Official Tmobile-Sprint merger discussion thread

[Tengen31]

This could be a positive for the merger, gonna be down to possibly 3 carriers anyway.

Let's say for a sec it fails ( I don't doubt it will) and Sprint does go out of business what happens to their 56 million customers?

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[BlueAngel]

10 minutes ago, Tengen31 said:

Let's say for a sec it fails ( I don't doubt it will) and Sprint does go out of business what happens to their 56 million customers?

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No idea but this is a good point I'm just gonna hope the merger goes through.

[jroepcke51]

1 hour ago, Tengen31 said:

Let's say for a sec it fails ( I don't doubt it will) and Sprint does go out of business what happens to their 56 million customers?

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Honestly depends on how they file bankruptcy.

Option 1 smaller carrier purchases it  

Option 2 customers will be divested in markets to potential buyers to pay debt.  I say this as DOJ antitrust or FCC says no, Tmo would still be able to buy assets and or customers but only in certain markets. 

I could also see the spectrum is sold 

 

Who knows really. 

[tommym65]

6 minutes ago, jroepcke51 said:

Honestly depends on how they file bankruptcy.

Option 1 smaller carrier purchases it  

Option 2 customers will be divested in markets to potential buyers to pay debt.  I say this as DOJ antitrust or FCC says no, Tmo would still be able to buy assets and or customers but only in certain markets. 

I could also see the spectrum is sold 

Who knows really. 

Option 3:  Unrelated business purchases it (Dish, cable operator, Warren Buffet, General Motors, McDonald's, ???).

[Tengen31]

Option 3:  Unrelated business purchases it (Dish, cable operator, Warren Buffet, General Motors, McDonald's, ???).

I really hope for TMobile then. I have no problem moving over to them

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[dkyeager]

7 hours ago, Tengen31 said:

Let's say for a sec it fails ( I don't doubt it will) and Sprint does go out of business what happens to their 56 million customers?

Historical the FCC would ask Verizon or AT&T to take over the Spectrum, Customers, and assets. LOL

[Tengen31]

Historical the FCC would ask Verizon or AT&T to take over the Spectrum, Customers, and assets. LOL

OMG no

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[dro1984]

How does  the FCC have any  "Historical" experiences of doing this?    I don't personally remember any cellular companies going out of business that they would have done this?     

The FCC has split some customers off due to other mergers / buyouts before, but not in great numbers or from any "major" carrier as memory serves me.    

[RedSpark]

https://www.lightreading.com/business-employment/customer-experience/if-sprint-t-mobile-divest-customers-in-a-merger-they-could-call-america-movil/d/d-id/751153?

Interesting....

[Tengen31]

https://www.lightreading.com/business-employment/customer-experience/if-sprint-t-mobile-divest-customers-in-a-merger-they-could-call-america-movil/d/d-id/751153?
Interesting....

If they devest boost what does that mean for people using Boost?

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[belusnecropolis]

Just received an email from Calyx Institute. They ride on the EBS lease resellers agreement. Looks like they are asking for legislation to expand or extend the original lease agreement style of giving to publicish entities over auctioning the rest of the available EBS leases.

"Dear Member,

The Calyx Institute relies on the Educational Broadband Service (EBS) spectrum to provide unlimited wireless internet to members like you. However, after nearly 20 years of taking no action to expand EBS availibility, the Federal Communications Commisison is discussing how to license the rest of EBS.

Can you ask Congress to preserve the education requirement for EBS licenses?

We've heard from many of you that our wireless membership benefit program has been crucial to keeping you online and connected to the Internet. We're working with our friends and partners at Voqal to ensure that EBS is used to help even more communities, families, and individuals are connected for decades to come.

*Your current internet service is not at risk.* This is about expanding EBS availability to other parts of the country where it has been unavailable since the middle of the 1990s.

Please reach out to your member of Congress through this link to ensure that this public resource services its highest and best use – connecting students, families and communities that would otherwise lack internet access. You can help by telling the FCC and your Congressional representatives to Save EBS here.
 

Thanks!

Nicholas Merrill, Executive Director

The Calyx Institute

[dro1984]

How much EBS Spectrum is left to give out or auction?

[belusnecropolis]

41 minutes ago, dro1984 said:

How much EBS Spectrum is left to give out or auction?

According to Mr. Nick about 50% of the nation and 15% of the population.

[kct1975]

Historical the FCC would ask Verizon or AT&T to take over the Spectrum, Customers, and assets. LOL

OMG no

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How does  the FCC have any  "Historical" experiences of doing this?    I don't personally remember any cellular companies going out of business that they would have done this?     
The FCC has split some customers off due to other mergers / buyouts before, but not in great numbers or from any "major" carrier as memory serves me.    

Back when I got my First Cellphone...an Audiovox...I was with Worldcom Wireless.

As you all know...Worldcom Wireless went Bankrupt after a much publicized scandal.

When Worldcom Wireless went out of business, I get a letter in the mail [emoji394] that informed me that my contract will Worldcom had been converted to a contract with AT&T.

I immediately contacted AT&T, and requested to be released from the contact, which I had a right to do within the 30 days after my contact had been assumed by AT&T.

Not that I personally had anything against AT&T, it was just that I wanted the opportunity to shop around for the best price and best contract that fit my needs.

Here is a CNN article from 2002 that explains the situation...

http:// https://money.cnn.com/2002/07/29/pf/saving/q_wireless/index.htm

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[IrwinshereAgain]

The Att and TMobile merger would have left us with 2 large carriers and an underfunded Sprint. The Sprint and T-Mobile merger could provide a third strong competitive carrier.  That seems like the difference to me.  Is there another way to look at it?

[Tengen31]

The Att and TMobile merger would have left us with 2 large carriers and an underfunded Sprint. The Sprint and T-Mobile merger could provide a third strong competitive carrier.  That seems like the difference to me.  Is there another way to look at it?

Nope you're 100% right [emoji4]

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[newyork4me]

On 5/4/2019 at 10:39 AM, IrwinshereAgain said:

The Att and TMobile merger would have left us with 2 large carriers and an underfunded Sprint. The Sprint and T-Mobile merger could provide a third strong competitive carrier.  That seems like the difference to me.  Is there another way to look at it?

Yes, the other way to look at it is that for the first time in over a decade, Sprint actually has what is required to become a strong, viable competitor in all the large metro areas.  Removing that as a competitor will ultimately result in higher prices.

Think about it this way:  Sprint is about to turn on 5G NR 64MIMO in spectrum sharing B41 in over 1,000 sq miles.  That's huge for delivering an amazing network experience.  Consider that MetroPCS was able to build to 1.6 million subscribers in Los Angeles and a million subscribers in New York City and Miami, etc.  They had a tiny, terrible, and slow network in those areas but competed on price.

There are A LOT of customers that don't travel much from home.  Sprint can cover them VERY well and is becoming the gold standard for network in those areas.  They still have a mediocre network elsewhere on top of that...it's a super compelling value proposition.  They should be able to eat a lot of other carriers for lunch in those metro areas--especially T-Mobile/Metro.  That keeps price pressure on T-Mobile and the other providers.

[bigsnake49]

3 hours ago, newyork4me said:

Yes, the other way to look at it is that for the first time in over a decade, Sprint actually has what is required to become a strong, viable competitor in all the large metro areas.  Removing that as a competitor will ultimately result in higher prices.

Think about it this way:  Sprint is about to turn on 5G NR 64MIMO in spectrum sharing B41 in over 1,000 sq miles.  That's huge for delivering an amazing network experience.  Consider that MetroPCS was able to build to 1.6 million subscribers in Los Angeles and a million subscribers in New York City and Miami, etc.  They had a tiny, terrible, and slow network in those areas but competed on price.

There are A LOT of customers that don't travel much from home.  Sprint can cover them VERY well and is becoming the gold standard for network in those areas.  They still have a mediocre network elsewhere on top of that...it's a super compelling value proposition.  They should be able to eat a lot of other carriers for lunch in those metro areas--especially T-Mobile/Metro.  That keeps price pressure on T-Mobile and the other providers.

Great but they will lack the Capex to innovate. Metro was able to do it because they targeted a lower income demographic and covered those cities using DAS. Sprint can't. Can they survive? Yes. Thrive no. How much money is Sprint making on my $15/month unlimited BYOD plan? How much out of that can they devote to Capex? 

Edited May 6, 2019 by bigsnake49

[tommym65]

1 hour ago, bigsnake49 said:

Great but they will lack the Capex to innovate. Metro was able to do it because they targeted a lower income demographic and covered those cities using DAS. Sprint can't. Can they survive? Yes. Thrive no. How much money is Sprint making on my $15/month unlimited BYOD plan? How much out of that can they devote to Capex? 

What he said ^^^.  Sprint lacks the capex.  Sprint also lacks the financial support from Softbank.  For the past several years, Sprint has lacked the leadership, primarily because Claure was obviously brought in to cut the company to the core in preparation for a sale or merger.  Sprint lacks the brand image, and the probable hit-and-miss effort Sprint will be able to mount to implement 5G will not improve that:  It will almost certainly be too little, too late.  Sprint lacks the ability to continue to meet its debt service requirements and meaningfully expand coverage or service, because the debt service is simply going to eat away at future capex.

In sum, Sprint simply lacks the resources to compete as an equal with ATT, Verizon, and the still-growing T-Mobile.

Let's be totally real:  Within a very short period of time (1 year? 2 years? Less?), Sprint as we know it will no longer exist.  Either the merger will be approved, or Sprint will enter Chapter 11 and be totally reorganized, or some 3rd party outside of the telecom industry will purchase the company in a fire-sale and change it drastically.  But the Sprint we know today is doomed.  That saddens me, because I have been a Sprint customer for over 20 years, and a combination of stupid moves by the Board of Directors, muddy objectives and execution on the part of Masa Son and Softbank, and a cutthroat competitive environment have forced a future that is very bleak.

[newyork4me]

1 hour ago, bigsnake49 said:

Great but they will lack the Capex to innovate. Metro was able to do it because they targeted a lower income demographic and covered those cities using DAS. Sprint can't. Can they survive? Yes. Thrive no. How much money is Sprint making on my $15/month unlimited BYOD plan? How much out of that can they devote to Capex? 

No they don't.  Sprint generated $7.582 billion NET cash flow from operating activities in 3Q18 YTD.  That gives them substantial room for investing activities (CapEx).

That's Sprint's problem.  They should have a $40/mo unlimited basic single line plan and a $50/mo unlimited plan with HD video.  No activation fee.  They'll pull Metro subscribers over...and, remember, it doesn't take much CapEx to focus most heavily on metro city centers.

The $15/mo unlimited BYOD is still making them money though, as long as you don't call into care a lot.  Their marginal cost is about $0 for providing that line...it's permanently de-prioritized, so it is just offering excess network capacity that they are monetizing. 

[bigsnake49]

14 hours ago, newyork4me said:

No they don't.  Sprint generated $7.582 billion NET cash flow from operating activities in 3Q18 YTD.  That gives them substantial room for investing activities (CapEx).

That's Sprint's problem.  They should have a $40/mo unlimited basic single line plan and a $50/mo unlimited plan with HD video.  No activation fee.  They'll pull Metro subscribers over...and, remember, it doesn't take much CapEx to focus most heavily on metro city centers.

The $15/mo unlimited BYOD is still making them money though, as long as you don't call into care a lot.  Their marginal cost is about $0 for providing that line...it's permanently de-prioritized, so it is just offering excess network capacity that they are monetizing. 

From the 3rd Quarter 2018 report:

"Net loss of $141 million in the quarter compared to net income of $7.2 billion in the year-ago period, as the fiscal year 2017 third quarter results included a $7.1 billion non-cash benefit from tax reform."

[newyork4me]

2 hours ago, bigsnake49 said:

From the 3rd Quarter 2018 report:

"Net loss of $141 million in the quarter compared to net income of $7.2 billion in the year-ago period, as the fiscal year 2017 third quarter results included a $7.1 billion non-cash benefit from tax reform."

I don't have the time, energy, or desire to try to explain accounting, but net loss/income means literally nothing.  It's effectively made-up paper numbers, as it includes significantly large amounts of non-cash items.  They are recognizing substantial depreciation charges, which is a non-cash "expense" item that signifies absolutely no money leaving Sprint's control.  It's reflective of spending on capital assets they did a while ago.

Stating a net loss precludes them from having money to invest in CapEx is a bit like saying eating an apple in the morning means you can't send a text message that day.  They really aren't related.

[bigsnake49]

39 minutes ago, newyork4me said:

I don't have the time, energy, or desire to try to explain accounting, but net loss/income means literally nothing.  It's effectively made-up paper numbers, as it includes significantly large amounts of non-cash items.  They are recognizing substantial depreciation charges, which is a non-cash "expense" item that signifies absolutely no money leaving Sprint's control.  It's reflective of spending on capital assets they did a while ago.

Stating a net loss precludes them from having money to invest in CapEx is a bit like saying eating an apple in the morning means you can't send a text message that day.  They really aren't related.

I understand all of that. You brought up the $7.2B net. It is not a cash flow thing it is a non-cash item they had to recognize in their accounting. Since Sprint has not really made a profit in a little while, the tax credit will not result in any additional cash in Sprint's pockets until they do so. The number I look at is adjusted free cash flow which was -$908M, which is to be expected since they were spending money on the network. I expect a similar cashflow this quarter.

(Millions, except per share data)	Fiscal 3Q18	Fiscal 3Q17	Change
Net (loss) income	($141)	$7,162	($7,303)
Basic (loss) income per share	($0.03)	$1.79	($1.82)
Operating income	$479	$727	($248)
Adjusted EBITDA*	$3,101	$2,719	$382
Net cash provided by operating activities	$2,225	$2,683	($458)
Adjusted free cash flow*	($908)	$397	($1,305)

[bigsnake49]

4 hours ago, bigsnake49 said:

I understand all of that. You brought up the $7.2B net. It is not a cash flow thing it is a non-cash item they had to recognize in their accounting. Since Sprint has not really made a profit in a little while, the tax credit will not result in any additional cash in Sprint's pockets until they do so. The number I look at is adjusted free cash flow which was -$908M, which is to be expected since they were spending money on the network. I expect a similar cashflow this quarter.

(Millions, except per share data)	Fiscal 3Q18	Fiscal 3Q17	Change
Net (loss) income	($141)	$7,162	($7,303)
Basic (loss) income per share	($0.03)	$1.79	($1.82)
Operating income	$479	$727	($248)
Adjusted EBITDA*	$3,101	$2,719	$382
Net cash provided by operating activities	$2,225	$2,683	($458)
Adjusted free cash flow*	($908)	$397	($1,305)

And just on que, another lost of $539M in free adjusted cash flow.

[newyork4me]

20 hours ago, bigsnake49 said:

And just on que, another lost of $539M in free adjusted cash flow.

Did you read the reports and listen to the earnings call?

Sprint, while still trying to look like a failing firm to get the merger approved, acknowledged they would have been cash flow positive except for a non-recurring pressure from timing of investment decision.

Sprint also said that without the merger they will continue to invest in network CapEx at the same ~$5 billion/year rate they are on right now...which took them from 0 to 30,000 small cells and 0 to 1,500 MIMO deployment and 60-80% deployment of 2.5GHZ equipment.

Another year of that, and Sprint will look like a different carrier.  Oh, and Sprint management also said that if the merger does not go through, they will refocus their network efforts on major metro areas--which is exactly what I said their strategy should be and would be successful.  This management gets it.

Seriously, everyone should read their financials.  Sprint will do better than ever as a standalone company and force the other carriers to compete like a mofo--urban areas is and has always been what drives pricing pressure.