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Thread: Could Sprint go Bankrupt????

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    Could Sprint go Bankrupt????

    I saw where Sprint is going to cut costs by 2.5 billion. They are also laying off more Sprint employees. It does not sound like Sprint is doing well financially. So it makes me wonder if Sprint is in real danger of going bankrupt and going out of business. Here is the news artical about the cuts. http://www.usatoday.com/story/tech/2...nths/73211088/

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    Imo yes but they'd be adsorbed in one form or another. Contracts might not be honored but most could find better & cheaper.
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    Because they're still burning billions and they're running out of money, yes, there's a risk they could go bankrupt. BUT, it's the not the liquidation type bankruptcy where they'd go out of business. It would be the restructuring their debt bankruptcy, so they could come out leaner.

    So to answer your question in simple terms, is there a risk Sprint could file bankruptcy? Yes. Is there a risk Sprint will go out of business / be liquidated? No.

    The biggest problem is that, although they're adding some customers, their revenue isn't growing like T-Mobile's. So they have to cut costs to become profitable. The WSJ article said Sprint has the highest costs to provide service (that's not what they charge customers, but what it costs Sprint to provide the service to customers).

    Hopefully all those new Radio Shack stores can save them...
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    Quote Originally Posted by volaris View Post
    ....hopefully all those new radio shack stores can save them...
    lol lol lol lol.

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    Quote Originally Posted by zapjb View Post
    Imo yes but they'd be adsorbed in one form or another. Contracts might not be honored but most could find better & cheaper.
    This isnt true at all....I see where are in the lets make stuff up portion of the episode....

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    Sprint will survive, I have faith in Marcelo

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    At worst they file for chapter 11, they wouldnt be asorbed wouldnt be liquidated, hell donald trumps done it even, they would be fine, as stated by someone else theyd just come out a little leaner and actually it wouldnt be the worst move for them to do.

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    Maybe Sprint should try something crazy like going 100% online sales or pretend to be taken over by Republic Wireless and buy them out but use the Republic Name. Everything online, with lots of forums, and WiFi calling. Turn all the Radio Shacks into Coffee Shops with Free WiFi. Something dramatic to change public perception. But really ,the only thing they need to become best is to put up more towers. They should put up 20 Macro Sites a week or something. Cut the Ads, Cut the Campaigns and build out the Network. If Verizon and AT&T had only meager coverage they would not be considered the best no matter what color their logo. I would even say that having a good network is more important than Sprint carrying a cutting edge line of smartphones. But if there is a merger possible then it is slim everything down and get ready to sell. Don't extend the network out too much or the costs can't be recovered. After a merger there would be more consolidation yet.

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    Sprint has not been doing good for a very long period of time, we have seen them drop some blood, but we never saw them bleeding like with this 2 Billion dollar cut.

    It would not make sense for Sprint to be going bankrupted.

    One Hand: Sprint has been doing bad for a while now and can't seem to keep up with everyone else.

    Second Hand: Maybe this is Sprint restructuring it self so that it can put that money toward making the company better, cutting the fat and putting the money in parts of the company that need the help to make it better.

    Over all think of it like this, why would Softbank spend over 80 million for Sprint if they did not think Sprint would be profitable, they knew Sprints position in the market before they made a move on them, so i don't think this is as bad as it sounds.

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    Quote Originally Posted by Technologe0 View Post
    Sprint has not been doing good for a very long period of time, we have seen them drop some blood, but we never saw them bleeding like with this 2 Billion dollar cut.

    It would not make sense for Sprint to be going bankrupted.

    One Hand: Sprint has been doing bad for a while now and can't seem to keep up with everyone else.

    Second Hand: Maybe this is Sprint restructuring it self so that it can put that money toward making the company better, cutting the fat and putting the money in parts of the company that need the help to make it better.

    Over all think of it like this, why would Softbank spend over 80 million for Sprint if they did not think Sprint would be profitable, they knew Sprints position in the market before they made a move on them, so i don't think this is as bad as it sounds.
    Exactly...they may be making these cuts so they can fund their next network build out and other initiatives.

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    Quote Originally Posted by Technologe0 View Post
    Sprint has not been doing good for a very long period of time, we have seen them drop some blood, but we never saw them bleeding like with this 2 Billion dollar cut.

    It would not make sense for Sprint to be going bankrupted.

    One Hand: Sprint has been doing bad for a while now and can't seem to keep up with everyone else.

    Second Hand: Maybe this is Sprint restructuring it self so that it can put that money toward making the company better, cutting the fat and putting the money in parts of the company that need the help to make it better.

    Over all think of it like this, why would Softbank spend over 80 million for Sprint if they did not think Sprint would be profitable, they knew Sprints position in the market before they made a move on them, so i don't think this is as bad as it sounds.
    Well Son bought Sprint with the assumption that he'd later be allowed to buy T-Mobile and automatically own a carrier almost as large as AT&T/VZW. Once that didn't pan out, it was downhill to what we have today. His original intention was never to try to compete in the market only by owning Sprint.

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    Sprint has been going bankrupt for years, just like how the world has been ending for millenia.

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    Quote Originally Posted by Zeus_ View Post
    Well Son bought Sprint with the assumption that he'd later be allowed to buy T-Mobile and automatically own a carrier almost as large as AT&T/VZW. Once that didn't pan out, it was downhill to what we have today. His original intention was never to try to compete in the market only by owning Sprint.
    So what would sale price of t-mobile would been? If son puts that money into sprint it could turn it around. Dish network wireless plans are not working out and maybe sprints needs to buy out dish network.

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    Quote Originally Posted by Zeus_ View Post
    Well Son bought Sprint with the assumption that he'd later be allowed to buy T-Mobile and automatically own a carrier almost as large as AT&T/VZW. Once that didn't pan out, it was downhill to what we have today. His original intention was never to try to compete in the market only by owning Sprint.
    No, Son didn't buy Sprint assuming he'd be allowed to buy T-Mobile. Son bought Sprint thinking that Sprint + Clearwire had a huge spectrum advantage over competitors and he'd clean AT&T and Verizon's clock with faster speeds and cheaper plans - much the same plan that worked for SoftBank in Japan. Only after it became clear that Sprint's problems ran deeper did he want to buy T-Mobile.

    If he thought he couldn't compete by owning Sprint alone, he would have had made a three-way deal with DT (who would have been glad to accommodate) and Sprint. Buying Clearwire was practically assured since Clearwire needed to sell and it's nearly impossible that anyone else could get approval to buy Clearwire given Sprint's position in it. Dish put up a fight, but ultimately probably wouldn't have been able to seal the deal given Clearwire's ownership structure. T-Mobile was way less likely to happen so if he thought he couldn't compete owning Sprint + Clearwire alone, he would have made it a three-way deal.

    Plus, if he thought that T-Mobile was the way to go, he wouldn't have had Sprint buy Clearwire. There's no way that Sprint + Clearwire + T-Mobile gets approved. ~55MHz from Sprint, ~75MHz from T-Mobile, and ~150MHz from Clearwire just wouldn't be allowed when AT&T and Verizon (who were serving most customers) were making it work with ~100MHz. But there's a much more reasonable chance that Sprint + T-Mobile gets approved if Sprint had liquidated its Clearwire position to Dish. 55MHz + 75MHz would likely have been more spectrum than Verizon or AT&T, but not so much more that the FCC would have cared.

    A year in, Son saw that Sprint was a mess and that T-Mobile is the carrier he should have bought. He thought, "I use TDD-LTE and Sprint has this pile of TDD spectrum via Clearwire that they don't seem to know how to use. I know how to use that spectrum so if I buy Sprint it means lots of money because Sprint is so cheap!" But Sprint's problems were greater than he anticipated, T-Mobile was in a much stronger position than I think anyone would have guessed, America is much less urban (impacting 2.5GHz utility), etc.

    The plan to buy T-Mobile was simple buyers remorse. While Sprint's stockpile of spectrum might be great in 2020, it became clear that Sprint was going to lag behind what T-Mobile could achieve in the near-term. Worse, Sprint's financial situation was such that the long-term might not be a possibility. T-Mobile had what was needed to compete today - a lot of AWS/PCS spectrum for wideband LTE and the fiber links already in place. Sprint had a lot of 2.5GHz spectrum that would take longer to roll out and a lack of fiber links to support data services.

    Son had what seemed like a reasonable plan. Sprint was cheap! $20.1B for a 70% stake in the third largest carrier. That's way less than AT&T was willing to pay for T-Mobile ($39B) which was pre-MetroPCS with no LTE plan, little spectrum, and few customers. Sprint would scoop up Clearwire on the cheap ($2.97/share) and be sitting on a pile of spectrum no one else could match. What was Sprint's issue? It didn't have the spectrum to do better than 5+5 LTE without partners. With Clearwire in hand, Sprint would be awesome right? A year in, Sprint was gushing red ink with a network in last place while T-Mobile was profitable (even if barely) while adding loads of customers and had an LTE network that was executing wonderfully. T-Mobile was the turnaround success story, not Sprint.

    Worse, was that everything came at a premium because of Dish. Sprint was going to pay $2.60/share for Clearwire, but by the end of the bidding, it was $5/share - nearly double. SoftBank had to increase its bid for Sprint as well. SoftBank was originally going to pay $20.1B for 70% of Sprint, but $8B of that would be held by Sprint as cash with only $12.1B going to Sprint shareholders. While they only increased their spend to $21.6B, they increased the amount going to shareholders to $16.6B - a 37% increase. The money going into Sprint as recapitalization was really money SoftBank was just paying itself since it would be going to Sprint making profits for them. The money going to shareholders was the money spent. So what had been a cheap deal ended up being around way more expensive. When bidding, it's easy to see tiny increases and not want to walk away over small things, but those small things add up to a big increase.

    And I think that Son was kinda right about Sprint - just a couple years too late. If SoftBank had bought Sprint + Clearwire in 2010 and invested in the network then, they would have had their network ready for 2012/2013 which was still relatively early in the LTE lifecycle. Sprint first launched LTE in summer 2012 in 15 cities with little coverage and a 5+5 network. If SoftBank had bought Sprint + Clearwire in 2010, that summer 2012 could have seen 200-250M POPs covered. But Sprint probably wouldn't have come so cheap in 2010. Son thought he was getting a deal on the cheap - a company that was cheap because it was dysfunctional, but that could be easily turned around. All Sprint needed was the Clearwire spectrum and a kick in the pants.

    But the spectrum and kick in the pants came a few years too late. By summer 2013, Sprint had fallen so far behind on fiber links that they couldn't match T-Mobile's rollout speed and Son hadn't anticipated how much harder it was to get links in the US than in Japan. Similarly, local regulation around cell site planning for the tight spacing 2.5GHz required would be more of a challenge here than in Japan. A year late and a buck short, SoftBank saw that Sprint's problems were a bit deeper and that they were a bit late in addressing them for the market situation and by vastly reducing the amount of capital they injected into Sprint (in favor of a bigger payout to shareholders), they created a Sprint that will struggle to pull itself up.

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    If Sprint needs cash, they should sell B41 to At&t and Verizon for $$$


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