Sprint and T-Mobile in talks

[mmaldin]

Sprint, T-Mobile chatter signals weakness MarketWatch First Take - MarketWatch

[papped]

I'd take it more seriously if this hadn't surfaced before a long time ago and did not pan out...

[josh05]

This is true but ironic considering that Sprint's network value is $13.9 billion, whereas T-Mobile's network value is $15 billion.

Posted from my CrackBerry at wapforums.crackberry.com

[Gawain]

Considering that every one of their MSAs overlap, even if they wanted to, I really don't see how regulators would allow an acquisition. Deutsche Telekom can't buy Sprint because of Sprint's Tier 1 backbone. Sprint is short on cash, deep in debt, and owns 55% of Clearwire who will probably have to liquidate. I think these rumors are floated by people that think this would provide a boost to Sprint.

If DT is really interested in getting some quick cash out of T-Mobile USA, they should bring in a partner for the entity and run it the way VZ runs VZW, but in partnership with Vodafone.

Honestly, I think Sprint's best days lay ahead, but they have put too many complexities in their model. A merger with T-Mobile would put the shop in a total tailspin...

[cheech4]

Originally Posted by Gawain

Considering that every one of their MSAs overlap, even if they wanted to, I really don't see how regulators would allow an acquisition. Deutsche Telekom can't buy Sprint because of Sprint's Tier 1 backbone. Sprint is short on cash, deep in debt, and owns 55% of Clearwire who will probably have to liquidate. I think these rumors are floated by people that think this would provide a boost to Sprint.

If DT is really interested in getting some quick cash out of T-Mobile USA, they should bring in a partner for the entity and run it the way VZ runs VZW, but in partnership with Vodafone.

Honestly, I think Sprint's best days lay ahead, but they have put too many complexities in their model. A merger with T-Mobile would put the shop in a total tailspin...

where are u getting ur info???? Sprint has less debt than verizon, 20billion in debt which is less than half of what Verizon has with them sitting on 56 billion in debt and AT&T with 60 billion... plus Sprint has 6 billion in cash reserves...are you making stuff up?

[Gawain]

Originally Posted by cheech4

where are u getting ur info???? Sprint has less debt than verizon, 20billion in debt which is less than half of what Verizon has with them sitting on 56 billion in debt and AT&T with 60 billion... plus Sprint has 6 billion in cash reserves...are you making stuff up?

Not making anything up. Your debt numbers are out of the context of the other numbers you're ignoring:

Sprint:
Market Cap: $13.9B
Profit Margin: -10.64%
Operating Margin: -1.63%
Return on Assets: -0.62%
Return on Equity: -21.23%
Net Income (ttm): -$3.46B
Quarterly Earnings Growth (yoy):
Cash (mrq): $5.5B
Plus, two consecutive quarters of subscriber growth, after continuous losses since the spring of 2007.

VZ (the operating parent of VZW):
Market Cap: $103.3B
Profit Margin: 2.39%
Operating Margin: 17.42%
Return on Assets: 5.19%
Return on Equity: 11.95%
Net Income (ttm): $2.55B
Quarterly Earnings Growth (yoy): 146.9%
Cash (mrq): $7.2B
Continuous growth in wireless sector, growth in FiOS sector.

AT&T
Market Cap: $170.66B
Profit Margin: 15.98%
Operating Margin: 15.75%
Return on Assets: 4.56%
Return on Equity: 18.14%
Net Income (ttm): $19.8B
Quarterly Earnings Growth (yoy): -60.8%
Cash (mrq): $1.4B

Not to mention that AT&T and Verizon each have gross revenue that is more than three times Sprint's revenue.

Now, look at Clearwire, which Sprint owns 55% of, merged its 4G licenses with (Xohm):
Market Cap: $1.31B
Profit Margin: -87.54%
Operating Margin: -363.58%
Return on Assets: -11.34%
Return on Equity: -33.76%
Net Income (ttm): $-487.44M
Quarterly Earnings Growth (yoy): n/a
Cash (mrq): $1.74B

Source is the Key Statistics section on Yahoo! Finance. Sprint hasn't been able to clear its books from the Nextel merger and that was 7 years ago. Financially speaking, Sprint cannot afford to buy T-Mobile USA. They have nothing to leverage. The market overlap provides no benefit.

[bllackkman]

Originally Posted by Gawain

Not making anything up. Your debt numbers are out of the context of the other numbers you're ignoring:

Sprint:
Market Cap: $13.9B
Profit Margin: -10.64%
Operating Margin: -1.63%
Return on Assets: -0.62%
Return on Equity: -21.23%
Net Income (ttm): -$3.46B
Quarterly Earnings Growth (yoy):
Cash (mrq): $5.5B
Plus, two consecutive quarters of subscriber growth, after continuous losses since the spring of 2007.

VZ (the operating parent of VZW):
Market Cap: $103.3B
Profit Margin: 2.39%
Operating Margin: 17.42%
Return on Assets: 5.19%
Return on Equity: 11.95%
Net Income (ttm): $2.55B
Quarterly Earnings Growth (yoy): 146.9%
Cash (mrq): $7.2B
Continuous growth in wireless sector, growth in FiOS sector.

AT&T
Market Cap: $170.66B
Profit Margin: 15.98%
Operating Margin: 15.75%
Return on Assets: 4.56%
Return on Equity: 18.14%
Net Income (ttm): $19.8B
Quarterly Earnings Growth (yoy): -60.8%
Cash (mrq): $1.4B

Not to mention that AT&T and Verizon each have gross revenue that is more than three times Sprint's revenue.

Now, look at Clearwire, which Sprint owns 55% of, merged its 4G licenses with (Xohm):
Market Cap: $1.31B
Profit Margin: -87.54%
Operating Margin: -363.58%
Return on Assets: -11.34%
Return on Equity: -33.76%
Net Income (ttm): $-487.44M
Quarterly Earnings Growth (yoy): n/a
Cash (mrq): $1.74B

Source is the Key Statistics section on Yahoo! Finance. Sprint hasn't been able to clear its books from the Nextel merger and that was 7 years ago. Financially speaking, Sprint cannot afford to buy T-Mobile USA. They have nothing to leverage. The market overlap provides no benefit.

A merger is not the same as a buyout right??

[lnichols]

Originally Posted by cheech4

where are u getting ur info???? Sprint has less debt than verizon, 20billion in debt which is less than half of what Verizon has with them sitting on 56 billion in debt and AT&T with 60 billion... plus Sprint has 6 billion in cash reserves...are you making stuff up?

Sprint is required to keep so much in cash reserves so all of that cash is not at there disposal. If the reserves drop below a certain amount they default on there bonds.

As for this deal, if Sprint buys out T-Mobile it sucks for me because I want to switch to T-Mobile this summer and I think there network strategy of use HSPA+ now and migrate to LTE when the technology is mature is superior to Sprints lack of a "Clear" strategy. WiMax needs to be abandoned. I hope that this is a partnership with T-Mobile getting spectrum for LTE or the two building a joint LTE Network in the future. Just don't let Sprint's incompetent management team helm whatever it is.

[Gawain]

Originally Posted by bllackkman

A merger is not the same as a buyout right??

No, there's always one party "acquired" in a merger.

[cheech4]

i dont see debt numbers, i see percentages and profit margins and market caps. where is the amout of money in debt.

[Gawain]

Originally Posted by cheech4

i dont see debt numbers, i see percentages and profit margins and market caps. where is the amout of money in debt.

I never disputed your debt numbers in terms of dollars. They were right. AT&T's $60B against a valuation of $170B is a better position than most people have with their mortgages. Same with VZ. I was pointing out that Sprint's $20B is far more precarious due to all those other numbers you are apparently either choosing to ignore or do not to understand versus the higher dollar debt of VZW and AT&T.

If you can't see how Sprint's debt, being higher than their market cap (essentially the value of the whole company), gives them limited-to-no-options in terms of acquiring another company (especially given their ownership of Clearwire), then the issue to you is essentially moot.

It's fine to talk all about the diverse technology and challenges, but in the extra large corporate environment the first and last consideration is this: M-O-N-E-Y. If that doesn't make sense, the rest is meaningless.

[cheech4]

Originally Posted by Gawain

I never disputed your debt numbers in terms of dollars. They were right. AT&T's $60B against a valuation of $170B is a better position than most people have with their mortgages. Same with VZ. I was pointing out that Sprint's $20B is far more precarious due to all those other numbers you are apparently either choosing to ignore or do not to understand versus the higher dollar debt of VZW and AT&T.

If you can't see how Sprint's debt, being higher than their market cap (essentially the value of the whole company), gives them limited-to-no-options in terms of acquiring another company (especially given their ownership of Clearwire), then the issue to you is essentially moot.

It's fine to talk all about the diverse technology and challenges, but in the extra large corporate environment the first and last consideration is this: M-O-N-E-Y. If that doesn't make sense, the rest is meaningless.

Oh i agree its the Money. Sprint cant afford to buy t mobile. And even if they can i still think it would be a terrible idea currently. And if dueche telecom does sell Tmo usa to Sprint they want 50% control of the new entity. that itself it outragous, i honetly dont think Sprint is hurting that bad to have that happen.

[K Bear]

DT has wanted to deal Tmo USA for quite a while. A merger with Sprint would help make the transition to LTE much easier and would help with T-Mobile's horrible rural coverage.