Conan Kudo

Yes, but in the event they announce a merger, Tom Wheeler has already committed to rewriting all the rules to take away Sprint and T-Mobile's advantages at auction. Not to mention, the unjust enrichment rules for 600MHz will apply to M&A, which will be a further turn-off to merging after auction completed. It's a really bad idea to merge if 600MHz rules are going to be in their favor.

Network prioritization is an effective throttle. T-Mobile uses it, CBW used it, AT&T uses it with Aio and Cricket, Verizon uses it with prepaid, and Sprint is just now going to start using it. It's not a throughput throttle, it's effectively a latency throttle. It's a technique to enforce an effective packet processing order that pushes out the simplest/smallest requests ahead of larger ones. I figured everyone already knew that when I mentioned it earlier about T-Mobile's throttle strategy. On unlimited plans, the throttling isn't on throughput, it's on latency. Believe me when I say higher latency hurts way more than lower throughput (though there is a point where low latency+low throughput still hurts a lot). Sprint uses a throughput and latency throttle on prepaid, while it only implements a latency throttle on postpaid. That's very important to keep in mind. T-Mobile implements a throughput throttle on all plans that don't have unlimited high speed data that triggers after reaching your high speed data limit and sends you down to 128Kbps. Latency throttles are implemented in unlimited high speed data plans, but only activated if automatic network load rebalancing (where connections are forced from one sector/cell to another to even out the load) doesn't work. AT&T has a permanent throughput and latency throttle on Aio/Cricket, which is why you only get HSPA 7.2 speeds on its LTE network there. There's a second level throughput throttle that activates after you've hit the proscribed high speed data limit that drops you down to 64Kbps. Verizon implements a latency throttle on prepaid, but doesn't need a throughput one because prepaid users can't use LTE. And besides, Verizon isn't allowed to use throughput throttles on a permanent basis in LTE plans anyway.

The screen would count for everything except the AWS-3 and 600MHz auctions. That includes transactions that occur after the screen is approved and before either auction. It boxes Sprint into a cage, forcing the company to bid in those auctions.

Well, the board can still tell him no, since Masa can't be involved all the time, and while he is the majority owner, he still delegates his power to his representative on the Board of Directors.

The only beef I have with Sprint's new policy is that it skips connection redistribution and goes straight to throttling. It may be necessary, I don't know, but I would have appreciated the company at least making the effort to try to rebalance the load before going the throttling route. Especially when something like statistical analysis is used to trigger it (which means there's no fixed throttle point).

Honestly, I'm surprised it took so long for Sprint to put this in place. T-Mobile and most other mobile network operators with "unlimited" plans have had this in place from the beginning. In fact, T-Mobile even admitted as such on multiple occasions. You can get throttled on truly unlimited data (aka the $80/mo plan and the older $70/mo plan), but only on a temporary basis based on the loading of the cell you're on. If the cell is overloaded, T-Mobile will attempt to redistribute connections. If that fails, it will activate throttling mechanisms. This is why it is extremely rare to see throttling occur on the unlimited high speed data plan. I applaud Sprint for finally implementing this. The network needs it.

In the event a deal is announced, the FCC will rewrite all the rules for the incentive auction to make it a no-holds-barred auction. AT&T and Verizon will be able to gobble up all the 600MHz spectrum with the sheer amount of cash they have. Additionally, T-Mobile and Sprint are both likely to miss both auctions while in limbo. Potentially, T-Mobile could be harmed irreversibly in the market, too. And during the period when a merger is announced and it closes/fails, both parties will be frozen in order to minimize integration headaches.

That's generally because of the weak allocation for GSM. One of the weaknesses of 2G TDMA-based systems is that they are hard-limited by the amount of spectrum allocated. T-Mobile allocates roughly 2x4.5MHz of PCS to GSM, which isn't a lot. The reason for this is because T-Mobile lost 2x10MHz of PCS to Cingular when the network sharing venture was wound down as a result of Cingular Wireless acquiring AT&T Wireless Services.

Of course. I just think we should re-examine the spectrum we have before we go after new bands. And we're going to have a huge problem with the inability to have both 600MHz and 700MHz on the same device, due to the multi-duplexer requirements and the nearness of the two bands. I'm also concerned about the fact we're depending on broadcasters voluntarily relinquishing their licenses to create the 600MHz band.

I am in fact advocating for that, as well. I think the 600MHz auction has "bad idea" written all over it. I would much prefer if T-Mobile and Sprint focused on alternative options (Sprint with expanding ESMR, T-Mobile with acquiring Lower 700MHz licenses). You are correct. There were a few from MetroPCS who didn't make it over, mainly because T-Mobile wanted to relocate administrative positions to Seattle. The execs chose to make the move. Only Roger Linquist didn't make it over, but that was known as part of the merger anyway. Mostly some lower level admins didn't make the move by choice. I'm holding a "wait and see" attitude about it with the Clearwire folks that made it over to Sprint, but I'm not particularly optimistic.

There are some quiet efforts to make it so that the Expansion Band and Guard Bands in SMR are offered to ESMR incumbents after rebanding before being made available to potential new licensees. In virtually all markets except the Southeast and a few states up in the North Central region, Sprint is the sole incumbent. This would expand Sprint's ESMR from 817-824 / 862-869 MHz to 815-824 / 860-869 MHz. A new "guard" between narrowband SMR and broadband ESMR would be placed below that, most likely. As for LMR, Sprint is more likely to divest it or swap it for contiguous SMR anyway.

I do not know if he's "unmotivated" now. But he sure seemed like it when he was at Clearwire directing network management. But plenty of Clearwire folks jumped the ship when the deal closed, and several Sprint folks did, too. Senior people, even!

It depends on whether the cost/benefit works out. The "magenta contingent" doesn't care whether or not Sprint participates. Regardless of its participation, there will be at least 2x15MHz reserved for Sprint and T-Mobile (though there are efforts underway to expand this to 2x20MHz or 2x25MHz as the minimum). T-Mobile is likely to only grab 2x10MHz at most. That leaves plenty for Sprint. Personally, I want Sprint to bid for both. But from a utilitarian perspective, 600MHz doesn't look that great for Sprint compared to working to expand to up to 2x9MHz of ESMR. There were many people in the Clearwire side and the Sprint side that couldn't get along, and now the only people left from Clearwire at Sprint were the particularly unmotivated ones, like John Saw (the Chief Network Officer). I'm rather concerned about the effect that will have on Sprint in the future.

There are several important flaws here: On CDMA/WCDMA CS/PS Handover: The amount of effort required to make the necessary shims to bridge the 3GPP2 and 3GPP network systems is ridiculous. Over 100 operators worldwide have switched from CDMA to WCDMA in the last five years alone. Not a single one of them even considered doing such a thing because the two networks are extremely incompatible at the core. The interoperability shim that is part of eHRPD for CDMA/LTE isn't a very stable solution and is expected to be retired as soon as possible, due to the complexity of maintaining the shim. On Sprint/T-Mobile network integration: Based on my research, a little over 60% of all Sprint devices are capable of GSM/UMTS on the PCS band today. That said, it does Sprint very little good to use that as a reason for easy integration of the T-Mobile network, since the T-Mobile network is AWS-based, not PCS-based. As the network continues to evolve to a UMTS/LTE platform, T-Mobile will shift UMTS from AWS to PCS if there's room. Otherwise, UMTS will remain on AWS. While it is true that Sprint has the room now to deploy at least one UMTS carrier in every single market on PCS without cutting CDMA or LTE capacity at all, the challenge is reorganizing the blocks of spectrum so that HSPA+42 can be shifted entirely to PCS, CDMA can be cut away for additional UMTS or LTE carriers, and neither operator suffers. This point only makes sense if Sprint transitions to UMTS before proposing to merge with T-Mobile US. On future spectrum: Sprint has 6+6 MHz of ESMR in virtually all markets (except Puerto Rico). Sprint is practically guaranteed 7+7 MHz at the end of rebanding, and has an opportunity to expand to 9+9 MHz. Because of this, I doubt Sprint is going to consider 600MHz a headache worth dealing with. If I were Sprint, I'd focus on AWS-3 rather than 600MHz, because that would be less of a nightmare. And given that the FCC's new spectrum screen is basically a signal to Sprint that regulators will absolutely block a Sprint/T-Mobile merger, it's better for Sprint to focus on auctions (where the screen won't apply) rather than M&A. On culture integration: Sprint is historically quite bad at integrating with companies post-acquisition. Nextel/Sprint and Clearwire/Sprint were not easy for Sprint to digest. I imagine it would be even worse for a T-Mobile/Sprint merger. On Un-Carrier: SoftBank and Sprint cannot support several of the initiatives that T-Mobile is doing publicly and semi-privately. For example, T-Mobile's Simple Global roaming is only possible because Deutsche Telekom is part of the FreeMove Alliance. Additionally, T-Mobile US has elected for many years to have roaming agreements negotiated by Deutsche Telekom on its behalf as part of Group-wide roaming agreements. This has allowed T-Mobile US to have much more affordable roaming agreements than what any other player in the US has. Even Verizon Wireless didn't have this advantage, because Vodafone refused to allow them this without converting to GSM/UMTS first. You can bet that if Sprint takes over T-Mobile, Un-Carrier will die, as will virtually all of the unique offerings T-Mobile has today because SoftBank can't support it. With the amount of money that Sprint raising to attempt to finance a deal to acquire T-Mobile, the company could overhaul its network all over again, twice! To me, the cost/benefit equation doesn't work out. Sprint is better off working within itself to better its network and brand. If it wants to speed things up with a network sharing deal (involving GSM/UMTS/LTE), that's fine with me. I can see that working out quite well for the both of them, and not being a problem with the regulators (the FCC and the DOJ had no problem with the formation of the AWN NetCo that merged GCI and ACS' LTE networks, and moved the two companies firmly to GSM/UMTS). But acquiring T-Mobile is likely a waste of time, effort, and money.

No. Both operators use completely different network architectures and systems, making it difficult to make integration work. The only way to make integration work quickly is to shift to one of the two architectures immediately and discontinue access to the other. Given the economic scale, it would most likely be the Sprint architecture that is retired (which even I don't want).

Most of the world's telcos operate with margins below 20%. The telcos in richer countries typically go up to 30-35%. AT&T/VZW are quite unusual with the margins they have. In fact, if they followed proper business investment practices, they would probably be in line with the rest of the world.

The only major problem with the ARPU metric is that it doesn't count in money coming in through EIP (a term TMUS first coined, but now everyone uses). It's basically the equivalent of "below the line billing" for accounting purposes. Because the revenue required for subsidies was built into the base rate, it's fair game for ARPU. But EIP isn't, so it's factored out. Realistically, you need to have some sort of average billing per user to make up for this deficit. Verizon and AT&T have the advantage of ARPA (average revenue per account), which allows them to combine the total revenue on an account basis (including EIP) and divide it by the number of accounts. Thus, their ARPA numbers are higher. T-Mobile and Sprint can't use this metric because they don't use shared data plan schemes.