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Thread: The final obstacle to the T-Mobile/Sprint Merger Begins Tomorrow

  1. #946
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    Quote Originally Posted by elecconnec View Post
    In any case, I don't think jack-booted Mounties have ever knocked in a door and dragged off an otherwise law-abiding Canuck for watching Game of Thrones on HBO instead of "Crave"...Sent from my moto x4 using Tapatalk
    Well I was talking to some RCMP at Tim Horton's and they said that Justin Trudeau was very concerned about law-breaking Canadians with Dish Network receivers.

    I also seem to recall some rule regarding satellite receivers and RVs and that you had to prove you owned an RV in order to get a portable system.

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    AT&T... your world, throttled.

  3. #948
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    This is true
    Quote Originally Posted by NotABiot View Post
    Change that to before Jan 20 2016. Then you had a long 8 years when facts didn't matter.
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    Quote Originally Posted by CanadianAngela View Post
    Precisely. The revenue stream is enormous and Sprint has assets that have significant value. Son is not going to let that all go to [email protected]%l should the merger not go through. Unlike WeWork, Sprint can be saved.
    Then why hasn't he bothered doing that in the last 5 years? The best indicator of future behavior is past and current behavior. Sprint can be saved, but WILL it? Yes Sprint has valuable assets. Assets that can be sold for billions instead of sticking billions into a failing company. What if "saving" Sprint means downsizing Sprint? How does that help consumers especially in rural areas which is the whole point of the lawsuit.

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    Quote Originally Posted by Jack Hagar View Post
    Then why hasn't he bothered doing that in the last 5 years? The best indicator of future behavior is past and current behavior. Sprint can be saved, but WILL it? Yes Sprint has valuable assets. Assets that can be sold for billions instead of sticking billions into a failing company. What if "saving" Sprint means downsizing Sprint? How does that help consumers especially in rural areas which is the whole point of the lawsuit.
    I don't think the point of the lawsuit was rural towns, I do believe that was part of the defense. The lawsuit is more about pricing. Even if sprint downsized, pricing is done on a national level, not an individual market level
    Sprint competing in urban markets still had an effect on the national pricing structure. Verizon doesn't charge Chicago one price, and rural Kentucky another. It's the exact same reason why verizon had to change their plan pricing a few years ago, due to pressures from tmobile and sprint, even though verizon covered more markets than both.

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    Quote Originally Posted by CanadianAngela View Post
    "Wall Street is growing more nervous about the fate of the proposed merger of T-Mobile US Inc. as lawyers for the companies prepare to make final arguments Wednesday in defense of their deal.

    Shares of Sprint are trading at a more than 40% discount to the value of T-Mobile’s proposed all-stock deal, which is now worth about $34 billion after steady gains in T-Mobile’s market value. It is the widest gap since the merger of the two cellular providers was struck nearly two years ago."

    https://www.wsj.com/articles/t-mobil...et-11579084200
    Even Wall Street knows the reality that Sprint is worthless unless it is merged with T-Mobile. Nobody is in line next to buy it. There's no turnaround plan that will be implemented by Sprint if the merger is denied. It has no future as a standalone company---that's why it's trading at such a discount.

    Quote Originally Posted by CanadianAngela View Post
    Sprint can't just raise rates and believe that suddenly they will stop losing money. The world doesn't work that way. Rates are set by the market. Sprint would lose even more money if they raised rates because there is sufficient competition.
    No, the other three carriers could also raise their rates to increase their profits in response to Sprint raising their rates. You and the attorney generals have a very unrealistic expectation that Sprint will continue to offer a service at a price point where they lose money on. That will end eventually. There are several ways it could come to an end, but it's a financial inevitability it will end.

    Verizon and AT&T are probably hoping for the merger to go through and for Sprint to stop their endless desperation pricing offers.
    They're not hoping for the merger to go through. Why would they want a stronger competitor. What business do you know says, I want some stronger competition that will steal my prime customers? They want the merger to fail. For Sprint to wither away and die. And then it will be one duopoly against T-Mobile and they can beat a weaker T-Mobile because they have a larger economic scale.


    Or perhaps they'll sell Sprint to someone who had deep pockets and is willing to invest in the company.
    If anyone thought there was someone willing to invest in the company, the stock wouldn't be trading at a 40% discount like you mentioned.

    Quote Originally Posted by CanadianAngela View Post
    But Sprint actually was profitable in the recent past
    This is false. Sprint has had a long-term history of losses.

    Quote Originally Posted by hofonewb9 View Post
    I don't put much stock in their earnings for the last 2 and half years. Ever since they entered serious negotiations with tmobile, and announced a merger, they've had no real incentive to actually compete.
    As was pointed out earlier in the thread, they had one profitable year since 2006. Did they not have any real incentive compete going back that far?

    The fact is Sprint is damaged brand. Son invested in it and couldn't get it turned around. It got worse. Sprint's network performance is usually a distant fourth, market after market.

    There is no payback for someone to invest in a damaged entity and try to turn it around. Investors looks for return on investment. They don't look for charity projects.

    Sprint has value to T-mobile because T-Mobile can immediately use their assets, they can immediately generate revenue from their customers and the combined company gives them a better economic scale to compete with AT&T and Verizon.

    Nobody sees any value in Sprint as a standalone. If they did, they would've already approached Son and made a deal.

  7. #952
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    Quote Originally Posted by Jack Hagar View Post
    Then why hasn't he bothered doing that in the last 5 years? The best indicator of future behavior is past and current behavior. Sprint can be saved, but WILL it? Yes Sprint has valuable assets. Assets that can be sold for billions instead of sticking billions into a failing company. What if "saving" Sprint means downsizing Sprint? How does that help consumers especially in rural areas which is the whole point of the lawsuit.
    The point of the lawsuit by the states has nothing to do with rural areas at all.

    The rural coverage argument was the promise that if the merger goes through that savings will generated and that those savings would be used by T-Mobile to add coverage to rural areas, making it a more viable competitor to AT&T and Verizon.

    The premise of the states is that removing a low-cost competitor will decrease competition and raise prices at the low-end, negatively affecting lower-income consumers that now can choose between Sprint and T-Mobile for service.

    The premise of T-Mobile is that the merger will result in a third high-quality national competitor and there will be three strong carriers which will increase competition at the high end, and that the low-income customers can move to an MVNO.

    Both premises are probably true, though the second one would take quite a few years to occur.

    Sprint hasn't been competing because their management is clueless. Back when T-Mobile was trying to be acquired by AT&T they weren't trying very hard either. The idea when you're lobbying for approval of a merger is to promote the fiction that without a merger the weaker party will go out of business.

    Now that Legere will be leaving T-Mobile, perhaps, if the merger doesn't go through, he can be hired by Softbank to turn around Sprint.

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    Quote Originally Posted by jet1000 View Post
    No, the other three carriers could also raise their rates to increase their profits in response to Sprint raising their rates. You and the attorney generals have a very unrealistic expectation that Sprint will continue to offer a service at a price point where they lose money on.
    What's what's rate they can charge to make money on? What's the break even rate on a carrier's service.

    Quote Originally Posted by jet1000 View Post
    They're not hoping for the merger to go through. Why would they want a stronger competitor. What business do you know says, I want some stronger competition that will steal my prime customers? They want the merger to fail.
    Depends if they really believe they can steal their prime customers. What incentive does a prime business account have to change services from Verizon to tmobile? To save $20? Not sure it's worth the hassle.


    Quote Originally Posted by jet1000 View Post
    As was pointed out earlier in the thread, they had one profitable year since 2006. Did they not have any real incentive compete going back that far?
    Um, debatable honestly. Son has always wanted a tmobile merger since the day he bought sprint. So, you can argue he just let sprint meander until he got what he wanted.




    Quote Originally Posted by jet1000 View Post
    The fact is Sprint is damaged brand. Son invested in it and couldn't get it turned around. It got worse. Sprint's network performance is usually a distant fourth, market after market.
    Tmobile added millions of users in the early years of uncarrier, with a very urban centric network. People will come if they see value in the service, and in the company. Sprints name is more a problem for them, than the network.

    Quote Originally Posted by jet1000 View Post
    There is no payback for someone to invest in a damaged entity and try to turn it around. Investors looks for return on investment. They don't look for charity projects. .
    True for most, Masa Son doesn't seem to share these same beliefs all the time though.
    Quote Originally Posted by jet1000 View Post
    Nobody sees any value in Sprint as a standalone. If they did, they would've already approached Son and made a deal.
    Would be hard to approach son and make a deal, he's been dealing with tmobile for going on 3 years now. Tmobile was the deal he always wanted.

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    https://www.fiercewireless.com/wirel...le-sprint-deal is the most coherent article that I've read regarding the likelihood of the merger being approved.

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    Quote Originally Posted by CanadianAngela View Post
    ...Now that Legere will be leaving T-Mobile, perhaps, if the merger doesn't go through, he can be hired by Softbank to turn around Sprint.
    Quoting myself Posts: #778 & #783.

    Quote Originally Posted by zapjb View Post
    It'd be funny if Legere doesn't have a non-compete & ends up running Sprint. I'd laugh & laugh.
    Then JL's opening statement after Sprint hiring.
    Quote Originally Posted by zapjb View Post
    Something like this:
    JL: I fixed TM & tamed the industry to be consumer friendly. Today I take on my biggest challenge to take on the big 3 now. Forming Sprint into a lean mean (to competitors) machine & filling out Sprint's coverage gaps. To compete with anyone & yes continue to change the industry for the benefit of the consumer. The new Sprint begins NOW!
    If my actions include deeds of philanthropy in charity and acts of loving kindness I am living in my Faith.

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  11. #956
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    Quote Originally Posted by hofonewb9 View Post
    I don't put much stock in their earnings for the last 2 and half years. Ever since they entered serious negotiations with tmobile, and announced a merger, they've had no real incentive to actually compete. Their price was set and why invest more into something you are not going to get a bigger return in. Made no business sense for softbank to invest in sprint. If the merger fails, this changes. If the judge decides against the merger, Sprint stock will drop like a rock once the verdict is announced. Softbank will have no choice but to counter this by announcing they will invest in the company. Much like they did in 2017 when they first ended tmobile talks. The stock dropped, and to counter it softbank announced intentions to invest in sprint. This is why I don't believe they will announce layoffs, or file bankruptcy, or any of that after the verdict. We've seen how they will react, they called off tmobile talks before. I do not believe Son will intentionally tank his largest U.S. telecom investment. Nothing he has done before suggests he will.

    You can debate if softbank will actually follow through or not, or if they will just look for another buyer or partner. But, I highly doubt they intentionally tank the company if the merger fails by announcing job cuts, service area cuts, and price increases. This would be suicide. Son is not stupid.
    If you go back further it isn't any better

    Name:  Capture.jpg
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    This isn't a recent trend but pretty much goes back quite a ways.

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    Quote Originally Posted by hofonewb9 View Post
    What's what's rate they can charge to make money on? What's the break even rate on a carrier's service.
    I think a more relevant question is "what does ARPU need to be, and how many subscribers do they need, in order to break even?"

    The carriers are out there offering a wild array of rates and plans via postpaid, prepaid, MVNOs, family plans, etc. Each additional subscriber costs them very little.

    ARPU for 2019 Postpaid
    AT&T: $55.89
    Sprint: $42.30
    T-Mobile: $46.22
    Verizon: $44.86

    Sprint has been in a steep decline for ARPU for years because of the loss of all those high-value Nextel accounts and because of the desperation pricing they've been engaging in. Interesting that T-Mobile's ARPU is higher than Verizon's. Verizon now reports "Average Revenue Per Account" and also states the average number of users per account. So probably Verizon has a great many family plans which result in lower ARPU. Verizon also has a huge number of both corporate accounts and users that get corporate discounts for their personal accounts which drags down their ARPU.

    With the fewest number of subscribers and the lowest ARPU Sprint is hurting. But it's hurt that they inflicted on themselves.

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    Quote Originally Posted by hofonewb9 View Post
    Depends if they really believe they can steal their prime customers. What incentive does a prime business account have to change services from Verizon to tmobile? To save $20? Not sure it's worth the hassle.
    That's the great thing about competition. The market will decide.


    Son has always wanted a tmobile merger since the day he bought sprint. So, you can argue he just let sprint meander until he got what he wanted.
    Son could've thrown a lot less money into Sprint than he did if his goal was let it meander until it merged with T-Mobile. He was clearly trying to make it a profitable entity on its own and he failed.


    Tmobile added millions of users in the early years of uncarrier, with a very urban centric network. People will come if they see value in the service, and in the company.
    The market hasn't shown recent evidence that is can support four profitable national networks. It's only shown it can support three. And with new technology demanding that national network eventually be upgraded to 5G, it only makes the odds longer that a fourth MNO can operate profitably in this country.

    Would be hard to approach son and make a deal, he's been dealing with tmobile for going on 3 years now.
    The Obama administration ended his bid to merge in early 2014:

    https://www.theatlantic.com/politics...hotgun/457281/

    There was plenty of time for potential suitors to make bids for Sprint if they thought it was such a great deal. I know that the public doesn't always hear about every offer made. However, I haven't heard of analysts even saying, "You know Company A should buy Sprint as it would be a great profitable acquisition for them. " Seemingly people look at Sprint's numbers and don't see much of an upside.

    The stock market seems very bleak on Sprint's future without T-mobile. That's the information that I've seen.

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    Quote Originally Posted by CanadianAngela View Post
    Sprint hasn't been competing because their management is clueless. Back when T-Mobile was trying to be acquired by AT&T they weren't trying very hard either. The idea when you're lobbying for approval of a merger is to promote the fiction that without a merger the weaker party will go out of business.
    They haven't been trying to merge since 2006. But they've been losing money since then.



    Now that Legere will be leaving T-Mobile, perhaps, if the merger doesn't go through, he can be hired by Softbank to turn around Sprint.
    He's remaining on the board of T-Mobile. He's not going to go to work for Sprint.

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    Everyone thinking that Sprint can turn things around like T-Mobile did after the failed AT&t merger are delusional. First of all T-Mobile got spectrum and 4 billion dollars from AT&t, second of all T-Mobile didn't offer an iPhone at the time. John Legere made a deal with Apple to bring the iPhone to T-Mobile. He needed those 3 thing to be able to turn T-Mobile around. Sprint has none of that after a failed merger, all they have is their horrible reputation! Dish on the other hand has won awards for customer service with satellite, so you know many people here don't like Charlie Ergen, as a startup cell phone company they may have way more success than Sprint.

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