Attached to this posting are the slides I used today during my portion of the T-Mobile External Affairs Headliner Series presentation. I’ve also attached John Pestle’s slides.
We hope you find them useful.
Kramer’s T-Mobile Headliner Series Slides
Pestle’s T-Mobile Headliner Series Slides
John Pestle of Varnum and I have been invited to speak on this month’s T-Mobile’s National External Affairs Headliner Speaker Series. This is a monthly conference call/webinar with hundreds of internal and external T-Mobile executives, managers, line-level staff, and outside contractors.
The title of our lecture, thought up by T-Mobile, is “If the Tower Doesn’t Grow, Can Municipalities Say No?”
The conference call is scheduled for Wednesday, April 25th at 11am PST/2pm EST.
If you’re invited, you should already have the call-in information. If not, you’ll have to contact External Affairs to get it.
This should be fun! I have lots of slides to share.
Heck, I’ve always wanted to be a headliner!
(Added 4/23 at 8:50 a.m. PDT: I’ve received several questions asking if non-T-Mobiler’s can sit in on the call. The answer is that I wish I could say yes. This is a closed webinar, so you’ll have to ask your contact at T-Mobile External Affairs whether you can join in. -jlk)
Okay, it sounds wild, but let’s look at this for a bit…
Sprint has committed $15B to Apple in connection with securing rights to market the iPhone to Sprint’s subscribers (let’s not talk about the newest Apple product, the iHeatingPad). That’s a lot of cash, and I’ll bet that Apple’s contract leave virtually no room for Sprint to get out from under the weight of an 800 pound Apple.
At the same time, the $9B Sprint was expecting from LightSquared seems to drifted away. This raises very serious questions about the future of Sprint’s touted Network Vision upgrade. As a result, Sprint’s plans to shutter some 30,000 cell sites, relying on the Network Vision project to make it possible…must have dropped to ‘maybe’ status, too.
Clearwire. That word has turned into a blackhole of cash for Sprint, and Google just helped further devalue Sprint’s, ah, majority investment by dumping the Google-held shares at a 90% write off. WiMax is not Sprint’s path forward–LTE is. Clearwire may be too late to Sprint’s party.
Sprint’s Board of Directors last month vetoed Dan Hesse’s plan to buy MetroPCS (for a 30% premium, no less). That puts Dan Hesse’s future outlook at Sprint at a 30% deficit (others say that number is even worse). Will there be new blood on the head of the pin, much less new confusions over the direction the pin is pointing? Hey, how about T-Mobile buying MetroPCS?
This month, Sprint seems to have tried…and failed…to get a network sharing agreement with T-Mobile, according to the Wall Street Journal. I guess that shots a hole in my idea about a SprinT-Mobile merger.
Let’s not forget the grandest of Sprint’s Grand Experiments: Nextel. Oh, you want to forget about that? Likely Sprint does, too.
With research firm Sanford Bernstein dropping its rating on Sprint, citing that Sprint might visit BK land, the Bad News Band keeps marching on. For a thoughtful look at this particular issue, see the SeekingAlpha story of March 20th by clicking here.
Now let’s consider Apple.
Apple has attained the status of a ‘mythical creature’ that can seemingly devour all that blocks it path.
Apple has been fanatical about controlling, to the n-th degree, every element of its users experiences with all of the Apple devices. It controls the look and feel of the user experience, and via the App Store all of the applications on iPhones that have not been subject to a jailbreak, as well as iPads of various operating temperatures.
It must peeve Apple that it decided to confine its iPhone and iPad devices originally on an exclusive basis to AT&T to run on that carrier’s less-than-robust and less-than-adequate-capacity network, and one that actually gave up spectrum in the failed T-Mobile love affair.
Now, at least, Verizon subscribers have a better chance at being able to enjoy close to 3G speeds with their iSomethings.
Oh, yes, there’s that cash reserve thing for Apple. It’s sitting on more cash than the U.S. Treasury, and since last Summer it has been the most valuable company you’ll find in the U.S., and maybe anywhere in the entire galaxy.
If Apple thinks about it, it can have its cake and eat it, too: Buy Sprint, fund and complete Network Vision, deploy 4G at real 4G speed, and dump all of the Sprint phones save for Apple iSomethings. Using the software defined radios of Network Vision, Apple can actually build a wireless network that is optimized for data (but still including the voice app that defines LTE). Siri may be the first step to Skynet, albeit with a programmed sense of humor. (How much wood can a woodchuck chuck? See here.)
For Apple, a Sprint purchase would yield it monthly cash flow that can be put back into expanding and optimizing the “Apple Wireless” Network Vision. And given Sprint’s majority ownership in Clearwire (and the 106ish MHz Clearwire controls in the U.S.), Apple would have a real playground to expand data capacity and speeds.
Maybe Apple might make apply the principles of the iTunes Store to Sprint to shift the marketing of Sprint services to the faceless online monolith. Buy a phone and activate service online. Forget about pins dropping.
It just seems right for Apple to continue its quest to control everything its users see and do with the iSomethings now and in the future by controlling its own data delivery network. At the same time, it can keep feeding iSomethings to Verizon, AT&T, and any other carrier that can’t afford to be left in Apple’s iDust.
With the passing of Steve Jobs, the direct minutia-level control he seemed to exert on Apple (at least according to Isaacson) has also passed. This may free up the current management of Apple to take the leap (no, not Leap Wireless) to controlling even more of the user experience, but from a new distance, all without asking “WWSD?”
Of course, Apple might buy T-Mobile instead–or as well–and do more or less the same thing, but that’s a thought best left for a future post.
As you likely know, the NTIA’s Assistant Secretary for Communications and Information, Lawrence E. Strickling gave LightSquared a big, fat, wet Valentine’s day kiss when he wrote to FCC Chairman Genachowski saying, “…we conclude that LightSquared’s proposed mobile broadband network will impact GPS services and that there is no practical way to mitigate the potential interference at this time.”
You can read the full letter, which goes downhill from the quote above, by clicking on this link: NTIA Letter to FCC Regarding LightSquared: Feb. 14, 2012.
While everyone else is talking about LightSquared, I’m wondering about the impact of the likely LightSquared disappearance from the arena on Sprint. Just last June, Sprint and LightSquared announced that they had entered into a 15-year agreement for Sprint to promote LightSquared as its 4G solution (hey, does anyone remember a company called ClearWire who was promoted by Sprint to be its 4G solution? I’m just ask’n…).
Under the Sprint deal, LightSquared was to pay $9 billion dollars and give Sprint another $4.5 billion in credits for LTE and satellite services. Shortly thereafter, Sprint kicked the Network Vision project into high speed.
Side note 1: Network Vision, for those of you who have not yet seen the vision, ahem, is Sprint’s project to replace its BTS cabinets that do one thing on one band with shiny new BTS cabinets that can be easily adapted to provide multiple services on multiple bands at the same time. That’s actually a smart thing from an engineering perspective, but it sure looks like Sprint was betting on LightSquared’s payments to fund a good portion of Network Vision.
Side note 2: The Network Vision project is connected with Sprint’s recently-announced plan to shutter 30,000-ish of its current leases as the new multiband BTS cabinets go in. Shuttering that many site leases should save Sprint something on the order of $400 million per year, and make cell site landlords wary of entering into new leases that don’t have early termination fees (huh? Your lease doesn’t? Too bad; so sad.)
So, what’s next for Sprint? Certainly it has wisely given up on WiMax as a real, long term 4G solution. It looks like everyone agrees that LTE is the real answer, so the sinking of LightSquared’s ship is hardly likely to re-float ClearWire’s boat in Sprint’s eyes (or any other sets of eyes for that matter). Since Sprint recently missed out on the “Buy Your Next Band From The Cable TV Guys” deals, its even farther down the spectrum rabbit hole. Sprint needs frequencies, and it needs them last week.
This brings me full-circle back to an earlier blog post, from last September, when I mused on the idea that Sprint and T-Mobile would make a mighty fine look’n couple, and I even worked up a possible wedding announcement:
See: SprinT-Mobile?
T-Mobile has kept a nice dowry of cash (and better, spectrum) from when the DOJ forced AT&T to leave T-Mobile at the alter. So like Sprint, T-Mobile has a pressing need to get married. If not to each other, then to others, but marriages are on the horizon.
See you at the wedding(s). I’ll be at the bar.
Jonathan
So T-Mobile, recently left at the alter by AT&T, is now looking for $9B to build out a LTE network that can compete with AT&T.
T-Mobile has a great start towards its goal when you consider that AT&T gave it $4B as a parting gift. If you have some loose change or small bills, please drop it in Carly’s cup. Heck, all she needs is another $5B. Easy!
$9B’s a lot of investment money simply to split the market even more than it is, today. It’s also interesting that T-Mobile seems determined to join the rest of the world by going to 4G via LTE rather than via its current industry-isolating path of HPSA+ (also known as “it’s 4G if we say it’s 4G”).
I continue to believe that T-Mobile will either join forces with Sprint (can you say “SprinT-Mobile”?) or T-Mobile will acquire one or several smaller regional carriers. How about “Hello…Hello…Hello” for example. A dark horse: Maybe Deutsche Telekom, T-Mobile’s German parent will sell off its entire worldwide wireless network to some small country…or maybe to Microsoft.
Only time…and money…will tell.
AT&T’s intended takeover of T-Mobile was supposed to give AT&T access and control of badly needed spectrum. The demands on spectrum are growing faster than Apple can sell iPhones. Unfortunately, while AT&T was busy trying to consume the 4th largest wireless provider in the United States and fighting with the Department of Justice, Verizon was quietly moving to buy up the undeveloped spectrum held by the major cable providers (a completely different bedtime story for the DOJ to dream about…as they apparently are starting to do).
The result? Verizon’s spectrum purchases have gobbled the available spectrum that might have otherwise been available for an AT&T purchase.
T-Mobile, the long-suffering ‘we don’t have enough spectrum’ player, also missed out on the opportunity to buy spectrum from the cable providers.
Both AT&T and T-Mobile are desperate for spectrum, so what are they to do?
The DOJ, as we have all learned, has a big problem when the number 2 and number 4 providers attempt to merge (something having to do with a little thing called Antitrust).
Might the next baby step for AT&T be to acquire MetroPCS? Maybe that’s T-Mobile’s next bid, too.
It makes sense for both AT&T and T-Mobile to be interested in acquiring MetroPCS because it has a nationwide PCS footprint that is only growing with its all-you-can-eat, no contract approach.
Or maybe the next step is more of a LEAP (Wireless, that is, which has been rumored to be an acquisition target).
Two things are for sure: First, AT&T needs more paired frequencies, and they need them yesterday Second, T-Mobile either has to mate with one or more smaller regional carriers, or try mating with Sprint. AT&T’s parting gift to T-Mobile of $4B for the failed marriage would make a lovely trousseau.
AT&T announced today that it has given up on merging with T-Mobile, and will pay T-Mobile the tidy sum of $4,000,000,000 (yeah, that’s $4B) as a parting gift.
Look for T-Mobile to either buy some second tier carriers, to perhaps do a deal with Sprint (see that posting here).
Five days ago I wrote about Sprint effectively casting off Clearwire to sink or swim on its own. Perhaps I could have said, “sink or sink.”
Yesterday, October 11th, David Sterman (writing at SeekingAlpha.com) strongly suggested in a well-reasoned piece that Clearwire could go bankrupt by next year.
Mr. Sterman’s arguments about a possible (if not likely) Clearwire bankruptcy ring true in my ears. He said in part,
In 2011, things got messier. Clearwire had always counted on generous financial support from its largest customer, Sprint Nextel (NYSE: S). (Sprint has made serial capital injections in Clearwire and now owns 48%, controlling 54% of the voting stock.) But Sprint has begun to express regret about pinning its 4G hopes on Clearwire’s network. Once Sprint started to make its own 4G network — using the stronger LTE technology — it was almost a matter of time before it announced a public divorce. In a meeting with analysts on Friday, Oct. 7, Sprint said it would soon stop selling phones that work in conjunction with Clearwire’s 4G network. This caused Clearwire’s stock to fall 30% that same day. And the selling may just be beginning…
Mr. Sterman’s focus on the numbers tells the test of the (sad) story:
Where does this leave Clearwire? The company had 7.7 million customers at the end of the second quarter, of which 80% came through Sprint’s enterprise-level relationships. Clearwire has also been pursuing retail customers through its direct sales efforts (at a cost of about $300 per subscriber in marketing expenses). This summer, management spoke of a full-year target of 10 million customers. But now, after Sprint’s announcement, it’s not clear how Clearwire intends to draw the additional 2.3 million customers. In addition, the retail wireless business is fiercely competitive, which is why other Clearwire partners such as T-Mobile are also looking for an exit strategy.
Well, at least Clearwire’s frequencies will have some value in a buy-out before BK, or to an auction winner in BK.
Go read Mr. Sterman’s post. Make up your own mind.
(Thanks for John Pestle, Esq. of the Varnum Law Firm for pointing me to Mr. Sterman’s article.)
I have to wonder whether the following might happen:
1. The Department of Justice is successful in its suit to block the proposed AT&T&T merger or AT&T gives up, pays T-Mobile the $6B cancellation fee; and then
(….hear in your mind’s ear the ethereal sounds of harps and chimes….)
2. King Deutsche Telekom–disappointed at the loss of suitor King AT&T–continues to peddle Princess T-Mobile as a bride for some other lessor noble suitor; and then
3. Prince Sprint steps up says to Princess T-Mobile, ‘Oh, please marry me, Highness!’; but at about the same time then
4. Prince Sprint suddenly remembers that he’s already married to an ugly wife, named Countess Nextel; and then
5. Prince Sprint calls the Royal divorce lawyers to rid itself of Countess Nextel (really, to profitably free himself of the Countess’s land sites and frequencies) to uses the divorce settlement to help finance the ‘reverse dowry’ it offered to King Deutsche Telekom); and then
6. Prince Sprint and Countess Nextel go their separate ways (likely some lesser suitor will step up to protect Nextel’s honor and propose marriage); and then
7. Prince Sprint and Princess T-Mobile wed uniting their lesser kingdoms into one land, and then
8. Many of Princess T-Mobile’s hand maidens (they’re called employees in T-Mobiledom) find themselves put out of the castle, while the lucky few other retainers are invited to pledge their allegiance the court contractors of Prince Sprint, but
9. The serfs (oddly called ‘subscribers’ for some strange reason) in the newly combined Kingdom of SpriT-Mobile see no difference in their lives. They continue to pay their monthly tribute to the Prince and Princess to be allowed access to the expanded lands of Kingdom and the privilege of communicating with other serfs of SprinT-Mobile, and serfs in the other aligned Kingdoms.
The new Royal couple might even have their own Royal Coat of Arms:
…and be known by the Hollywood name of “Sprin-Tee”!
One has to wonder when such a story might come true! For the meantime, this is just a fanciful parody. Yup…just a parody.
Attached to this post is the antitrust complaint filed today by the U.S. Department of Justice against AT&T Inc., T-Mobile USA, Inc., and Deutsche Telekom AG (T-Mobile’s parent).
Case No. 1:11-cv-01560, assigned to Hon. Ellen S. Huvelle
25 pages.
CLICK ON THE LINK BELOW TO DOWNLOAD THE COMPLIANT IN PDF FORMAT (about 1 MB)