6 ms·

I'm going to voice an unpopular opinion. I think this overall is good for consumers, and good for business. Sprint is woefully under capitalized, neither T-Mo

by Aloha 9y ago

I'm going to voice an unpopular opinion. I think this overall is good for consumers, and good for business. Sprint is woefully under capitalized, neither T-Mo or Sprint have as much PCS Spectrum (read, they don't have enough) in the largest markets as either AT&T or T-Mobile. Because of this (and some other factors relating to economy of scale) neither T-Mo or Sprint is really truly competitive (on performance) with either AT&T or Verizon outside of a few selected markets. Our Mobile Phone networks are expensive in the US - but thats largely a function of how much coverage you have to provide to places where (nearly) no-one lives. Figure a cell site costs $1000+ a month to keep it on the air - and Sprint alone had 20,000 cell sites when I was inside their network last in 2015 - so 20 million a month just to keep the sites on, that doesn't cover backhaul, CO's, trunking, staffing or any of the other costs to keep a network up. Verizon and AT&T each have more coverage than sprint does, and 2-3 times the sites - they also have many more sites that on a good day might see 2-3 subs roam thru.

IBM 9y ago
They should not let this merger go through. If Sprint needs to sell they should sell themselves to Comcast/Charter. http://www.fiercewireless.com/wireless/sprint-talks-comcast-charter-said-to-continue-even-as-exclusivity-window-closes http://www.fiercewireless.com/wireless/sprint-talks-comcast-...
- Aloha 9y ago
  How would that be better?
  - IBM 9y ago
    They're big companies that can afford to invest in Sprint's network and could bundle wireless service with other products. And most importantly it doesn't let the industry consolidate from 4 to 3 players.
    - Aloha 9y ago
      How is one big communications company substantively different then another big communications company? I trust a merged Magenta/Yellow combo then I'd trust comcast.
kal444 9y ago
I don't think it's that unpopular. Sprint needs the help. By any measure, T-Mobile has been improving drastically last few years. Seems like this would actually increase competition with big V and AT&T.
- NotSammyHagar 9y ago
  tmobile doesn't need this. it's not going to make the us market better for anyone, other than maybe sprint customers, and probably better for verizon and at&t
untog 9y ago
That is certainly the best case scenario. And I'm not saying it won't happen, but it does give me pause. T-Mobile has been doing a pretty great job in recent years of expanding coverage while keeping prices relatively low, and I can't help but worry that a Sprint merger complete with two different cellphone technologies will end up being a huge distraction that'll slow both of them down for years.
- Aloha 9y ago
  the differing technologies thing isn't a big of a hurdle as you'd think - the future is LTE, not CDMA or GSM - and their respective LTE networks are fully compatible.
  - untog 9y ago
    The future is indeed LTE, but there's a long tail of people out there with old devices they have little intention of replacing. It would be interesting to see how they'd handle that. Also, are they on the same LTE bands? Even that matters. I know a lot of phones don't use T-Mobile's band 12.
    - Aloha 9y ago
      CDMA is unique, thankfully in this case - you can put up a single CDMA carrier on a shared frequency in a market and cover the whole of the market - CDMA works fine when doing a same channel/same channel handover. Essentially, with say, 2.5 MHz you could cover a whole market with a single CDMA carrier, and 1-2 GSM carriers, the sprint equipment at least is designed to do both CDMA and LTE with one hardware set - the gear that t-mobile uses is more modular, so it's even easier to leave the legacy bearers up for the long tail.
ComputerGuru 9y ago
> Our Mobile Phone networks are expensive in the US No they're not. Cell phone bills are one of the only two deflationary categories in the basket used to determine rate of inflation by the federal bank, iirc. That aside, I agree with your view. No one uses Sprint if they have a choice, it's their (previously) cheaper rates that locked people in (via contract or via simple inertia).
- clairity 9y ago
  that cell phone bills are not expensive because they've been deflationary is an odd leap to make because it's just not enough information to make that determination. you could just as easily say that costs went from extortionary to merely exhorbitant. there's no way to pin it down without some comparative information. if they've indeed been deflationary, my guess (and it's only a guess) is that capital expenditures (like building/upgrading cell sites) are slowing down now that increased capacity and speed are not the great differentiators that they once were, and a trickle of that cost savings is reaching the consumer (without diminishing returns to shareholders of course).
- sitepodmatt 9y ago
  I've just checked online and this is what I'd take https://www.walmart.com/ip/Prepaid-GSM-SIM-Card-Unlimited-Text-500-Minutes-and-500-MB-Data-30-Day-Service/705650864 https://www.walmart.com/ip/Prepaid-GSM-SIM-Card-Unlimited-Te... at $9/mo (t-mobile network), it's only marginally more expensive than what I'd pay in Thailand, Malaysia or Vietnam. Enough for my emails, whatsapp, occasional web browsering. Doesn't seem a bad deal. I think those that want a subsided jesus phone with the payment rolled into the monthly or insane amount of data are the ones paying $60+ month.
  - tyingq 9y ago
    The picture says $9, but the actual price is below that...$12.99. Confirmed by adding to the cart.
    - sitepodmatt 9y ago
foobarbazetc 9y ago
Mergers rarely work out. Even then, Sprint would somehow end up running the merged entity due to SoftBank ownership (?) so they’ll have more spectrum but the same everything else. This might sort of work if T-Mobile gets to run the thing.
- nihonde 9y ago
  My understanding is that SoftBank has been very unimpressed with Sprint’s pre-acquisition talent and was set back by having to staff up with competent managers from outside. If that’s true, then I would expect T-Mobile’s team to have a decent chance post-merger and Sprint incumbents should be very worried about the purge. Edit: This article confirms my suspicions[1]. SoftBank appointed a Chief Strategy Officer to Sprint who I believe is looking to arrange a best-case exit for SoftBank after the leadership in Kansas completely failed to step up. Also, SoftBank has always wanted TMobile as part of their original strategy, but the Obama administration blocked them in 2014. [1] https://www.bizjournals.com/kansascity/news/2017/06/06/sprint-chief-strategy-officer-yuriko-ishihara.html https://www.bizjournals.com/kansascity/news/2017/06/06/sprin...
skrebbel 9y ago
> I think this overall is good for consumers, and good for business It's an oligopoly in a market that does not expand much anymore. So the only way what you write can be true is if the combination is going to be awful bad for business for the other two telcos. Is that what you mean?
- mmcconnell1618 9y ago
  An interesting fact about Oligopolies is that they often degrade into very low margin businesses. Price collusion is one way companies attempt to counter this trend. For example, OPEC is legal price collusion of oil producers to keep margins as high as possible. Price collusion is not legal in the US but some industries (i.e. airlines) have virtual collusion because they move prices in lock-step. In some ways, the US mobile phone business is like the airlines. When one carrier offers an "unlimited" plan at a specific rate, the others rush to offer something similar. This virtual price collusion falls apart when one of the companies in the oligopoly gets greedy (they almost always do). Downward price pressure is created when one company is willing to operate on lower margins short term to take market share from the others. Lower prices are good for consumers. No small company can afford to enter the market because the barriers to entry are expensive and the margins are low. The existing carriers end up in a race to the bottom that resembles a perfect competition market. The risk is that one of the companies will become large enough to become a monopoly or near monopoly and gain pricing power to raise prices without consequences.
  - jordanb 9y ago
    > An interesting fact about Oligopolies is that they often degrade into very low margin businesses If the oligopoly fails, then the result will be low-margin businesses for everyone due to market forces. If an oligopoly is successful then tautologically the participants won't have low margins because they will be able to suppress what JP Morgan called "ruinous competition" between them.
dsr_ 9y ago
One of the reasons that Sprint is undercapitalized is that for the last six years, "everyone" has assumed that they will merge or otherwise be acquired. Putting more money in is only interesting to keep Sprint going until that happens. It's a self-fulfilling prophecy.
axaxs 9y ago
TMobile doesn't need Sprint. They've been growing great and adding users for years, and just bought nearly all of the 600mhz spectrum. Sprint has, by any objective metrics, the worst coverage and speed. It had been an awful company who keeps taking wrong steps, is outdated, and not making much investment. I'd rather the merger not to happen, as competition is good, TMobile doesn't need Sprint, and Sprint by some miracle still has a fair amount of customers.
- Aloha 9y ago
  Sprint is well setup spectrum wise for densification in urban areas with all the 2.4 GHz spectrum they have (from Clearwire) - if you look at eithers coverage map compared to say, Verizon, neither has wide area rural coverage worth writing home about
  - axaxs 9y ago
    Yes, and have already said prior their plan is microcell deployments. I happen to believe that would be a costly mistake, compared to say, 600mhz blasting far distances.

by Aloha 9y ago

IBM 9y ago

They should not let this merger go through. If Sprint needs to sell they should sell themselves to Comcast/Charter. http://www.fiercewireless.com/wireless/sprint-talks-comcast-charter-said-to-continue-even-as-exclusivity-window-closes http://www.fiercewireless.com/wireless/sprint-talks-comcast-...

Aloha 9y ago
How would that be better?
- IBM 9y ago
  They're big companies that can afford to invest in Sprint's network and could bundle wireless service with other products. And most importantly it doesn't let the industry consolidate from 4 to 3 players.
  - Aloha 9y ago
    How is one big communications company substantively different then another big communications company? I trust a merged Magenta/Yellow combo then I'd trust comcast.

kal444 9y ago

I don't think it's that unpopular. Sprint needs the help. By any measure, T-Mobile has been improving drastically last few years. Seems like this would actually increase competition with big V and AT&T.

NotSammyHagar 9y ago
tmobile doesn't need this. it's not going to make the us market better for anyone, other than maybe sprint customers, and probably better for verizon and at&t

untog 9y ago

That is certainly the best case scenario. And I'm not saying it won't happen, but it does give me pause. T-Mobile has been doing a pretty great job in recent years of expanding coverage while keeping prices relatively low, and I can't help but worry that a Sprint merger complete with two different cellphone technologies will end up being a huge distraction that'll slow both of them down for years.

Aloha 9y ago
the differing technologies thing isn't a big of a hurdle as you'd think - the future is LTE, not CDMA or GSM - and their respective LTE networks are fully compatible.
- untog 9y ago
  The future is indeed LTE, but there's a long tail of people out there with old devices they have little intention of replacing. It would be interesting to see how they'd handle that. Also, are they on the same LTE bands? Even that matters. I know a lot of phones don't use T-Mobile's band 12.
  - Aloha 9y ago
    CDMA is unique, thankfully in this case - you can put up a single CDMA carrier on a shared frequency in a market and cover the whole of the market - CDMA works fine when doing a same channel/same channel handover. Essentially, with say, 2.5 MHz you could cover a whole market with a single CDMA carrier, and 1-2 GSM carriers, the sprint equipment at least is designed to do both CDMA and LTE with one hardware set - the gear that t-mobile uses is more modular, so it's even easier to leave the legacy bearers up for the long tail.

ComputerGuru 9y ago

> Our Mobile Phone networks are expensive in the US No they're not. Cell phone bills are one of the only two deflationary categories in the basket used to determine rate of inflation by the federal bank, iirc. That aside, I agree with your view. No one uses Sprint if they have a choice, it's their (previously) cheaper rates that locked people in (via contract or via simple inertia).

clairity 9y ago
that cell phone bills are not expensive because they've been deflationary is an odd leap to make because it's just not enough information to make that determination. you could just as easily say that costs went from extortionary to merely exhorbitant. there's no way to pin it down without some comparative information. if they've indeed been deflationary, my guess (and it's only a guess) is that capital expenditures (like building/upgrading cell sites) are slowing down now that increased capacity and speed are not the great differentiators that they once were, and a trickle of that cost savings is reaching the consumer (without diminishing returns to shareholders of course).
sitepodmatt 9y ago
I've just checked online and this is what I'd take https://www.walmart.com/ip/Prepaid-GSM-SIM-Card-Unlimited-Text-500-Minutes-and-500-MB-Data-30-Day-Service/705650864 https://www.walmart.com/ip/Prepaid-GSM-SIM-Card-Unlimited-Te... at $9/mo (t-mobile network), it's only marginally more expensive than what I'd pay in Thailand, Malaysia or Vietnam. Enough for my emails, whatsapp, occasional web browsering. Doesn't seem a bad deal. I think those that want a subsided jesus phone with the payment rolled into the monthly or insane amount of data are the ones paying $60+ month.
- tyingq 9y ago
  The picture says $9, but the actual price is below that...$12.99. Confirmed by adding to the cart.
  - sitepodmatt 9y ago

foobarbazetc 9y ago

Mergers rarely work out. Even then, Sprint would somehow end up running the merged entity due to SoftBank ownership (?) so they’ll have more spectrum but the same everything else. This might sort of work if T-Mobile gets to run the thing.

nihonde 9y ago
My understanding is that SoftBank has been very unimpressed with Sprint’s pre-acquisition talent and was set back by having to staff up with competent managers from outside. If that’s true, then I would expect T-Mobile’s team to have a decent chance post-merger and Sprint incumbents should be very worried about the purge. Edit: This article confirms my suspicions[1]. SoftBank appointed a Chief Strategy Officer to Sprint who I believe is looking to arrange a best-case exit for SoftBank after the leadership in Kansas completely failed to step up. Also, SoftBank has always wanted TMobile as part of their original strategy, but the Obama administration blocked them in 2014. [1] https://www.bizjournals.com/kansascity/news/2017/06/06/sprint-chief-strategy-officer-yuriko-ishihara.html https://www.bizjournals.com/kansascity/news/2017/06/06/sprin...

skrebbel 9y ago

> I think this overall is good for consumers, and good for business It's an oligopoly in a market that does not expand much anymore. So the only way what you write can be true is if the combination is going to be awful bad for business for the other two telcos. Is that what you mean?

mmcconnell1618 9y ago
An interesting fact about Oligopolies is that they often degrade into very low margin businesses. Price collusion is one way companies attempt to counter this trend. For example, OPEC is legal price collusion of oil producers to keep margins as high as possible. Price collusion is not legal in the US but some industries (i.e. airlines) have virtual collusion because they move prices in lock-step. In some ways, the US mobile phone business is like the airlines. When one carrier offers an "unlimited" plan at a specific rate, the others rush to offer something similar. This virtual price collusion falls apart when one of the companies in the oligopoly gets greedy (they almost always do). Downward price pressure is created when one company is willing to operate on lower margins short term to take market share from the others. Lower prices are good for consumers. No small company can afford to enter the market because the barriers to entry are expensive and the margins are low. The existing carriers end up in a race to the bottom that resembles a perfect competition market. The risk is that one of the companies will become large enough to become a monopoly or near monopoly and gain pricing power to raise prices without consequences.
- jordanb 9y ago
  > An interesting fact about Oligopolies is that they often degrade into very low margin businesses If the oligopoly fails, then the result will be low-margin businesses for everyone due to market forces. If an oligopoly is successful then tautologically the participants won't have low margins because they will be able to suppress what JP Morgan called "ruinous competition" between them.

dsr_ 9y ago

One of the reasons that Sprint is undercapitalized is that for the last six years, "everyone" has assumed that they will merge or otherwise be acquired. Putting more money in is only interesting to keep Sprint going until that happens. It's a self-fulfilling prophecy.

axaxs 9y ago

TMobile doesn't need Sprint. They've been growing great and adding users for years, and just bought nearly all of the 600mhz spectrum. Sprint has, by any objective metrics, the worst coverage and speed. It had been an awful company who keeps taking wrong steps, is outdated, and not making much investment. I'd rather the merger not to happen, as competition is good, TMobile doesn't need Sprint, and Sprint by some miracle still has a fair amount of customers.

Aloha 9y ago
Sprint is well setup spectrum wise for densification in urban areas with all the 2.4 GHz spectrum they have (from Clearwire) - if you look at eithers coverage map compared to say, Verizon, neither has wide area rural coverage worth writing home about
- axaxs 9y ago
  Yes, and have already said prior their plan is microcell deployments. I happen to believe that would be a costly mistake, compared to say, 600mhz blasting far distances.