irev210

Reminds me of when I was on channel 476 and couldn't get a data connection going.

Couldn't figure it out but didn't think much of it.

I like the fact that they are actually trialling it first to discover the limits of how many customers it can support at what load. It should do really well in the boondocks, I mean rural areas.

Very good point.

This is a much more measured approach vs. the old "build like hell" clearwire days not realizing they were way off on their consumption forecast.

Really? You want me to go into their whole cost structure? I would if they gave me all the data.

That's my whole point.  As consumers, it's our job to just sit back and enjoy the benefits of competition.

Management of these billion dollar wireless companies can decide how to price their services and if they are appropriately priced to grow the business in the long-term.

Just arbitrarily saying that a $100 cellphone plan costs too much is sort of silly.  If they could price it for $50 and generate a nice return, sign me up!  I doubt wireless companies are going to create cost structures that are not sustainable.  Everything that T-Mobile has done seems to be very creative while maintaining margins. 

The fact that Sprint is about to go on an all out price war while continuing NV2.0 is a telling sign that we haven't hit bottom in terms of pricing.

I think what clearwire did with microwave and site leasing was very innovative (for the time).  I suspect there is lots of room to innovate further to reduce costs and increase performance.

Also, at some point, with all the old T-1 lines ripped out and all the base stations from a decade ago replaced, capital spending will normalize.

I can't wait for lower prices and better services from Sprint and T-Mobile.

I said share the network. I did not say merge. What do you have against that? I don't want a race to the bottom. Where the heck is Sprint going to find the money to pay back the loans they took against NV? Not by offering $100/month family plans. BTW, T-Mobile did not make money last quarter. Not only did they drew down on the cash abut the only way they made money is by counting the $731M from Verizon.

Why don't you want a race to the bottom?  As a customer, don't you want the lowest bill possible?

How do you figure that $100/month family plans are not profitable for sprint?

Last quarter T-Mobile made 3.517 billion in gross profit, earned $2.113 billion before interest, taxes, and depreciation (29.4% margin), generated a net income of $5.4 million.  It generated $970 million in cash from operations, spent $940 million on capital projects, generating free cash flow of $30 million.

In a lot of cases, they lease from the same tower cos, get backhaul from the same ILECs and cable cos, etc.  There is a lot of sharing between the two.

I want competition - I want them figuring out new ways to drive the costs down.  T-Mobile has been really good at that.

To just say "well, a $100 plan isn't profitable" without explaining why it isn't profitable is sort of like saying "well, a $1000 plan isn't profitable".

No. The issue here is not where, it's how they managed the backhaul contracts. Bidding, execution and deployment. Those failures would have just been isolated to cities instead of failing everywhere. I'm not sure how that would have yielded a better result.

 

Also, backhaul went much easier in the rural areas. So rural backhaul was not the cause of any delays in urban/suburban areas. Rural buildout really never siphoned work away that could have happened in the cities. That's a fallacy and maschination for egocentric city dwellers who think that those people work on that farmer's tower could be working on mine instead!

 

But the reality is that rural tower had easy to get backhaul and didn't require permits. So if they skipped the rural site and waited until the urban sites had permits and backhaul, they would have people waiting around that could be deploying something. Hell, they would probably still not be working in rural areas if they did it that way.

 

Sprint is rebuilding its entire network. Cities and rural areas. And they worked on every site the moment it was ready. Whether in the city or in a rural area. And that's the way it should be.

 

My complaint with Sprint in regards to backhaul is they should have released all the backhaul systemwide back in October 2011, while Network Vision plans were being finalized. However, they tried a just in time backhaul scenario plan instead of letting backhaul vendors get way out in front. Sprint did this for financial reasons, undoubtedly. But it really should have been figured in.

 

Additionally, Sprint should not have gone with the lowest priced backhaul providers that say they will meet their spec/schedule. There should have been a lot more emphasis to find the lowest priced vendor who can best meet the schedule. And last...all of it should have been better managed. When vendors got behind, they should have used the remedies allowed in the contract instead of giving them grace after grace.

 

But all this is really just Monday morning quarterbacking at this point. This phase is largely over. And the new guys under Masa are on it. These types of failures are just not going to happen like this ever again. Onward!

 

Robert via Samsung Note 8.0 using Tapatalk Pro

Do you have any specific examples of the backhaul fiasco?  I would love to hear some stories/examples of how things went wrong - such as examples about bad contracts, or grace periods, or other things that really caused this issue.

I think it is an exciting time for sprint.  I'll be curious to see what Saw can do with Sprint's network and how the new CEO and finance guys can come up with new innovative pricing/services to lure customers back.

Sprint will do fine once they have their network in order. Do I think they will make inroads against Verizon/AT&T? Maybe they can buy a few million from them by offering loss making or break even plans or buying ETF's or offering devices at a discount. But in the long term neither Sprint nor T-Mobile will have  success against the big two. They are too entrenched. Whatever success Sprint achieves has to come from new uses of data: Connected cars, actually offering decent plans for laptops, etc. It amazes me that carriers think that laptops have to pay $60/month for a decent plan. Make it $30-$35/month and we are talking. 

 

The only way they can make inroads against the big two is to actually merge the networks so that they can spread both capex and opex over 100M people instead of 50M. Then they can concentrate on marketing against the big two. 

And if they merge, there is no incentive to compete against the big two because it will just be a big three.

You'll have AT&T, Verizon, and T-Bank acting as a tri-opoly.  If you want higher prices, less choice, worse services, etc. you would want only three carriers.

All T-Bank would need to do is just offer prices slightly below VZN/AT&T while having more spectrum to offer faster speeds to maintain their relative market share.  It would become the status quo.

While you always site how they need to "spread capex and opex over 100 million customers" to be profitable - you never really explain why they need to?

If they were both profitable last quarter during one of the most capital intensive periods of wireless history - why is it that they need to merge to be profitable?  Or is it that you just want them to be uber profitable like AT&T and Verizon?

I just don't understand "how profitable" they need to be for you to not want four national competitors.

What level of profitability would you like to see?  I think we need to start with that.  I asked before if you thought T-Mobile should spend $70k every year on each tower for capital spending and I didn't get a response

He's a classless douchebag. And he proves it every day. I'm so glad that Masa called off the merger for many reasons. But I'm probably most thankful that Legere will not be running Sprint.

 

We get to see what an independent Sprint by Masa and a Tmo by Legere will look like in 3 years. In 5 years. Whatever happens to Sprint, good or bad, will be because of Masa. And likewise with Tmo, it will be Legere.

 

You'd have to be a fool not to take Masayoshi Son in that fight. Hardly 5 feet tall. But that's where I'm backing. Doubling down on Sprint now.

 

Robert via Nexus 5 using Tapatalk

I hope that T-Mobile and Sprint both succeed.  I hope both end up having world class networks and are both awesome.  Just hope that half of Verizon's subscribers switch to Sprint and half of AT&T's subscribers switch to T-Mobile.

That would be fantastic.

The problem is that they're selling service below their long-term cost of CAPEX to maintain or improve the current network; building out A-block 700 and whatever they get from the upcoming auctions won't be cheap, and I think they're going to be caught with a lot of customers not under contract who can easily switch to AT&T (and in the future as VoLTE rolls out Sprint and Verizon), all three of whom could more sustainably match or beat T-Mobile pricing while keeping their networks operating smoothly (VZW and AT&T because customer adds are a drop in their bucket, Sprint because of the ability to evolve NV).

 

Please expand on why you think they are selling service below their long-term cost of O&M+capex.

You are basically saying that T-Mobile needs to spend the equivalent of $70,000 on each tower for upgrades, every year, and assuming that T-Mobile's revenues are flat.  That doesn't really make sense to me.

No the plans are new but there a couple of things wrong with them. They are offered for a limited time and the plan itself lasts fora limited time. It just smells like a pump and dump scheme to me. They are timing it so that whoever acquires them has to pay extra for all these new customers but then get's stuck with all these customers at a very cheap plan who then can all leave the moment the plan reverts to less data. Can we say churn city boys and girls? I thought we could! Not to mention the fact that it's not a shared plan so that my daughter's high consumption can be smoothed out by the rest of the family's low consumption.

Interesting opinion - it seems like their lower churn, improving margins, strong customer growth don't really support your facts...

Great signal around the park Street area. Just not the b41 speeds I hoped for. Assuming due to high traffic area or backhaul not fully upgraded.

-96dB in open area vs. competitors isn't that great imho.  At packards corner, for example, you get -76dB all day long and it's not even a high traffic area like the common.

But yeah, backhaul isn't upgraded in a bunch of places.  Capacity is nice to have though.  With B26 fired up and B41 up and running now, B25 is probably getting a nice breather.

Most areas around here B25 is beyond cooked.

Nothing worse than taking the B line from the city out to Allston/Brookline when schools are in session. Something like 3 stops alone at BU. Not a pleasant experience!!

 

I was there last week and Sprint seems to have some work to do down in the subway stations. I was roaming in most of the Green Line stations as well as South Station. I was a little surprised to see Verizon have coverage in between stations. Impressive unless it was just my phone being slow to update the signal. 

Yeah, I avoid the B line.  C line is the way to go.  If you are on the B line, at packards corner, they have a nice B41 alive and well, though it is backhaul limited to around 35mbit or so.

Picked up some b41 in Boston common today. -96db and got 20 mb down 7 Mbps up.

 

 

Sent from my iPad using Tapatalk HD

Boston Common has always been pretty poorly covered by clearwire, which is odd.  They have odd cell spacing around the common.  Other carriers blast signals from roofs around the common where as sprint/clear sort of dance around it.  They have one site at the end of charles street that does the heavy lifting.  Poor spacing.

What is the source for the on air T-Mobile band 12 sites?  And where are they located?  Or is T-Mobile being intentionally vague?

 

AJ

Robert was spot on - it's a TMO FIT

While I was at Boston College, I kept watching out for Band 41 because I knew there was a site in the Chestnut Hill area. Sure enough, on the last day my phone picked up a Band 41 signal but I lost it so quickly I wasn't able to run a speed test or anything like that.

 

P.S. I'll be joining this thread in the fall since I'm going to be at BC for the next 4 years!

Congrats on the BC admission!

Let me know if you have any specific questions about the area.  I live fairly close to BC (but far away enough from you hooligans).

I can't imagine Masa being happy in 4th place if Sprint subscriber numbers slip & T-Mobile numbers continue to grow. That could speed up the M&A talks between those two companies...

From all the leaks - everything is in place.  The M&A talks are done.

I thought it was interesting that T-Mobile already has first 700MHz A block sites on air.  I am wondering how many 700MHz sites T-Mobile will be able to get on air by the end of the year.  Doesn't seem like much but will be interesting to see.

AJ could probably chime in here - he is much more familiar.  I know he mentioned that not a significant amount of A block will be available until 600MHz auction time.

We will see how much more they will have tomorrow .

They did well.

Added 1.323 million postpaid, 465k prepaid, total 1.788 million customers.

Some how postpaid churn improved to 1.5% from 1.6% a year ago.

Hrm, do I have this right?  T-Mobile at 50.545 million customers, Sprint at 54.553 million?

The more I think about the $180M number, I think it's bogus.  It has to be way lower than that for a total network upgrade.  

 

Swiftel only has about 50 sites in their network.  It is one of the smallest Sprint markets of all.  That would be more than $3M per site!  The typical Shentel NV site cost them about $250k all costs to upgrade to NV1.0.  That is taking their total NV costs reported, divided by total number of sites.  For supposition's sake, let's double Shentel's per site number from $250k to $500k for Swiftel.  Even though that is double, they definitely should be able to do it for at least double the cost of Shentel.

 

That would make a total upgrade cost for Swiftel around $25M.  Definitely not chump change.  But a way far cry less than the $180M that was mentioned to me.  Granted, this is still a HUGE number for a city of 12,000 people to pay to upgrade right now.  But it sure makes it seem possible.  And the value of Swiftel is definitely something Sprint can quickly and easily absorb.

 

Masa, make it so!  

 

Robert

Good thought.  I suspect that maybe the contract was valued at $180 million?  Maybe something along those lines.  I wish we knew more of what was going on.

The telephone fund has about 17 million in cash.  They could definitely start moving towards network vision if they decided to.  Again, definitely seems like Sprint/Swiftel need to work out a long-term agreement.  With the growth that is happening in ND/SD, I am surprised that Sprint isn't just moving towards full build-out of highways and major cities.

Give it up irev . They have $20B in debt. We will see how much more they will have tomorrow .

I'll leave it at "sorta".

If they were acquired, yes - DK would get paid.

If not, there is a lot of "flexibility" with the money that is owed to DK.  

Yes, sorry I missed reading the net.  I missed the switch from debt to net debt - sorry about that.

Bottom line - 20 billion or not, it's sort of irrelevant to this conversation.

$13.6 billion in bonds

$19.6 billion in total long-term debt

$16.9 billion in net debt

/end arguing about how much debt they have - doesn't really matter which was my original point.

All these capital intensive businesses have tons of debt, which is fine, as they kick off a lot of cash to repay their debt.

How much extra they should have after it is all said and done is what we were originally arguing about.  Let's stay focused on that

Their 2013 Annual Report shows 17 issues and total long-term debt of $19.945 billion. That is also consistent with the reports of Softbank lining up financing to assume T-Mobile's $20 billion in debt.

 

Edit: Your numbers are from 2012. They took on a significant amount of additional debt the following year ($6.3 billion) by assuming the obligations of Metro PCS.

I see what you did - you added payments to DK.  Hard to really count affiliate debt.

MetroPCS Wireless Inc 7.88 9/1/2018 1,000,000 USD 1,000,000

T-Mobile USA Inc 5.25 9/1/2018 6,759 USD 6,759

T-Mobile USA Inc 5.25 9/1/2018 493,241 USD 493,241

T-Mobile USA Inc 6.46 4/28/2019 1,250,000 USD 1,250,000

T-Mobile USA Inc 6.54 4/28/2020 1,250,000 USD 1,250,000

MetroPCS Wireless Inc 6.63 11/15/2020 1,000,000 USD 1,000,000

T-Mobile USA Inc 6.25 4/1/2021 1,750,000 USD 1,750,000

T-Mobile USA Inc 6.63 4/28/2021 1,250,000 USD 1,250,000

T-Mobile USA Inc 6.13 1/15/2022 1,000,000 USD 1,000,000

T-Mobile USA Inc 6.73 4/28/2022 1,250,000 USD 1,250,000

MetroPCS Wireless Inc 6.63 4/1/2023 5,925 USD 5,925

T-Mobile USA Inc 6.63 4/1/2023 1,744,075 USD 1,744,075

T-Mobile USA Inc 6.84 4/28/2023 600,000 USD 600,000

T-Mobile USA Inc 6.5 1/15/2024 1,000,000 USD 1,000,000

Ok - I see what you are saying - they took net debt.  Missed that the first time.  Saying how much debt they have then talking about how NET debt they took the conversation in a different direction...

They will never be able to match the same margins as AT&T and Verizon. There is nothing wrong with debt except you have to pay it back . In AT&T's and Verizon's case they will be able to pay back the debt faster and the be able to improve their network or purchase companies, or spectrum ,etc.

Or make their stock price go  up faster, higher dividends, etc

Hence my point, if I was a stockholder, I would be singing a much different tune.

Just different ways of looking at it.

Actually T-Mobile has $20B in debt

1,000,000 6,759 493,241 1,250,000 1,250,000 1,000,000 1,750,000 1,250,000 1,000,000 1,250,000 5,925 1,744,075 600,000 1,000,000

 

Sprint and T-Mobile are not AT&T. They cannot spread their capex over 100M people. They don't have ooddles of low frequency spectrum. So margins matter. Or you think that T-Mobile is doing this to please you and give you the consumer cheaper prices. They are doing this because DT wants out of the market. Whether it is Sprint or Dish or somebody else they want out. They want out because they know they cannot compete with the big two.

 

They cannot spread their capex over 100MM people (and maintain the same wireless margins that VZ and T have*).

I think that T-Mobile wants to gain market share and say "yeah, we'll make less per customer but ultimately,we'll have more customers, so overall we will make more in the long-term."

I am not worried about AT&T and Verizon.

 

Sprint has $33 billion in debt; T-Mobile has $14 billion in debt. Sprint lost almost $2 billion last year while T-Mobile barely broke even. The two little companies are still only around because they respectively got bailed out by SoftBank and Deutsche Telekom (via AT&T breakup fee).

What is wrong with 33 billion in debt?  What is wrong with 14 billion in debt?  AT&T has 75 billion in debt.  Verizon has 94 billion in debt.

The little two companies are only around because they are highly attractive assets worth billions.  It's not charity - nobody "bailed out" T-Mobile or Sprint.  Softbank looks at Sprint as an investment, not charity care.

T-Mobile had 35 million in net income after 4 billion in capital expenditures.  T-Mobile spent more on capital in 2013 than the last three years COMBINED.

Sprint's issues are well documented and well compounded - took many years to "right the ship" and we've already started to see margin expansion even with customer losses.

It's not that these two entities can't be stand alone - they would be more profitable as combined entities, sure.  But in no way would they not be self-supporting on their own.

As a customer, I'll take them on their own and take the cheaper prices.  Again, as a stockholder, I would take them as a combined entity.

No margin (profit)  = competition disappears (bankruptcy, consolidation, retrenchment, etc.)

 

That's (market) economics. So we should "care". Low prices are great, but they ultimately need to be sustainable and successful (profitable) for the companies to continue to offer them.

That's all well and good but given the current industry gross margins, none are in danger of not making enough "profit".

Do you really think that T-Mobile's pricing strategy is them attempting to drive themselves into bankruptcy?

What's wrong with a 10% operating margin?  Why does VZ need a 63% gross margin and a 26.5% operating margin?  Why does ATT need a 60% gross margin and a 23.67% operating margin?

That's my view, as a customer.

Sure if I was a stockholder in VZ or T, I would want highest return possible.

If I was a S stockholder, i would want them to buy TMUS all day long.

But as a customer - no way.  I'll take lower margins, more competition, better pricing.

None of them are going bankrupt.

He said, as he understands it, Swiftel wants to sign a 15 year agreement extension in order to commit to the $180M upgrade they would have to do to upgrade to Network Vision and add all the LTE bands. He said since Swiftel is owned by a government agency, they would have to sell bonds to get money for the work. And most bonds require backing a 15 or 30 years of guaranteed revenues. 30 years is best to get good rates, but 15 years is pretty much the minimum based on their ratings and bond capacity.

 

I suspect that there is a bit more to this.  Considering the entire Telephone Fund for the city is $50.756 million in assets, it would be absolutely foolish to spend $180 million to upgrade the system without a long-term contract to repay the debt in place.  Even with that, it is amazing that the city with General Fund revenues of $10 million would be willing to take on that much risk.

As far as rates - it's obviously cheaper to borrow money for 15 years vs. 30 (think of your mortgage).

Bottom line, I am guessing Sprint is just playing hard ball to get the city to sell the Swiftel at a low price.  Makes sense.

The city should just move on.

I am not sure why people on this forum care about wireless margins.

If anyone says "because that will lead to a faster/better network" I will quickly point to AT&T as a leading example of where profits go.

As far as I am concerned, people should be thrilled that T-Mobile is kicking up some dust on how to price out plans.

The fact that Hesse is talking about changing plan pricing (yet again) is encouraging.

It's competition guys.  We want the fastest data, best coverage, best call quality, all at the lowest price.

I've noticed a lot more B41 popping up.

Airport, pike, etc.

It doesn't seem to work much better than WiMAX (signal comes and goes very quickly) but anything to take off load from B25 is a plus.

I think they really need to get 8T8R setups going fast.