Softbank - New Sprint - Discussion

[Nickel]

Maybe T-Mobile is extremely smart, negotiate another awesome breakup fee and collect another billion in cash to build out their new A block spectrum once the merger faces too many regulatory hurdles to clear.

Not going to happen. Sprint can't afford to give a competitor an advantage like that.

[Deval]

Oh, you are nuts.  VZN would love the deal because they would target PCS and/or AWS.

 

Son is going to make an offer for T-Mobile purely for the subs and marketing.

 

I am sure Son sees the potential of Sprint+T-Mobile to offer the scale needed to take on VZN/AT&T and prevent a price war blowing up between S/TMUS - Win-Win for Son.

 

I don't think this is good for consumers because we'll be basically left with two choices - AT&T/VZN or Sprint.  Sprint will always be priced JUST below AT&T/VZN (which are priced right on top of each other).

 

That will become the status quo and the recent spat of price wars, plan innovations, etc will abruptly end.  So, VZN and AT&T will continue their 40+% margins and Sprint will be happy in 3rd place at 35% margins.

 

Bottom line, a merger would be a huge lose for consumers which makes me really wonder what they'll have to do to get the DOJ to approve it.

 

Maybe T-Mobile is extremely smart, negotiate another awesome breakup fee and collect another billion in cash to build out their new A block spectrum once the merger faces too many regulatory hurdles to clear.

 

I'm sure T-Mo's existing plan has NO future and will only increase the debt load. At the end of the day, they are targeting customers who are traditionally fickle and will jump ship if they don't get what is promised. In the sense of the urban customer base, that's what Boost Mobile is for. What's their strategy for years 2-5?

[irev210]

Not going to happen. Sprint can't afford to give a competitor an advantage like that.

 

For Son - it's a risk/reward scenario.  I suspect that they'll be confident they can get the deal done before moving forward - likely with some significant spectrum divests and other accommodations to the DOJ (similar to how US AIR and AA just gave away a bunch of gates at Dulles and LGA).

 

I'm sure T-Mo's existing plan has NO future and will only increase the debt load. At the end of the day, they are targeting customers who are traditionally fickle and will jump ship if they don't get what is promised. In the sense of the urban customer base, that's what Boost Mobile is for. What's their strategy for years 2-5?

 

Deval - what you are saying goes against what reality is.

 

Churn and margins are improving, not decreasing.  They're becoming a more valuable carrier with the actions they've taken.  This is likely causing Son to be ticked off, as it is jacking up the acquisition cost of T-Mobile.  Deutsche Telekom was just bragging about how T-Mobile is back to the level at which AT&T tried to acquire them.

 

Given the current market, I suspect Son is trying to move quickly in a rising rate environment combined with a company that is growing its enterprise value rather quickly.

[WiWavelength]

Not going to happen. Sprint can't afford to give a competitor an advantage like that.

 

Well, SoftBank would be paying any break up fee.

 

But I agree.  Past history does not guarantee future results.  Far too many magentans think that -- because of the failed AT&T-T-Mobile proceedings -- the FCC and/or DoJ will also block a potential Sprint-T-Mobile, and T-Mobile will snooker another big break up fee.  No, that was all due to AT&T hubris in believing that it could ramrod through approval of the merger.  The circumstances surrounding this proposed acquisition are very different.

 

AJ

[Deval]

Deval - what you are saying goes against what reality is.

 

Churn and margins are improving, not decreasing.  They're becoming a more valuable carrier with the actions they've taken.  This is likely causing Son to be ticked off, as it is jacking up the acquisition cost of T-Mobile.  Deutsche Telekom was just bragging about how T-Mobile is back to the level at which AT&T tried to acquire them.

 

Given the current market, I suspect Son is trying to move quickly in a rising rate environment combined with a company that is growing its enterprise value rather quickly.

 

I'm all for their changes, but I really want to see how it looks a year from now. In terms of finance, as their numbers speak for themselves.

[WiWavelength]

Churn and margins are improving, not decreasing.

 

I am still not buying it.  If T-Mobile persists, these cut rate strategies will come home to roost in due time.  A peak now will turn into a trough later, as people pile onto the T-Mobile network, then get a taste of its diminishing returns and coverage limitations.

 

If I am wrong, I give up -- I am done with this industry.  I will either drop all cellphone service or just blindly go along with the rest of the VZW, AT&T, and T-Mobile cattle.

 

AJ

[irev210]

I am still not buying it.  If T-Mobile persists, these cut rate strategies will come home to roost in due time.  A peak now will turn into a trough later, as people pile onto the T-Mobile network, then get a taste of its diminishing returns and coverage limitations.

 

If I am wrong, I give up -- I am done with this industry.  I will either drop all cellphone service or just blindly go along with the rest of the VZW, AT&T, and T-Mobile cattle.

 

AJ

 

 

That is one of the more interesting questions that only time will answer.  I am sure we are not the only ones wondering if T-Mobile's churn is going to escalate when they are xfering subs from substantially larger carriers with substantially larger coverage footprints - TBD one that.

 

In the meantime, relavent to Softbank/Sprint - it definitely changes the valuation of T-Mobile today, impacting what Son will offer.  That's how this all comes together.

 

Son, at that point, can do what he did in Japan - KDDI and NTT vs. Softbank  or in the USA AT&T and VZN vs. SprintSon

[bigsnake49]

You know Nextel employed the same strategy before getting acquired by Sprint. It's called pump and dump. They pumped their rolls with Boost people, knowing full well they could not accomodate them all in their network, falied to deploy the infamous 6:1 codec widely, etc, etc. I firmly believe that is exactly what's happening right now. They want to be bought out and they are pumping their value up.

[JeffDTD]

I remain very excited by Son and his legacy of success. Whether he gets Tmo or not, hes has zero love or responsibility towards the sprint of old that would influence future decisions. Im going to go ahead and predict that we get either a NEW LOGO and branding or a NEW NAME altogether by 2015 regardless of mergers or acquisitions.

 

Sent from my SM-N900V using Tapatalk

 

 

[Rawvega]

You know Nextel employed the same strategy before getting acquired by Sprint. It's called pump and dump. They pumped their rolls with Boost people, knowing full well they could not accomodate them all in their network, falied to deploy the infamous 6:1 codec widely, etc, etc. I firmly believe that is exactly what's happening right now. They want to be bought out and they are pumping their value up.

 

And Bingo was his name...

 

Edit:

 

As an aside, I was reading Verizon's earnings call transcript and Fran Shammo pretty much summed up what I've been thinking since the start of this uncarrier stuff.

 

http://seekingalpha.com/article/1957221-verizon-communications-management-discusses-q4-2013-results-earnings-call-transcript

 

 

First off, let me just reiterate the fact that I know there has been a lot of questions around a price war and if you really look at what’s going on really what’s the shift of pricing is between service and equipment and really when you do the math, there really isn’t much of a price decrease here. It’s just a shift of how that’s marketed into the consumer market.

 

People are falling all over themselves ball washing John Legere like he's the second coming when in reality all he's doing is running a game of three-card monte.

[anthony.spina97]

Alright guys, lets not make this into another T-Mobile thread...

 

 

-Anthony

[jamisonshaw125]

Alright guys, lets not make this into another T-Mobile thread...

 

 

-Anthony

It's so easy to turn it into one though. General topics has been plagued with magenta. We need an antivirus before our blood changes color and our cheeks turn magenta colored. Next thing you know we will all shrink in size and be dancing around Legerre at his expos.

 

 

Sent from my iPhone using Tapatalk

[twospirits]

And Bingo was his name...

 

 

[S4GRU]

 

And Bingo was his name...

 

 

 

 

Robert

[PythonFanPA]

 

And Bingo was his name...

 

 

 

Automatic shoe-in for official Bingo sponsorship of the Iditarod race too.

[The Dave]

It would be insane to see those Softbank style commercials here in the States with a Sprint dog named "Sparky". Perhaps he will go into space as well. Sprint could be the first to create a 4G network on the moon.

[Deval]

I think the "change" that is making any inroads in the industry is the shift from a subsidized model to a non-subsidized. It will force customers to be smarter and more careful with their devices, because "they" will be paying for it. The money per month, downpayment, etc. is coming out of their pocket, so the state of the device is top of mind.

 

If I could get the newest phone whenever I want, and pay a per-month charge for it, I would do it.

[WiWavelength]

I think the "change" that is making any inroads in the industry is the shift from a subsidized model to a non-subsidized. It will force customers to be smarter and more careful with their devices, because "they" will be paying for it.

 

You mean these phones do not cost $200?  WTF, I want my $200 phone!

 

 

AJ

[UndeadNexus]

It would be insane to see those Softbank style commercials here in the States with a Sprint dog named "Sparky". Perhaps he will go into space as well. Sprint could be the first to create a 4G network on the moon.

Hell yes. Sprint, make it happen. Also make a commercial where Otosan makes a cameo.

 

Sent from my Nexus 5 using Tapatalk

 

 

[twospirits]

Reminds me of those funny old Taco Bell commercial where the dog passes the TV that has Jeopardy and he gives the answer.

 

Otosan is sitting there watching a T-Mobile commercial and he blurbs out "Bullshit" or "baloney" (due to censors) and turns to Sparky and start a conversation about Framily, Now, etc.

 

Otosan and Sparky. the possibilities are endless. Come on Son make it so. 

 

TS

[PythonFanPA]

You mean these phones do not cost $200?  WTF, I want my $200 phone!

 

 

AJ

 

I can just see you chasing Sprint store reps now, exactly like this (except perhaps without the bike):

 

[WiWavelength]

I can just see you chasing Sprint store reps now, exactly like this (except perhaps without the bike):

 

Speaking of which, when are we going over to your grandma's house for dinner?  Of course, I hope that you are picking up the check.

 

Oh, wait, wrong John Cusack 80s movie...

 

AJ

[Deval]

You mean these phones do not cost $200?  WTF, I want my $200 phone!

 

 

AJ

 

Yep, just had a long discussion at work about the last 14 years of wireless industry that I've been a part of, and how it has all been a subsidized model.

[Rocket87]

Yep, just had a long discussion at work about the last 14 years of wireless industry that I've been a part of, and how it has all been a subsidized model.

I've only been apart of it for 3 years but man is it changing. Its about to be real interesting when the subsidies are gone.

 

Sent from tapatalk

 

 

[digiblur]

Yep, just had a long discussion at work about the last 14 years of wireless industry that I've been a part of, and how it has all been a subsidized model.

 

And now the MVNO's are going.... "wait!?!  that's what we do, just charge the service cost and not the service+device rolled into one!"  I think it's great except for all the programs that are further gouging the customers with financing their devices but hey if people are stupid then why not, it's their choice to pay for it or finance it.