Sprint Not Sprinting on Nextel’s Goodwill Value

Sprint Nextel Corp has announced that it may write down as much as $31 billion of goodwill currently recording on its balance sheet. This is due to that fact that Sprint Nextel’s evaluation of the real value of goodwill attached to the Nextel deal is far, far less than estimated.

From the 8K:

“Based on the work completed to date, Sprint Nextel will be Sprint Nextel 8K Notice of Possible Nextel writedown required to record a material, non-cash impairment charge that will represent a substantial portion, and potentially all, of the goodwill recorded on it balance sheet at the conclusion of the second test of the goodwill assessment.”

The write down hit will occur in and be reported in the 4Q08 results.

I’ll bet that things at Nextel are so scary that staff can hear a pin drop. Are lay off notices coming, too?

Attached to this message is Sprint Nextel’s 8K announcement:

Sprint Nextel 8K Notice of Possible Nextel Writedown


Manchester, Maine Town Meeting result: No Tower

This evening, the residents of Manchester, Maine voted at a Town Meeting to reject the proposed settlement with MCF Communications. At the same meeting, the residents voting also approved a moratorium on accepting new cell tower construction applications while the Planning Board reviews Manchester’s cell tower ordinance.

The likely result is that MCF will continue to pursue a remedy through the courts.

Click Here; to read a Kennebec Journal story on tonight’s proceedings.

For more on the background leading to this point, click on the MCF Communications tab below this message.


T-Mobile USA: Nearly 30 million customers

T-Mobile USA’s customer count increased by 951,000 during 4Q07. Of that number, 733,000 were new contract customers (as compared with pre-paid customers not on term contracts). T-Mobile ended the quarter and year with about 28.7 million subscribers. That followed a 3Q07 increase in subs of 857,000. The 4Q07 churn decreased to 1.8%.

Deutsche Telekom, T-Mobile’s parent, served about 120 million subscribers worldwide at the end of 4Q07.

BELLEVUE, Wash.– (BUSINESS WIRE) — T-Mobile USA, Inc. (T-Mobile USA), the U.S. operation of Deutsche Telekom AGs (Deutsche Telekom (NYSE:DT)) Mobile Communications business, today announced fourth quarter and full year 2007 customer results.

T-Mobile continues to drive year-over-year growth by pioneering innovation that matters to consumers, said Robert Dotson, CEO and President, T-Mobile USA. In 2007, we increased growth to over 3.6 million net new customers. myFavesSM was a major contributor to this growth, with 5 million customers at year-end using the service to make unlimited calls to the people who matter most to them. Part of this growth was also fueled by the debut of FlexPaySM, a new option in the market that opens up access to more attractive offerings for certain classes of customers. In 2007, we also introduced our revolutionary HotSpot @HomeSM service to rave reviews for how were opening up new value alternatives for land line customers all while we add outstanding call quality improvements in homes across America.

In the fourth quarter of 2007, T-Mobile USA added 951,000 net new customers compared to 857,000 in the third quarter of 2007 and 901,000 in the fourth quarter of 2006. Net new contract customer additions amounted to 733,000 in the fourth quarter of 2007, or 77% of total net new customer additions, compared to 557,000 or 65% in the third quarter of 2007 and 783,000 or 87% in the fourth quarter of 2006. Contract churn was 1.8% in the fourth quarter of 2007, down from 2.0% in the third quarter of 2007 and 2.1% in the fourth quarter of 2006. Blended churn, including both contract and prepay customers, was 2.8% in the fourth quarter of 2007 and down from 2.9% in the third quarter of 2007 and fourth quarter of 2006.

T-Mobile USAs converged device offering was significantly strengthened during the year with the successful launch of a number of converged devices such as the T-Mobile Shadow; the T-Mobile Sidekick iD, LX, and Slide; T-Mobile Wing; and the BlackBerry Curve the first converged device enabled for the new HotSpot @Home service. The fourth quarter of 2007 saw a continued strong demand for these converged devices.

For the year ended December 31, 2007, T-Mobile USA added more than 3.6 million net new customers, compared to 3.4 million net new customers added in 2006. Net contract customer additions in 2007 amounted to 2.7 million, 74% of the total customer additions in the year down from 83% in 2006. Contract customers comprised 83% of T-Mobile USAs 28.7 million customer base at the end of 2007, compared to 84% in the third quarter of 2007 and 85% in the fourth quarter of 2006.

T-Mobile USA will release fourth quarter and full-year 2007 financial results on February 28, 2008.


9th Circuit to T-Mobile: Your Mandatory Arbitration Agreement is Unconscionable

On January 22, 2008, the 9th Circuit Court of Appeals affirmed a lower court decision that T-Mobile’s arbitration agreement in its Washington State wireless contracts is tainted by substantive unconscionability and is not enforceable.

From the court:

“The issues on appeal are whether the arbitration provisions in Defendant T-Mobile’s service agreements with two of its customers are enforceable under Washington state law and, if not, whether the state law is preempted by the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1-16. After two consumers of T-Mobile’s cellular phone service brought a class action against T-Mobile in state court for breach of contract and violation if the Washington Consumer Protection Act (the “CPA”), Wash. Rev. Code § 19.86.010-19.86.920, T-Mobile removed the case to federal district court and moved to compel arbitration per its service agreements. The district court denied T-Mobile’s motion to compel arbitration, holding that the arbitration agreements were tainted by substantive unconscionability and thus were unenforceable. We conclude that the Washington State Supreme Court’s decision in Scott v. Cingular Wireless, 161 P.3d 1000 (Wash. 2007), establishes that T-Mobile’s arbitration provision is substantively unconscionable and unenforceable under Washington state law, and that there is no federal preemption in light of our decision in Shroyer v. New Cingular Wireless Servs., Inc., 498 F.3d 976 (9th Cir. 2007). We therefore affirm.”

Full Decision in Louden v. T-Mobile USA


Town of Manchester, Maine asks residents to approve wireless consent agreement and tower moratorium

The Town of Manchester, Maine will hold an open town hall meeting on January 29, 2008 to decide whether to settle a law suit brought against it by MCF Communications and also whether to adopt a “Tower Moratorium Ordinance” for six months.

The interesting feature of this story is that the elected officials are asking the community’s eligible voters to decide whether to settle the suit, rather than deciding it themselves on behalf of the Town. In an editorial published by an area newspaper, The Kennebec Journal, the editors recount the history of the suit, and talk about a proposed settlement:

“All could have ended right there, peacefully and relatively quietly. Manchester selectmen could have approved the consent agreement, the cellphone folks would have paid a portion of the town’s legal fees and other expenses and life would have gone on. A new cellphone ordinance could have been proposed and adopted.

Instead, town officials took a duck…”

…when the town decided to let the residents decide the issue.

Interesting reading, to be sure.


US Cellular sues Alton, Illinois

According to a published report:

11/20/2007: Alton, Illinois Planning Commission votes to approve 90 foot “stealth tower.”

11/28/2007: Alton’s City Council approves resolution in favor of tower.

12/19/2007: Alton’s City Council votes to deny application.

01/18/2008: US Cellular files suit in U.S. District Court for the Southern District of Illinois (Pacer Case No: 3:08-cv-00041-JPG-DGW)

Click Here to read the Complaint filed in federal court


T-Mobile Proposes PCS Bell Tower at Florida Church

T-Mobile is proposing a stylish new stand-alone Bell Tower to hide a new cell site at the Duncan Road Baptist Church. 430 N.E. Duncan Rd, in Blue Springs, Florida.

The Examiner newpaper in Eastern Jackson County has a story on the proposed site, and an interesting elevation illustration (artist’s rendering) of the proposed bell tower. Click here to read the story and see the illustration.

It’s common practice for wireless carriers to construct attached or detached bell towers to camouflage cell sites. The CellularPCS Gallery has many examples you can see by clicking here.