It's been about 3 weeks since the I-Phone launch and some 4 months since the deal with Lightsquared...
... Sprint is getting a pretty clear view of how those 2 events are shaping up now.
Sure, the first week of I-Phone sales tells sprint almost NOTHING. There were a lot of people waiting for I-Phone and the initial "rush" of buyers says nothing about the comparative appeal of a 3G I-phone VS a WiMax Android.
But now that the initial rush is past, sprint should be getting an idea what the casual shopper is interested in when he comes into a sprint store... whether the apple phone really stands out enough to settle for a slower connection or whether there's a REASON why Samsung out-sold apple in the 3rd quarter...
... maybe what appears to be improving overtures toward Clearwire reflect a "same-store-sales" kind of bias toward 4G and speed... after all, there were a lot of reports of "bogged-down" I-phone performance following the initial launch.
Similarly, last summer's GPS interferance issue hasn't gone away at Lightsquared and now Mr. Falcone has taken to telling the ranking member of the Senate Judiciary Committee to take a flying leap when he asks about e-mails pertaining to the FCC's "rush job" of approving Lightsquared's network last January...
... obviously, there's a lot to hide in those e-mails... probably pay offs to government officials... or both the FCC and Falcone wouldn't be so dead set on not releasing them.
Meanwhile, the efforts of Harbinger investors to cash-out their assets in the fund without having to take Lightsquared stock as payment continues. At last count, redemption requests are close to $1.4 billion and rising...
... makes you wonder if Dangerous Dan Hesse has a little stock in Harbinger, doesn't it?
So now we're hearing that Sprint is including CLWR in it's "intentions" for the proceeds of bond issuance. Knowing how tight sprint is with cash right now, I don't believe for a minute that sprint's going to foot the whole bill.
I'd look for CLWR to raise it's capital from multiple sources... sprint, some new CLWR debt, vendor financing, and maybe stakes put up by various other wholesale customers.
One thing is CERTAIN, IMHO... Clearwire's resources and 2010-vintage infrastructure are just too valuable NOT to super-charge with LTE-Advanced. Nobody doubts that the only way to true, 100-megabit 4G within 3 to 4 years is VIA Clearwire and what they demonstrated in Phoenix and in Sweden with Ericsson...
... nobody else has has the resources to do it today and even if they did, they couldn't do it for 133 million POPs for just $600 million.
That will again lead to record sales numbers for those with networks that support TD-LTE. It may even be called 5G as a marketing gimmick if it is connected to a TD-LTE network. Again that will bump sales to record levels.
I think Stanton puts together the funding or partnering required to exploit TD-LTE.
Dish carries a market cap of around $10.5 billion, about a third of DirecTV’s and a sixth of Comcast Corp.’s (NASDAQ: CMCSA) and a tenth of Verizon’s. What Dish is trying to integrate — wireless spectrum, wireline broadband, video rental stores, video streaming, satellite subscriptions — could be a huge success or not. If the company appears to be making it happen, a buyout by a telecom compay — say, Verizon — could make a lot of sense. We’ll know the integration is not working, if Dish ends up selling its spectrum licenses. Those are the key to its grand plan.
Read more: Dish Network Stumbles (DISH, DTV, VZ, T, NFLX, AMZN, SATS, CMCSA) - 24/7 Wall St. http://247wallst.com/2011/11/07/dish-network-stumbles-dish-dtv-vz-t-nflx-amzn-sats-cmcsa/#ixzz1d3ZuzT6f
... over the weekend.
There were 2 things they told me in no uncertain terms in BOTH stores:
1. They are certain the AT&T/T-Mob merger won't go
2. They say that 90% of the people who come in are
looking for "unlimited, 4G" plans.
They shifted my thinking yet another notch toward the notion that there will be a limit to how well the I-Phone 4s will do until they start using 4G radios...
... and that as the initial rush of pent-up demand at sprint for the I-Phone subsides, WiMax sales will hold up "reasonably" well... I would say CLWR's net new subs in Q4 will be about 750,000 in Q4 then rebound back to 1.2 million in Q1.
In the second T-Mobile store, my looker bought a Samsung Galaxy S. For those not enlightened, Samsung sold more phones than Apple did in Q3.
They already have to manufacture equipment and phones for china mobile and all other tdd advance.
Vender sales guaranteed by CLWR equipment financing leverages the existing sunk R&D manufacturing cost and creates huge upside potentials for future sales.
Sprint just gets lucky in spite of shooting themselves in the foot (repeatedly), and if smart will secure their investment asap by funding CLWR upgrade/expansion. Much less cost than building their own (especially with vender equipment financing)
Besides, Sprint gets 50% of CLWR profits and stock appreciation.
Sprint share holders would clean out entire management and board to get CLWR back to original cost, let alone above it, and Sprints stock would soar also...WIN/WIN
The lack of a longer term agreement with Clearwire leaves a significant strategic void in Sprint Nextel's current fourth-generation (4G) spectrum strategy. In particular, Sprint Nextel has indicated its current spectrum position is sufficient only through 2014. Fitch expects a growing sense of urgency exists between Clearwire and Sprint Nextel to find common ground on a longer-term spectrum agreement. The memorandum of understanding for the companies to collaborate on the technical specifications for their respective LTE deployments appears to be the first step.
Clearwire's weak and uncertain liquidity position including funding for its LTE network remains a significant concern given Sprint Nextel's strategic ties with Clearwire. Sprint Nextel's current ratings do not consider any material capital contributions to Clearwire. Any future agreement with Clearwire for 4G spectrum and capacity that would require material cash contributions by Sprint Nextel for a joint LTE network build outside of current capital spending expectations would likely result in a ratings downgrade.
Sprint expects their cash flow to increase in 2014. There is the possibility that in 2014, Sprint may buy back some of the spectrum it contributed to Clearwire so Clearwire can start deploying their LTE - Advanced overlay network.
Spok, overlooked by just about everyone is the performance of Sprint's 550 million CLWR shares.
At a purchase price of roughly $9 BILLION in 2009 (?)for those shares at 19.00 per share, Sprint's current investment is worth about $1.1 Billion... nearly an 88% LOSS of value.
Why hasn't Sprint (Hesse) ever taken the approach "hey, we've got a $9 Billion stock investment, let's try to grow the value of that investment by HELPING CLWR in whatever way we can, and see that investment appreciate in value, and then we'll sell those shares and fund our debt, operational, or other expenses"
What company buys $9 BILLION of something, and then "HOPES it goes bankrupt"??? LUNACY is not the word, malfeasance, negligence, idiocy, etc. is more like it. Why have S shareholders allowed this (degradation of CLWR stock investment) to continue on Hesse's watch? Isn't this what shareholder lawsuits were made for??
Think about it, if Sprint actually COOPERATES with CLWR, and helps it, the share price of CLWR goes up, Sprint's equity position in CLWR increases, they show a quarterly GAIN on their investment holding (instead of the perpetual loss which impacts Sprint's EPS) etc. etc. etc.
Will someone email this message to Hesse?
What you say makes perfect sense in a perfect world. It's like the man said earlier, JDS, Hesse's superman ego won't let him share the spotlight w anyone. That Sprint presser was one of the dumbest, most ill-conceived presentations of all time, but it did accomplish one thing - we all got to see the real man.
Sprint only benefits 54% on the dollar in the appreciation of CLWR's shares.
However it can benefit much more by extracting value from CLWR via service agreements where Sprint gets hugely discounted fees for service. The danger of strategic partner investors is that they may never need or desire the investment to become profitable because they have other ways to benefit.
You are pandering to the GPS vs. LightSquared hype: LS has no legal obligation to release emails to a Senator who has no direct authority over FCC regulatory matters. If the Senator in the judiciary committee wants to hold hearings that require the documents, he can do so.. he is pussyfooting around. This is a democracy ruled by laws including those that bound Congress to pursue the responsibilities of committee actions. What the Senator has asked is for a company to disclose its communications without that being a legal requirement. And you are blasting Falcone for not doing so. OK, that is your opinion but it is within Falcone's legal right under the current circumstances.
So, let's get back to reality: What if LS did not exist? What if we woke up tomorrow and LS turned out to have been a plot on a movie we had seen and then dreamed about as having a weird impact on CLWR? Would anything have changed? Would Sprint have capital to invest more willingly into Clearwire? No. Would Sprint be able to replace the need for more mobile spectrum to help them cost effectively transition their existing networks to LTE? You may wish to think so but, no.
The major course of business of Clearwire, Sprint and Sprint+Clearwire has very little to do with LightSquared and as much to the benefit as as competition. The facts are that Clearwire direct sales suck the big one... the capital resources available at this critical juncture. The facts are that Sprint's course over the past several years have also depleted their financial resources to the point that it jeopardizes their ability to invest in all network development projects.. with those of other companies naturally at a lower priority than their own. The fact they own a good portion of Clearwire and benefit significantly from its WiMAX network is a saving grace... and it takes capital for that 'grace' to amount to more than warm fuzzy feelings. The fact is that LightSquared has a small amount of encumbered spectrum but a relatively large ability to access capital which both parties sorely need.
I think you are being a bit irrational in your views on LS.. It either doesn't matter because they are not going to be able to build, or they will kick in a mostly complimentary Mobile-satellite network and infuse very much needed capital. If Clearwire had gotten more going on their own some of the benefit of LS would not matter... but then Clearwire would be on the move to TD-LTE so it really would not matter in the overall picture.
Must be fun to point to a vaporware company as being the big bad meanie excuse.
... the senate and documents and legal obligations. Sure, everybody's within their rights but the more it escalates, the uglier it looks...
... and Lightsquared can't afford "ugly" when they're trying their darndest to hang onto their investors.
I realize the role L2 could play for sprint and the win-win, albiet a WEAK win-win, that the L2 deal presented. The problem is, there's been nothing but damage and delay since that L2 agreement was inked and anybody with any sense of what "populism" is knows how weak L2's hand is against a constituency as broad as GPS...
... as I've said, even if Lightsquared can eliminate 99% of the interferance with GPS, thousands of GPS constituents are going to rant about how somebody's grandma could be on the jetliner that goes down because of the other 1%.
The perception which was purposely created by Hesse, is that Sprint is/was kicking CLWR to the curb in favor of LS2. One was a company S owned more than 50% with an up and running network and the other maybe has network and is currently in a testing do-loop. LS2 is an unproven company; CLWR is a proven company.
Hesse never stressed the synergy between the two network providers. Hesse never stressed the benefits of an urban focused network and rural focused network. All Hesse did was defy conventional wisdom and logic by stating he wants to build an inferior FD-LTE network at a much higher cost than would be required for a superior TD-LTE network, with an unproven new partner that may never provide a useful network.
Hesse caused the precipitous drop in both companies stock... and I know LS2 did not cause the GPS problem, but it's there and it's all about perceptions.
Re: how to get a 5g tdd iphone for sprint (tdd-lte)) 16 minutes ago
china mobile type advanced tdd-lte apple i5 phones
speed of tdd-lte beta tested 100meg to 1000meg
(current fdd-lte is about 5 meg)
probably any advanced tdd-lte standard based phone
Re: apple 4g iPhone for china mobile 1-Nov-11 02:44 am
China Mobile and Apple talk 4G
By Erica Ogg Sep. 16, 2011, 8:05am PT No Comments
AppleThe chairman of China Mobile says he’s been talking with Apple about offering the iPhone and about 4G LTE technology. China Mobile is not yet a carrier of the iPhone, but it’s clear the two sides are talking and a deal could potentially be in the offing, considering Apple’s recent laser focus on China.
There is still no deal for the carrier to offer the iPhone, Wang Jianzhou told the Wall Street Journal. But the two are talking about 4G.
“China Mobile and Apple hope to find a solution for close collaboration” on the TD-LTE network and compatible products, Wang said in an interview in Dalian today. “We discussed this issue with Apple. We hope Apple will produce a new iPhone with TD-LTE. We have already got a positive answer from Apple.”
To be clear, TD-LTE is not the same LTE (subscription required) that AT&T and Verizon are deploying here in the U.S. The technology is slightly different, and it will require a device maker to put a separate radio inside the phone to work on the TD-LTE network deployed by China Mobile and a few other carriers, including Clearwire in the U.S. If Sprint were to go along with Clearwire’s TD-LTE plans, then the deal with China Mobile might lead to a 4G iPhone for Sprint too.
China Mobile wants the iPhone to add more subscribers and keep pace with competitor China Unicom, which does offer Apple’s smartphone.
Apple has been focusing its efforts on the Chinese market — with success so far. In its most recent quarter, Apple said it racked up more sales in the country than hometown favorite Lenovo had during the same time period.
Top Research And Analysis