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Thread: Why Sprint & TMobile Need to Merge

  1. #31
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    The current rumor is that any merger would be an all-stock deal, with no exchange of cash. According to financial experts and analysts that I've read, this would largely rule out Sprint's debt.

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    Quote Originally Posted by dwtmd View Post
    The current rumor is that any merger would be an all-stock deal, with no exchange of cash. According to financial experts and analysts that I've read, this would largely rule out Sprint's debt.
    "Rule out"??? How does debt get "ruled out"?
    Donald Newcomb

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    Quote Originally Posted by dwtmd View Post
    The current rumor is that any merger would be an all-stock deal, with no exchange of cash. According to financial experts and analysts that I've read, this would largely rule out Sprint's debt.
    How does that largely rule out Sprint's $66 Billion dollar Debt? Sprint's Total Liabilities is $66,315,000,000 as of their last Financial Report March 31, 2017. Sprint hasn't made a profit since about 2006.

    Only Softbank would largely rule out Sprint's $66 Billion dollar Debt as the 85% plus majority stock holder of Sprint by sticking a lot of this Debt to the new T-Mobile's resulting new merger company and Deutsche Telekom...

    Frankly Sprint isn't worth $66 Billion dollar. If Sprint defaults and goes chapter 11 they will have to at some point sell off their spectrum that could be picked up much cheaper than buying Sprint with all the Debt. T-Mobile just got Nationwide 600 Mhz spectrum with a average of 31 Mhz for under $8 billion. Customers and spectrum are all that T-Mobile wants from Sprint and they can get both a lot cheaper than buying Sprint with that debt. The FCC is having the CBRS (3.5Ghz) spectrum Auction next and T-Mobile can buy similar spectrum in that auction. There is just too much risk in buying Sprint with that debt.

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    Quote Originally Posted by shilohcane View Post
    How does that largely rule out Sprint's $66 Billion dollar Debt? Sprint's Total Liabilities is $66,315,000,000 as of their last Financial Report March 31, 2017. Sprint hasn't made a profit since about 2006.

    Only Softbank would largely rule out Sprint's $66 Billion dollar Debt as the 85% plus majority stock holder of Sprint by sticking a lot of this Debt to the new T-Mobile's resulting new merger company and Deutsche Telekom...

    Frankly Sprint isn't worth $66 Billion dollar. If Sprint defaults and goes chapter 11 they will have to at some point sell off their spectrum that could be picked up much cheaper than buying Sprint with all the Debt. T-Mobile just got Nationwide 600 Mhz spectrum with a average of 31 Mhz for under $8 billion. Customers and spectrum are all that T-Mobile wants from Sprint and they can get both a lot cheaper than buying Sprint with that debt. The FCC is having the CBRS (3.5Ghz) spectrum Auction next and T-Mobile can buy similar spectrum in that auction. There is just too much risk in buying Sprint with that debt.
    If Sprint were to ever sell their spectrum, it would likely fetch that much if you compare it to past auctions. Plus, its is currently the most readily available and deployable 5G-class spectrum on the market with equipment and devices. Someone with a little vision and money could prop up Sprint well before a single bid is made on 3.5ghz. I think Sprint has done a poor job demonstrating the potential of their assets. I do agree though from T-Mobile's perspective, they have no reason to take on $30B more debt and a costly integration plan where they might not turn a profit for a decade.

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    Quote Originally Posted by b1geast View Post
    If Sprint were to ever sell their spectrum, it would likely fetch that much if you compare it to past auctions. Plus, its is currently the most readily available and deployable 5G-class spectrum on the market with equipment and devices. Someone with a little vision and money could prop up Sprint well before a single bid is made on 3.5ghz. I think Sprint has done a poor job demonstrating the potential of their assets. I do agree though from T-Mobile's perspective, they have no reason to take on $30B more debt and a costly integration plan where they might not turn a profit for a decade.
    Well if Sprint's spectrum is worth $66B then Warren Buffett is going to have a break up sale of Sprint's spectrum if he gets his hand on Sprint. We just have different ideas on the value of Sprint spectrum. T-Mobile has no use for Sprint's Band 26 spectrum with all their 600 Mhz and 700 Mhz. As I said T-Mobile just got on average 31 Mhz of nationwide Beach Front 600 Mhz for less than $8 billion. The FCC is starting to look to another Spectrum Auction of CBRS 3.5 Ghz that is pretty similar physics to Sprint's 2.5 Ghz. AT&T and Verizon are picking up 28 & 38 Ghz mmWave spectrum.

    You want to know why Sprint never deployed a nation wide network for their 2.5G? Simple it cost to much if you look at this chart. The tower cost for 700 Mhz is the same as the cost for 2.5 Ghz towers. It takes ten times the number of towers with 2.5 Ghz as it does with one tower of 700 Mhz.

    Really who is going to pay Sprint $66 Billion for their 2.5 Ghz when Sprint couldn't afford to do it?


    Name:  700Mhz vs higher spectrum.jpg
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    Last edited by shilohcane; 07-24-2017 at 03:24 PM.

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    Quote Originally Posted by DRNewcomb View Post
    "Rule out"??? : How does debt get "ruled out"?
    Quote Originally Posted by shilohcane View Post
    How does that largely rule out Sprint's $66 Billion dollar Debt? Sprint's Total Liabilities is $66,315,000,000 as of their last Financial Report March 31, 2017. Sprint hasn't made a profit since about 2006.

    Only Softbank would largely rule out Sprint's $66 Billion dollar Debt as the 85% plus majority stock holder of Sprint by sticking a lot of this Debt to the new T-Mobile's resulting new merger company and Deutsche Telekom...

    Frankly Sprint isn't worth $66 Billion dollar. If Sprint defaults and goes chapter 11 they will have to at some point sell off their spectrum that could be picked up much cheaper than buying Sprint with all the Debt. T-Mobile just got Nationwide 600 Mhz spectrum with a average of 31 Mhz for under $8 billion. Customers and spectrum are all that T-Mobile wants from Sprint and they can get both a lot cheaper than buying Sprint with that debt. The FCC is having the CBRS (3.5Ghz) spectrum Auction next and T-Mobile can buy similar spectrum in that auction. There is just too much risk in buying Sprint with that debt.
    Based on what I've read, it seems that SoftBank would absorb all/part of Sprint's debt because they desperately want a merger.

    I don't know what will happen, I'm just quoting the analysts and experts who do this for a living. Many of them say a Sprint/T-Mobile merger is very likely, and would also likely be approved by the FCC and DoJ under the current administration.

    People often forget that Sprint and T-Mobile are owned by two much larger companies (with much more money), SoftBank and DT. This wouldn’t necessarily be T-Mobile buying Sprint. It might be DT buying Sprint, or SoftBank buying T-Mobile and merging T-Mobile and Sprint together. There are a lot of different possible combinations where debt wouldn’t be a major problem.

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    Quote Originally Posted by dwtmd View Post
    Based on what I've read, it seems that SoftBank would absorb all/part of Sprint's debt because they desperately want a merger.

    I don't know what will happen, I'm just quoting the analysts and experts who do this for a living. Many of them say a Sprint/T-Mobile merger is very likely, and would also likely be approved by the FCC and DoJ under the current administration.

    People often forget that Sprint and T-Mobile are owned by two much larger companies (with much more money), SoftBank and DT. This wouldn’t necessarily be T-Mobile buying Sprint. It might be DT buying Sprint, or SoftBank buying T-Mobile and merging T-Mobile and Sprint together. There are a lot of different possible combinations where debt wouldn’t be a major problem.
    Nobody knows really what will happen. Honestly your guess is as good as anyone elses here. People can post all the graphs, charts, diagrams, they can even draw a pretty rooster if they want and write a nice saying above it, they can talk about what this company or that company should do, will do, wants to do, or won't do. it doesn't mean a thing. The companies are going to do whatever they want and they are going to do what they feel is best for them. Not what someone from a website says is best for them. Your opinion on it is just as valid as someone else's who writes a 10 paragraph post on it making it seem like they are John legere's right hand man. Some guess yes merger some say no. 50-50 on who's right. I personally think some sort of merger happens even though I also think it will be terrible for competition. I think this is why a merger will happen though. Because it will be terrible for competition lol.

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    I know for a fact 1) they will do a deal, or
    2) they will not do a deal.

    It's definitely one of those choices

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    Quote Originally Posted by themanhimself View Post
    I know for a fact 1) they will do a deal, or
    2) they will not do a deal.

    It's definitely one of those choices
    Hahaha you sure about that? You wanna debate those facts? Got any proof? Where's your charts to back those claims up??? Hahaha

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    Quote Originally Posted by shilohcane View Post
    Well if Sprint's spectrum is worth $66B then Warren Buffett is going to have a break up sale of Sprint's spectrum he he gets his hand on Sprint. We just have different ideas on the value of Sprint spectrum. T-Mobile has no use for Sprint's Band 26 spectrum with all their 600 Mhz and 700 Mhz. As I said T-Mobile just got on average 31 Mhz of nationwide 600 Mhz of Beach Front 600 Mhz for less than $8 billion. The FCC is starting to look to another Spectrum Auction of CBRS 3.5 Ghz that is pretty similar physics to Sprint's 2.5 Ghz. AT&T and Verizon are picking up 28 & 38 Ghz mmWave spectrum.
    You want to know why Sprint never deployed a nation wide network for their 2.5G? Simple it cost to much if you look at this chart. The tower cost for 700 Mhz is the same as the cost for 2.5 Ghz towers. It takes ten times the number of towers with 2.5 Ghz as it does with one tower of 700 Mhz.

    Really who is going to pay Sprint $66 Billion for their 2.5 Ghz when Sprint couldn't afford to do it?


    Name:  700Mhz vs higher spectrum.jpg
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    The prices in that image aren't remotely accurate for 2017 (I've seen it dated as far back as 2009). The cost of deploying macro sites and small cells has dramatically dropped. Most of the carriers have stopped deploying macro sites like they did in 2009 because everyone is densifying. Heck, why do you think Verizon dumped $3.1B into Straight Path for 39Ghz if you think 2.5Ghz is expensive to deploy? The FCC is already working on ways to lower the cost of deploying sites (i.e right of way) so the costs aren't a relevant discussion point. There are new technologies available today like Massive MIMO and higher-order modulation/antennae which allow cost efficient deployment of high-band spectrum. T-Mobile and AT&T themselves are pushing full speed into LTE-U at 5ghz. In my opinion, Sprint is extremely undervalued and the right investor will capitalize Sprint. In fact, I will go as far as saying T-Mobile will turn out to be the biggest M&A loser if Sprint signs any deal with Comcast, Charter, Liberty, Buffet, or all four. Right now Sprint's biggest problem is that they don't have the right financial structure to invest in network and settle their debts.

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