Sprint and T-Mobile merger talks are starting again

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4 years 8 months ago #1 by Oldbooks1
Thanks for posting this interesting news. It is fully consistent with what the Sprint CEO indicated on the Conference Call 2 weeks ago.

What is not obvious to me is what the real advantage of the merger would be.

Do you see a compelling logic for merging two carriers with incompatible networks?

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4 years 8 months ago #2 by McLovin
"....Sprint has some $33 billion in debt, which could be a hurdle to a deal with T-Mobile or cable TV companies, some analysts say. Dish Network, controlled by founder Charles Ergen, has amassed almost 80 MHz of spectrum but needs a wireless partner. Verizon has been viewed as a possible buyer of Dish Network. "A T-Mobile merger with Sprint could generate significant synergies, though regulatory approval is not a slam dunk"...."

"....RBC Capital, in a January 29 research note, said the Department of Justice would still veto a Sprint-T-Mobile deal."


ibusinesslines.com/2017/02/17/sprint-could-sell-to-t-mobile-but-dish-network-looms/
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4 years 8 months ago #3 by Oldbooks1
There is an interesting piece in Forbes that seems sensible to me.

Here the case is made on the basis of synergies which could amount to $1 billion the first and rise to $3billion the third year. A major saving would be on SG&A as well as maintenance and labor.

Presumably, this would mean both the CDMA and GSM networks would remain indefinitely and the savings would really be in terms of the scale of operations.

The article has some really interesting data on subscriber cost which comes to $137 for Sprint, $88 for TMobile and only $70 for Verizon.

If Sprint could significantly cut that cost it would be a real game changer.

www.forbes.com/sites/greatspeculations/2016/12/16/a-sprint-t-mobile-merger-makes-financial-sense-but-is-unlikely-to-materialize/#2d9b40c0a2c8

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4 years 8 months ago #4 by sfatula
"If the merger happens, I hope this accelerates adoption of 4G and beyond. I am ready yesterday for GSM/UMTS/HSPA/CDMA/EVDO to be sunset and refarmed for LTE."

I would add VoLTE just as a point to remember. Sprint is a hassle with losing data when you place a call. Perhaps a merger would encourage Sprint to adopt as T-Mobile has.

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4 years 7 months ago #5 by Oldbooks1
If a deal is agreed it will be interesting to see how the DOJ views the issue.

In most cases having fewer players on the supply side does not bode well for consumers.

The so-called natural monopolies are an exception and the telco sector does have a lot in common with these natural monopolies.

What makes it really hard is that the real advantages to the consumer of the natural monopolies are only possible with tariff regulation.

If tariff regulation in applied in the telco sector then the benefits of consolidation become less obvious and the consumer may lose out in that way if the entities decide not to merge.

It is a tough call.

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4 years 7 months ago #6 by Oldbooks1
A Wells Fargo analyst just reiterated an "Outperform" rating on Sprint even without a merger with T Mobile.

blogs.barrons.com/techtraderdaily/2017/03/20/sprint-street-underestimates-their-spectrum-efficiency-says-wells/

An alternative view comes from BTIG which has a price target of $2.85 or about 1/3 of its current price.

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4 years 4 months ago #8 by mmfacemm
It is why sprint are being very aggressive with these free year promos. Not sure if that is to boost numbers to get a better price or as a strategy to discourage a merger.

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3 years 5 months ago #9 by KentE
I think it's good aimed-at-government-agency-approval tactics to emphasize the synergy that this brings to 5G development, and the possibility of increased coverage in underserved areas.

I suspect that's all true-- and probably far more beneficial to approval chances than focusing on expense cutting, consolidation of labor, and removal of competition between the #3 and #4 networks (which has arguably lowered consumer pricing across all networks).

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3 years 5 months ago #10 by PEW
Makes sense! Sounds like the combined company will be T-Mobile...

The new T-Mobile tower equipment, as I recall, will allow upgrade via software upgrade... Sprint's implementation would not do that. So T-Mobile brings advanced tower equipment plus 600mhz (great for VoLTE) and Sprint brings 2.5GHz (lowest band of 5G). Would be awesome if after the merger, T-Mobile at least DSU all of our Sprint phones!

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