Official Tmobile-Sprint merger discussion thread

[greenbastard]

On 5/8/2019 at 12:28 PM, newyork4me said:

This is the vantage point of someone who knows nothing about business.

Tesla also had a massive "debt bomb" this past quarter.  They paid it off and did a new debt issuance.  Happens.  All.  The.  Time.

Tesla isn't Sprint though.

[greenbastard]

On 5/8/2019 at 12:34 PM, newyork4me said:

They shouldn't.  They should spend the $5 billion in the top 50 markets over the next year.  The following year they should probably split--$2.5 for rural and another $2.5 billion for the major metros.

The money is in urban areas. 

That's not a solution. In this industry, you can't just spend one year and hope that's good enough for the next few years. That's not how this works.

Doing what you're suggesting is the exact reason why Sprint is in the hole they are in to begin with. After NV 1.0, they left a lot of sites untouched in major urban areas and congestion crept up to them. B41 is great, but due to its coverage limitations Sprint needed to densify it's network. 

They didn't. And it bit them in the butt. You need consistent CAPEX in order to compete and gain customers (and keept those customers).

[newyork4me]

6 hours ago, greenbastard said:

That's not a solution. In this industry, you can't just spend one year and hope that's good enough for the next few years. That's not how this works.

Doing what you're suggesting is the exact reason why Sprint is in the hole they are in to begin with. After NV 1.0, they left a lot of sites untouched in major urban areas and congestion crept up to them. B41 is great, but due to its coverage limitations Sprint needed to densify it's network. 

They didn't. And it bit them in the butt. You need consistent CAPEX in order to compete and gain customers (and keept those customers).

If you read what I wrote, it's literally the opposite of what your response tries to make it seem.

I said they need to spend all their CapEx the next year in urban areas only and then at least half of it dedicated to urban areas going forward.  NV 1.0 was exactly the wrong play, because it haphazardly spent resources (many times in rural areas that had no compelling reason).

Please don't create strawman interpretations of what I said.

[Tengen31]

That's not a solution. In this industry, you can't just spend one year and hope that's good enough for the next few years. That's not how this works. Doing what you're suggesting is the exact reason why Sprint is in the hole they are in to begin with. After NV 1.0, they left a lot of sites untouched in major urban areas and congestion crept up to them. B41 is great, but due to its coverage limitations Sprint needed to densify it's network. 

They didn't. And it bit them in the butt. You need consistent CAPEX in order to compete and gain customers (and keept those customers).

 

Accept B41 becomes low band for 5G. Likely thanks to massive mimo. Sprint has densifyed the network in some areas . The only issue is small cells limited to 2xca or no ca. I've seen small cells from att and others that support 4xca. Some with B2+3x46.  

Sent from my SM-G965U1 using Tapatalk

 

 

 

 

 

[Brad The Beast]

24 minutes ago, Tengen31 said:

The only issue is small cells limited to 2xca or no ca.

Lack of decent low-band and enough low-band is also an issue. 

[Brad The Beast]

22 hours ago, S4GRU said:

And if you play your cards right and growth starts to occur after a few years of doing that, then they can make an exurban/rural move with major highway expansions. 

I've been seeing some articles saying that Sprint 5G should be better than AT&T and Verizon. If the 5G rollout goes well and they get positive media reactions, I think that will help immensely. 

 

[Brad The Beast]

On 5/9/2019 at 10:12 PM, Mr.Nuke said:

Sorry for being late to this and some of this is repeating New York.

They have $7 billion in cash and just under $10 billion in liquid assets.

I guess I read that differently than you do. From the investor update presentation they've basically got enough liquidity to pay off their debt for the next two years if they do nothing at all. What will happen is what has happened for years. You'll likely see Sprint offer new notes at some point this year that will replace the debt or expand it further.

He isn't talking about a "massive restructuring of their debt" at all. He is talking about what Sprint has done in the past and will continue to do going forward. Sprint has roughly $4.3 billion in debt due this fiscal year. If they issue $4.3 billion in new debt ceteris paribus their debt and liquidity positions haven't changed.

They aren't refinancing $40 billion in debt. As maturing debt is retired they are issuing new debt. The next 3 years that is $4 to $5 billion a year at a time.

Presumably indefinitely as long as someone is willing to lend to them (which there is a finite point somewhere there), but especially in the current economic conditions Sprint didn't have any trouble getting money last year and actually up-sized an offering due to favorable interest. The Free Cash Flow thing is a little weird. As a customer, I'd prefer Sprint invests in their network, something they did up about 50% year-over-year. That spending is going to drive Free Cash Flow down. If they had spent about $1 billion less in Capex they would've been free cash flow positive, which again is meaningless to me as a customer. It also isn't a really compelling failing firm argument, which is part of the reason they're having trouble convincing the DOJ of their arguement here. T-Mobile hasn't been FCF positive* since 2015.

 

*using Cash from operations less capital expenditures

Very well written sir! 

[red_dog007]

On 5/10/2019 at 5:18 AM, S4GRU said:

Focus on urban markets first, then suburban and secondary markets. 

And if you play your cards right and growth starts to occur after a few years of doing that, then they can make an exurban/rural move with major highway expansions.  But Sprint cannot put the cart before the horse again this time.  This is a much smarter plan.

And why you don't spend billions of low-band.  If Sprint participated, it would have increased the prices.  When/If Sprint focuses on rural, or wants extra urban low-band capcity, there is still extra low-band to be had.

On 5/10/2019 at 5:18 AM, S4GRU said:

We all want Sprint to be the hard charging Number Four carrier that quickly surpasses the others to become #1 or #2.  But also, there are ways to be a successful company and stay #4 forever.  If Sprint cannot merge, it is still completely viable to run on its own.  But it will be a long process to gain more customers or move up the rung.  And I think most of us believe the network experience will be the best way to do that.  And Sprint needs to start with the highest concentrations of customers first, to get the most bang for its buck.

I personally don't mind if they stay #4.  This idea that they can't be, or survive on their own as #4 I believe is a fallacy. 

The only thing I'd be concerned with, in regards to revenue, is them deploying more and more equipment (like the tens of thousands of small cells).  If they have to support more infrastructure with the same revenues, that will only become more costly.  They have to think of ways and make successful deals that help keep costs low.  I think 2.5GHz will go a long ways in helping keep costs low.  Their position puts them in such a way they can only get so much revenue out of 55million customers.

 

Edited May 11, 2019 by red_dog007

[bigsnake49]

2 hours ago, red_dog007 said:

 

The only thing I'd be concerned with, in regards to revenue, is them deploying more and more equipment (like the tens of thousands of small cells).  If they have to support more infrastructure with the same revenues, that will only become more costly.  They have to think of ways and make successful deals that help keep costs low.  I think 2.5GHz will go a long ways in helping keep costs low.  Their position puts them in such a way they can only get so much revenue out of 55million customers.

 

Well that why us merger proponents are supporting the merger, scale! Capex is split among twice the number of customers and becomes a smaller percentage of your expenses. Plus operationally the T-Mobile team is light years ahead of Sprint's, although the new CEO seems to know what he's doing. Short of a merger, I'd want them to merge network operations and have T-Mobile and Sprint being marketing operations.You get the network scale without a full merger.

[greenbastard]

15 hours ago, newyork4me said:

I said they need to spend all their CapEx the next year in urban areas only and then at least half of it dedicated to urban areas going forward.

Like I said, that's not how the wireless industry works. Most spending already happens in urban areas. To suggest that half of Sprint's CAPEX should go towards rural areas for one year is a terrible strategy.

[greenbastard]

15 hours ago, Tengen31 said:

Accept B41 becomes low band for 5G. Likely thanks to massive mimo.

They would still need to densify with new macro towers to fill gaps. Small cells aren't going to cut it 

Sprint has densifyed the network in some areas .

I have not seen Sprint add a macro tower since pre-NV days in Texas. Small cells are no good for filling gaps due to their limited range and indoor usability. Small cells are only good for fighting congestion in small shopping centers, schools, or apartments. 

[newyork4me]

1 hour ago, greenbastard said:

Like I said, that's not how the wireless industry works. Most spending already happens in urban areas. To suggest that half of Sprint's CAPEX should go towards rural areas for one year is a terrible strategy.

Dear goodness, please stop misrepresenting what I said.  For real.

I said half should go to urban areas, after another full year of urban-only spending.  Nowhere did I say the other half should go to rural areas.  Nowhere.  In fact, I said that was the flaw of Network Vision.  There's urban, suburban, exurban, and rural areas.  Neither of the latter two were in my mind for the other half of the spending, two years out from now.

This, by the way, is the exact strategy T-Mobile used in 2013-2015, and it worked very well for them.  Sprint, in fact, has an advantage they did not going into it--they already have low-band in the metro areas, and they have a large swath of beachfront spectrum for 5G with technology to make it far more useful than it has ever been (beam forming, etc.)

[greenbastard]

11 hours ago, newyork4me said:

I said half should go to urban areas, after another full year of urban-only spending.  Nowhere did I say the other half should go to rural areas.  Nowhere.  

https://s4gru.com/?app=core&module=system&controller=content&do=find&content_class=forums_Topic&content_id=7845&content_commentid=542352

Quote

They shouldn't.  They should spend the $5 billion in the top 50 markets over the next year.  The following year they should probably split--$2.5 for rural and another $2.5 billion for the major metros.

You should be a bit more articulate and consistent in your discourse.

Edited May 12, 2019 by greenbastard

[red_dog007]

21 hours ago, bigsnake49 said:

Well that why us merger proponents are supporting the merger, scale! Capex is split among twice the number of customers and becomes a smaller percentage of your expenses. Plus operationally the T-Mobile team is light years ahead of Sprint's, although the new CEO seems to know what he's doing. Short of a merger, I'd want them to merge network operations and have T-Mobile and Sprint being marketing operations.You get the network scale without a full merger.

The problem here is New-TMobile will get to charge whatever they want.  TMobile and Sprint have been able to do what they have on limited capex. There will be less need to be resourceful, innovative, offer more for less. 

Sure there is a verbal "promise".  Even if the Feds make this verbal promise a binding physical contract, that will expire. Look at the Charter/TWC/BH merger.  Feds limited Charter from doing data caps for 8yrs.  Guess the first thing they will do once those 8yrs are up.  Add data caps and data overages. After the merger, the first thing New-TMobile will do as soon as soon as any contract is up (even if they bother to honor a verbal contract) is raise prices.  It always happens and this will be no different.  A New-TMobile could easily charge more than VZW/ATT and still be fine even if they stop attracting customers the shareholders will love the increased rates and the stock will still go up.

I'd rather have two companies that have some constraints vs three that can get away with whatever they want.

[ase500]

10 hours ago, red_dog007 said:

The problem here is New-TMobile will get to charge whatever they want.  TMobile and Sprint have been able to do what they have on limited capex. There will be less need to be resourceful, innovative, offer more for less. 

Sure there is a verbal "promise".  Even if the Feds make this verbal promise a binding physical contract, that will expire. Look at the Charter/TWC/BH merger.  Feds limited Charter from doing data caps for 8yrs.  Guess the first thing they will do once those 8yrs are up.  Add data caps and data overages. After the merger, the first thing New-TMobile will do as soon as soon as any contract is up (even if they bother to honor a verbal contract) is raise prices.  It always happens and this will be no different.  A New-TMobile could easily charge more than VZW/ATT and still be fine even if they stop attracting customers the shareholders will love the increased rates and the stock will still go up.

I'd rather have two companies that have some constraints vs three that can get away with whatever they 

 You're not understanding the convergence happening in several markets. The merger is about 5g or more generally about data. Cable companies are moving toward being data companies not video content companies. This means that wireless companies will not only be competing for mobile users but also for fixed data connections. For many rural communities fiber optic connections are just to costly and companies simply will not invest in bringing broadband to these communities. 5g is about connecting these communities not about faster data to your phone. Without a merger Tmobile will not have the spectrum and Sprint will not have the cash. Those rural communities will be split up by At&t and Verizon giving people very little choice and we will see prices rise. The reality is without a proper third player prices will rise. If the merger fails, Tmobile will never be able to compete in fixed wireless effectively. Sprint is in a better position if investment is made but that would require either Softbank buying up the remaining stock and spending heavily or a different merger. Charter is the best match but, would be unlikely to invest heavily in the network. They would be more likely to use Sprint for Sprint link and to complement existing services, not expansion.

[red_dog007]

48 minutes ago, ase500 said:

What a load. You're not understanding the convergence happening in several markets. The merger is about 5g or more generally about data. Cable companies are moving toward being data companies not video content companies. This means that wireless companies will not only be competing for mobile users but also for fixed data connections. For many rural communities fiber optic connections are just to costly and companies simply will not invest in bringing broadband to these communities. 5g is about connecting these communities not about faster data to your phone. Without a merger Tmobile will not have the spectrum and Sprint will not have the cash. Those rural communities will be split up by At&t and Verizon giving people very little choice and we will see prices rise. The reality is without a proper third player prices will rise. If the merger fails, Tmobile will never be able to compete in fixed wireless effectively. Sprint is in a better position if investment is made but that would require either Softbank buying up the remaining stock and spending heavily or a different merger. Charter is the best match but, would be unlikely to invest heavily in the network. They would be more likely to use Sprint for Sprint link and to complement existing services, not expansion.

This is a load.  5G is not about servicing rural communities.  LTE has been able to do this forever.  TMobile does not need Sprint and their spectrum to do this.  TMobile is as spectrum constrained as VZW.  They can compete better because VZW fixed-wireless plans suck. 

TMobile could start doing full rural buildouts. They could use 5GHz like WISPs use all the time.  There is loads of 2.5GHz left in rural markets that TMobile could have and still can be buying/leasing up. 

[ase500]

LTE can not supply broadband for large geographic areas. The air link is SHARED bandwidth. Furthermore Tmobile does need Sprint. 5ghz would require tighter tower spacing and is massively over used. Most WISPs have used WIFI standards and most of them have BANKRUPTED. I have worked for a WISP and it is no way a workable solution. Do you honestly think that MM wave is about mobile applications? Do you really think MASSIVE MIMO is about mobile? 5G is absolutely about last mile broadband. The fact is that both Verizon and At&t are launching their 5g services with HOME internet connections. Qualcomm even touts their 5G technology as the way to connect rural customers, in their white papers. The mobile market is at its saturation point. There is no more growth to be had. All 4 are just stealing customers back and forth. If it wasn't about fixed wireless none of these companies would be investing, it would not make any financial sense. Who isn't happy with 50-100 mbps on their phone? Would people be willing to shoulder the billions of dollars on their phone bills? Where did you think the money for new spectrum and hundreds of thousands of new and upgraded towers was going to come from? The reality is 5G is about growth opportunities for these companies, Tmobile does not have the spectrum to compete and Sprint doesn't have the money. With the two combined, they make the only company that can create a network that can keep the costs down and provide excellent service. The big two are going to hit the same wall that wireline companies have hit in rural deployment. This will leave 5G in metropolitan areas where it is needed the least. Without a merger it is highly likely both will shrink and possibly bankrupt.

[dkyeager]

 

7 hours ago, red_dog007 said:

This is a load.

 

58 minutes ago, ase500 said:

Omg. There is so much wrong here.

Both of these quotes should be removed from the comments. We should all be civil towards each other.  No one is 100% right.

My comments will be deleted if this is done.

[ase500]

4 minutes ago, dkyeager said:

 

 

Both of these quotes should be removed from the comments. We should all be civil towards each other.  No one is 100% right.

My comments will be deleted if this is done.

How is this not civil? I in no way attack or belittled. I reacted and responded....

[dkyeager]

5G will help in rural areas at the edge for cells for it should double existing bandwidth, ie 4Mbps comes 8Mbps.  But does it just give 18 months of breathing room, since data usage appears to be doubling every 18 months?

5G is currently be touted for dramatically reduced latency, which should help with virtual reality, self-driving cars, etc.  How far does it get to this goal?  We will have to see.

While there is unused 2.5 spectrum that is in the hands of spectrum hoarders and WISPs, there are vast rural areas where all 2.5 is in use and there is only enough for 20+20+15.  The FCC is trying to establish new rules to get this remaining spectrum in use.  This is likely waiting until after a merger decision.

[ase500]

4 minutes ago, dkyeager said:

5G will help in rural areas at the edge for cells for it should double existing bandwidth, ie 4Mbps comes 8Mbps.  But does it just give 18 months of breathing room, since data usage appears to be doubling every 18 months?

And this is why Tmobile is in trouble without Sprint. Tmobile 600mhz 5G will peak at 100mpbs and mm wave development is not practical for rural deployment. So Tmobile would be deploying 5G at roughly the same speeds as LTE and ten times slower than cable. This leaves them needing to compete on ONLY price. In turn they hemorrhage cash.

[bigsnake49]

On 5/10/2019 at 11:07 PM, newyork4me said:

If you read what I wrote, it's literally the opposite of what your response tries to make it seem.

I said they need to spend all their CapEx the next year in urban areas only and then at least half of it dedicated to urban areas going forward.  NV 1.0 was exactly the wrong play, because it haphazardly spent resources (many times in rural areas that had no compelling reason).

Please don't create strawman interpretations of what I said.

Both of you need to stop going to the two extremes. Take out NY, downtown Chicago and maybe downtown SF, let's say 30 Million people, take out another 30Million for rural areas (maybe a little generous) and what do you have left? 270 million people that live in suburbs. Those are the people that you have to worry about covering. Verizon and AT&T have about 85,000 sites to cover everybody, T-Mobile 65,000 and Sprint 45,000. That number for Sprint has not changed since probably 2010 to 2012. Yes small cells might help but you will not be able to make up for 20,000 or 40,000 macro sites with small cells. 

[newyork4me]

1 hour ago, bigsnake49 said:

Both of you need to stop going to the two extremes. Take out NY, downtown Chicago and maybe downtown SF, let's say 30 Million people, take out another 30Million for rural areas (maybe a little generous) and what do you have left? 270 million people that live in suburbs. Those are the people that you have to worry about covering. Verizon and AT&T have about 85,000 sites to cover everybody, T-Mobile 65,000 and Sprint 45,000. That number for Sprint has not changed since probably 2010 to 2012. Yes small cells might help but you will not be able to make up for 20,000 or 40,000 macro sites with small cells. 

I think it's been reported that Sprint has more than that now, but yes, you often will make up for it with small cells.  Many of T-Mobile's cites are rooftop urban sites for density...that's all addressed by small cells.

Take Los Angeles...Sprint does not need more macros.  They can use small cells to make up for all of their remaining deficiencies...hek, it's rare to get a macro above 45ft in height these days anyway.  Instead, small cells are suitable to covering the canyons (more so than macros) and are better at spot coverage/capacity in certain neighborhoods (based on zoning issues).

4 million people live in Los Angeles City limits.  There's no reason Sprint cannot provide the best network for every single one of those people.  That's where Sprint has the true potential.  Major metros.  (And NY matters...they have 18 million folks in that metro area, and 19,000 small cells with Altice... Chicago has the density and good suburban network inherited from US Cellular).

Targeting just a few key metro areas and having the best network will pull in subscribers.  It's a strategy that has worked over and over.  Not everyone wants the VZW coverage map at VZW prices and VZW congestion.  Unlimited 4K streaming on Sprint 5G on the best urban network...that's a compelling value proposition.

[Tengen31]

I think it's been reported that Sprint has more than that now, but yes, you often will make up for it with small cells.  Many of T-Mobile's cites are rooftop urban sites for density...that's all addressed by small cells.
Take Los Angeles...Sprint does not need more macros.  They can use small cells to make up for all of their remaining deficiencies...hek, it's rare to get a macro above 45ft in height these days anyway.  Instead, small cells are suitable to covering the canyons (more so than macros) and are better at spot coverage/capacity in certain neighborhoods (based on zoning issues).
4 million people live in Los Angeles City limits.  There's no reason Sprint cannot provide the best network for every single one of those people.  That's where Sprint has the true potential.

The problem with Sprint small cells is everyone one of them I'm connected to didn't have any carrier aggregation which isn't much capacity so they have been Slow. Everyone else's small cells have had 3-4 times on it

Sent from my SM-G965U1 using Tapatalk

[bigsnake49]

17 minutes ago, newyork4me said:

I think it's been reported that Sprint has more than that now, but yes, you often will make up for it with small cells.  Many of T-Mobile's cites are rooftop urban sites for density...that's all addressed by small cells.

Take Los Angeles...Sprint does not need more macros.  They can use small cells to make up for all of their remaining deficiencies...hek, it's rare to get a macro above 45ft in height these days anyway.  Instead, small cells are suitable to covering the canyons (more so than macros) and are better at spot coverage/capacity in certain neighborhoods (based on zoning issues).

4 million people live in Los Angeles City limits.  There's no reason Sprint cannot provide the best network for every single one of those people.  That's where Sprint has the true potential.  Major metros.  (And NY matters...they have 18 million folks in that metro area, and 19,000 small cells with Altice... Chicago has the density and good suburban network inherited from US Cellular).

Targeting just a few key metro areas and having the best network will pull in subscribers.  It's a strategy that has worked over and over.  Not everyone wants the VZW coverage map at VZW prices and VZW congestion.  Unlimited 4K streaming on Sprint 5G on the best urban network...that's a compelling value proposition.

Sprint is so far behind in Los Angeles, it's not even funny. I doubt they have more than 10% market share and than probably all prepaid. And yes, everybody. is using tall buildings' rooftops nowadays.

Edited May 13, 2019 by bigsnake49