger 3.0 from a government paperwork standpoint.  Don't forget that there is middle ground: DOJ basically accepts, FCC requires a lot of spectrum divestiture. The would be the scenario of where T-Mobile could walk and owe Sprint $400 million.

[dro1984]

7 hours ago, dkyeager said:

A year does not surprise me.  Even more time needed since we are likely on Merger 3.0 from a government paperwork standpoint.  Don't forget that there is middle ground: DOJ basically accepts, FCC requires a lot of spectrum divestiture. The would be the scenario of where T-Mobile could walk and owe Sprint $400 million.

I don't think anyone is walking away with any money.   That was never in the Merger agreement.   I also don't think the FCC is going to be the tough sell here, I think the DOJ will be.  I believe that "if" the merger is approved, I don't see much divestiture.  What do either company really have to give up?   I think if there is, it will be somewhat minimal.    To force Sprint to give up any 2.5G, would kinda kill the whole point of the merger.   To get rid of any low band, like Sprint's 800 or T Mob's 600/700mhz would also hurt for the same reasons. Perhaps the only part I can see is giving up the 800 band that Sprint has.   I think T Mobile has enough 600 to more than make up for it.     Just my thoughts. 

[Mercurial1]

If TMobile walks due to concessions required by fcc they owe no money. If they just walk then they owe sprint.

Sent from my SM-N960U using Tapatalk

[dkyeager]

Actually $600 Million.

1 hour ago, dro1984 said:

 That was never in the Merger agreement.

In the event that (i) T-Mobile terminates this Agreement pursuant to Section 8.1(b)(i), (ii) at the time of such termination, all of the conditions set forth in Section 7.1 (other than the condition set forth in Section 7.1(g)) and all of the conditions set forth in Section 7.2 would be satisfied at the time of such termination if the Closing were held at the time of such termination, and (iii) Sprint has provided a written certification to T-Mobile that it stands ready, willing and able to consummate the Merger on the date required by Section 1.3 at the time of termination of this Agreement (a “Specified Termination”), then T-Mobile shall pay to Sprint, on the date of termination of this Agreement, an amount equal to $600,000,000 (the “Payment Amount”); provided, that notwithstanding the foregoing, T-Mobile shall have no obligation to pay the Payment Amount (in whole or in part) and may terminate this Agreement pursuant to Section 8.1(b)(i) without paying the Payment Amount if:

 

(i)                                     on the date of termination of this Agreement pursuant to the Specified Termination, Sprint does not have the following three credit ratings:  (A) a corporate family rating (CFR) of at least “B2” from Moody’s Investors Services, Inc., (B) a long-term issuer credit rating of at least “B” from Standard & Poor’s Financial Services LLC, and (C) a long-term issuer credit rating of at least “B+” from Fitch, Inc., unless Sprint does not have any such credit rating due to a change in credit ratings or credit outlook generally affecting the industry in which Sprint operates; or

 

(ii)                                  Sprint or any of the SoftBank Parties has breached in any material respect any of its representations, warranties, covenants or agreements set forth in this Agreement and such breach has impacted any of the credit ratings described in clause (i) of this Section 8.2(b) or the ability of T-Mobile to obtain the credit ratings described in Section 7.1(g).

 

Source: https://www.sec.gov/Archives/edgar/data/101830/000110465918028087/a18-12444_1ex2d1.htm

 

 

 

Section 7.1.                                 Conditions to Each Party’s Obligation to Effect the Merger Transactions.  The respective obligations of each party to effect the Merger Transactions are subject to the satisfaction or waiver, in whole or in part (to the extent permitted by applicable Law), on or prior to the Closing Date of the following conditions:

 

(a)                                 Stockholder Approvals.  Each of the Sprint Stockholder Approval and the T-Mobile Stockholder Approval shall have been obtained.

 

(b)                                 Required Regulatory Consents.  (i) The waiting period (and any extension thereof) applicable to the Merger Transactions under the HSR Act shall have been terminated or shall have expired and (ii) all consents required to be obtained from the FCC in connection with the transactions contemplated by this Agreement shall have been granted by the FCC.

 

(c)                                  Other Governmental Consents.  (i) All consents required to be obtained from any PUCs or similar state and foreign regulatory bodies in connection with the transactions contemplated by this Agreement shall have been obtained, (ii) all consents required to be obtained pursuant to any Antitrust Laws other than the HSR Act set forth on Section 7.1(c)(ii) of the T-Mobile Disclosure Letter in connection with the consummation of the transactions contemplated by this Agreement shall have been obtained, (iii) CFIUS shall have completed its review and, where applicable, investigation under Section 721 without unresolved national security concerns with respect to the transactions contemplated by this Agreement, and (iv) DSS shall have approved a plan to operate pursuant to a FOCI mitigation agreement those NISPOM covered activities of T-Mobile, Sprint and their respective subsidiaries that DSS determines are necessary to be operated pursuant to such an agreement, or shall have accepted a commitment from the parties to implement such FOCI mitigation agreement following the Closing.

 

(d)                                 No Injunctions or Restraints.  No court or other Governmental Entity of competent jurisdiction shall have entered, enacted, promulgated, enforced or issued any Law (whether temporary, preliminary or permanent) preventing the consummation of the Merger (a “Restraint”).

 

(e)                                  Form S-4.  The Form S-4 shall have become effective under the Securities Act prior to the mailing of the Consent Solicitation Statement by each of Sprint and T-Mobile to their respective stockholders, and no stop order or proceeding seeking a stop order shall be threatened by the SEC or shall have been initiated by the SEC.

 

(f)                                   NASDAQ Listing.  The shares of T-Mobile Common Stock issuable to the stockholders of Sprint as contemplated by Article III shall have been approved for listing on NASDAQ, subject to official notice of issuance.

 

(g)                                  Ratings.  On the Closing Date, T-Mobile USA, Inc., taking into account and after giving effect to the Merger and the other transactions contemplated by and relating to this Agreement, shall have at least two of the following three credit ratings:  (i) a corporate family rating (CFR) of at least “Ba2” from Moody’s Investors Services, Inc., (ii) a long-term issuer

 

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credit rating of at least “BB” from Standard & Poor’s Financial Services LLC, and (iii) a long-term issuer credit rating of at least “BB” from Fitch, Inc., provided, however, that the foregoing condition in this Section 7.1(g) shall be deemed satisfied if, on the Closing Date (or, earlier, upon the date of issuance by T-Mobile USA, Inc. of debt securities in an amount sufficient to replace in full the commitments under the bridge facilities in the Commitment Letter), T-Mobile USA, Inc., taking into account and after giving effect to the Merger and the other transactions contemplated by and relating to this Agreement, shall have at least two of the following three public credit ratings on not less than $45,000,000,000 of secured debt: (i) a secured tranche rating of at least “Baa3” from Moody’s Investors Services, Inc., (ii) a secured tranche rating of at least “BBB-” from Standard & Poor’s Financial Services LLC, and (iii) a secured tranche rating at least “BBB-” from Fitch, Inc.; provided, further, that no party may rely on the failure of the condition set forth in this Section 7.1(g) to be satisfied if such failure was principally caused by such party’s material breach of any material provision of this Agreement or such party’s failure to act in good faith.

 

Section 7.2.                                 Conditions to Obligations of T-Mobile, Merger Sub, Merger Company and the DT Parties.  The obligations of T-Mobile, Merger Sub, Merger Company and the DT Parties to effect the Merger Transactions are further subject to the satisfaction or waiver, in whole or in part (to the extent permitted by applicable Law), of the following conditions:

 

(a)                                 Representations and Warranties.  (i) The representations and warranties of Sprint contained in the first sentence of Section 4.1(a), Section 4.1(b)(i), Section 4.1(c)(iii), Section 4.1(m), Section 4.1(t), Section 4.1(v) and Section 4.1(w) (without giving effect to any limitation as to “materiality,” “Material Adverse Effect” or any provisions relating to preventing or materially delaying the consummation of any of the transactions contemplated hereby set forth therein) shall be true and correct in all material respects as of the Closing Date as though made on the Closing Date (except to the extent such representations and warranties expressly relate to a specific date or the date of this Agreement, in which case such representations and warranties shall be true and correct in all material respects as of such date), (ii) the representations and warranties of Sprint contained in Section 4.1(c)(i) and Section 4.1(c)(ii) shall be true and correct as of the Closing Date as though made on the Closing Date (except to the extent such representations and warranties expressly relate to a specific date, in which case such representations and warranties shall be true and correct as of such date), except for any de minimis inaccuracies, (iii) the representations and warranties of Sprint contained in Section 4.1(g)(iii) shall be true and correct as of the Closing Date as though made on the Closing Date, (iv) the representations and warranties of Sprint contained in this Agreement (other than those contained in the sections set forth in the preceding clauses (i), (ii) and (iii)) (without giving effect to any limitation as to “materiality,” “Material Adverse Effect” or any provisions relating to preventing or materially delaying the consummation of any of the transactions contemplated hereby set forth therein) shall be true and correct as of the Closing Date as though made on the Closing Date (except to the extent such representations and warranties expressly relate to a specific date or the date of this Agreement, in which case such representations and warranties shall be true and correct as of such date), except where the failure to be so true and correct, individually or in the aggregate, does not have and would not reasonably be expected to have a Material Adverse Effect on Sprint, and (v) the representations and warranties of the SoftBank Parties contained in Section 4.3 (without giving effect to any limitation as to “materiality,” “Material Adverse Effect” or any provisions relating to preventing or materially delaying the

 

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consummation of any of the transactions contemplated hereby set forth therein) shall be true and correct in all material respects as of the Closing Date as though made on the Closing Date (except to the extent such representations and warranties expressly relate to a specific date or the date of this Agreement, in which case such representations and warranties shall be true and correct in all material respects as of such date); provided that the accuracy of the representations and warranties of the SoftBank US HoldCos shall only be a condition to the obligations of T-Mobile, Merger Sub, Merger Company and DT to effect the SoftBank US Mergers.

 

(b)                                 Performance of Obligations.  Each of Sprint and the SoftBank Parties shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Closing Date.

 

(c)                                  Officer’s Certificate.  T-Mobile shall have received an officer’s certificate duly executed by the Chief Executive Officer or the Chief Financial Officer of Sprint to the effect that the conditions set forth in Section 7.2(a) and Section 7.2(b) have been satisfied.

 

(d)                                 Other Agreements.  SoftBank shall have duly executed and delivered (i) the Stockholders’ Agreement and (ii) the Voting and Proxy Agreement.

 

(e)                                  Tax Opinion.  Subject to the last sentence of Section 1.1, T-Mobile shall have received a written opinion of its Specified Counsel, in form and substance reasonably satisfactory to T-Mobile, dated as of the Closing Date, to the effect that, on the basis of facts, representations and assumptions set forth or referred to in such opinion, each of the SoftBank US Mergers will qualify as a “reorganization” within the meaning of Section 368(a) of the Code.  In rendering such opinion, T-Mobile’s Specified Counsel shall be entitled to receive and rely upon representations and covenants contained in certificates of Starburst, Galaxy and T-Mobile substantially in the form of Exhibits A, B and C to the T-Mobile Disclosure Letter (the “Tax Certificates”).

 

[dkyeager]

1 hour ago, dro1984 said:

I believe that "if" the merger is approved, I don't see much divestiture.  What do either company really have to give up?   I think if there is, it will be somewhat minimal.    To force Sprint to give up any 2.5G, would kinda kill the whole point of the merger.   To get rid of any low band, like Sprint's 800 or T Mob's 600/700mhz would also hurt for the same reasons. Perhaps the only part I can see is giving up the 800 band that Sprint has.   I think T Mobile has enough 600 to more than make up for it.     Just my thoughts. 

It all depends on what the FCC spectrum screen is defined as for this merger.  Now that AT&T and Verizon have 5G operating, that should actually help this merger.  Iirc, the FCC has tended to treat all spectrum as equal.  Whether 600Mhz is worth more than 39GHz on a technical basis really depends on what you want to do.  Economically you could always look at auction sales (often quite old) or private transactions (very thin market) to come up with an economic value.  The messiness in this process is likely why it is typically treated as equal.  Spectrum divestitures are done on a county by county basis looking at the spectrum screen and must typically be done within a year.

If I were T-Mobile, I would try to get that timeline pushed out to three years, as the divesting spectrum could be used as a 5G transition bridge.