... and Sprint can't secure full ownership of clearwire without more than half the vote of the minority shareholders... which sprint clearly doesn't have.
In a stalemate like this, the bidding always escalates... which is quite evident by the fact that the dish bid is reality and clearwire's minority shareholders overwhelmingly hate Dan Hesse with a passion.
Any statements to the contrary are pure propaganda.
I think minority blocking is what DISH is up to. Son has already played his hand and DISH knows all his cards. Not a penny more than $2.97. Dish will go hostile at $3.30 and get the 25% that the other two big holders don't own. They will have a combined permanent block of any CLWR/S deal. CLWR will have to either invoke the poison pill, or allow DISH their hostile acquisition of the shares. CLWR will have to pay the breakup fee and will be less viable as a going concern. Sprint will also be less viable as a going concern without a 4g network and without CLWR, Son will likely back out and S will be in deep doo doo. If DISH does in fact own CLWR debt, Sprint ain't getting CLWR spectrum at auction. All of this leads me to the conclusion that S will offer 1 share of S for 1 share of CLWR. If not, it may be the end of Sprint as we know it.
Sentiment: Strong Buy
Devil's advocate opinion: S-SB does not need all of CLWR for the fattest pipes in the land. IMO, if this M&A does not work, a CLWR bk is on the table. The question becomes, "In a bk who wins?" As I read those tea leaves, S-SB will get spectrum & Dish will get spectrum via DIP. Will the common shareholders get more value that way? After that happens S-SB + T-Mob is in play because DT wants out. More spectrum falls to SB-S. The FCC wants more competition to reduce the influence of the T&VZ duopoly. Yesterday at CES Julius Genachowski called it a duopoly too...
That's not much of a devils advocate opinion is it?
For the next five years+ nobody will use all of Clearwire's spectrum and any operator that will deploy is planning to do so starting out with metro hot-zone coverage that then would expand deeper and further out. Deeper in density as needed to supply the urban and usage corridor needs, out into the suburbs as that capacity is needed or as the shift in demand requires.
The best way to use the 2.6GHz in order to make a profit is as, in the terms of the ITU, an 'extension band' that grows to higher density more in an organic fashion.
We may see waves of deployments: first wave is just the core metro areas, traffic corridors, airports, etc. That is all that Clearwire's current plan entail.. a mere 5,000 base stations. SB-Sprint may expand that to 10k or even 20,000 while remaining focused on the dense areas because that is where they can deliver the most bang for their bucks. As Sprint further brings up the rest of their networks into the 21st century alignment, and the market is converted toward higher bandwidth and video services, they should be in a favorable cash-flow and efficiency (profitability) position to expand the use of 2.6GHz into 'massively microcell' similar to what Softbank is doing in Japan. The reason they may not go there in one fell swoop is because the market needs to be grown into and this is not Japan... the country is very much larger and thinly populated outside of the major metro zones. Softbank has been working on their deployment strategies through development and acquisitions for 3-4 years. Given the further along maturity of the Japanese market, higher density and need to bring along networks in due course, SB-S is 2-3 years behind Japan in order to develop in an orderly yet still market-meeting or leading effort. For a while, Sprint still needs to play Doctor to their own networks and take on challenges but also be prudent in how they deploy.
Much of the market is device and consumer habits driven such that there is a 18-24 month lag between when a plethora of hot devices is available and the markets have turned red hot. The TD-LTE devices will start hitting a stride just starting in the middle of this year. Because of the shifts and major deal making, the prime markets won't likely develop until 2014. That will also be around the time Verizon and other competitors will have their new AWS LTE networks online and pushing into the market with a flurry of video services and still higher bandwidth. So long as SB-S is along in reasonable proximity of that timing, they will be riding the next wave of market development along with the leaders. of course, 'fake it until you make it' will be seen -- just as Sprint pre-sold LTE devices for the first networks that were in early stages of deployment, they may well prime the marketing pump ahead of actually 'prime time' availability.
I think Clearwire is being used as a pawn in this backroom deal of Dish and Sprint. Dish wants to pay $2.2B for 11.2B MHz-POP of Clearwire’s prime spectrum which only amounts to $0.19 MHz-POP. Let say, Sprint agrees and Dish buys the rest of minority shares for $3.30 since you are all so eager to support Dish. Now SB-Sprint and Dish own the entire Clearwire spectrum at $0.19/MHz/POP, a great bargain while Sprint didn’t have to spend a dime on minority shareholders. I think many of you are missing the point that this seems more like a con job that cooked up between them.
BJ - Perfectly said. Sprint presently has a serious network problem - slowest 3g network in the USA per PC MAG testing last year and certainly not enough LTE spectrum to move all their 3g data onto LTE. They must have CLWR and in my opinion to have the option to offer unlimited 4g LTE data plans as they cannot compete with ATT and VZ on pricing for the same 2g of LTE data per month and survive even a year as I see it. What would be great to hear from Dish would be "A Sprint bankrupcty would be perhaps constructive to this battle for CLWR".....LOL
without Son sprint would go down the Tube. Dish would now step in and make the play for clwr and Sprint all in one package deal before the BK courts seen a fileing.
The main thing to keep in mind what will be the lowest % son will come in at if the FCC and Gov. holds to that Magic 25% number on the Books.
Even with a break up fee Sprint has to much debt to take clear out even at $2.90 that is why it all depends on being approved. Dish has now let it been know they are in the shadows and waiting with time on their side and that is something Sprint does not have.
Now had Sprint made their move for CLWR before the Son deal they not be in this mess and everyone would have known it was going to happen but to many cards fell to soon.
So when you wake in the morning and look out the window don't let the Son Blind You !
Netwrok Vision is taking care of any performance issues for Sprint even w/o the inclusion of the CLWR spectrum. That spectrum is pretty #$%$ - doesn't propogate well at all. It is ONLY valuable for cellular if it can be paired with 800 MHz and 1.9 GHz spectrum that propodates much better.
Don't overestimate the value of CLWR's spectrum. It is pretty worthless for cellular all by itself.
It is a game of hardball. Sprint is currently paying $10 billion for the 37Mhz of Prime Spectrum (the free and clear stuff licensed from the FCC). The other spectrum is fragmented ownership, has issues, has high carrying costs and needs to be renegotiated from thousands of parties every so many years.
Dish wants to purchase that prime spectrum for 2.2 billion dollars. Sprint should offer $2.5 billion for that spectrum if this takeover agreement falls apart. Cheaper than paying $10 billion.
Also CLWR shareholders do not have anywhere to turn. DISH WILL not PAY $3.30 for 25% of CLWR just to hold those shares and ultimately face bankruptcy if CLWR is unable to pay its bills. It is take 2.97 or get nothing.
I think that Sprint is making a mistake. Verizon got prime spectrum (low frequency) from the cable companies for
"sprint should offer $2.5 billion for that spectrum if this takeover agreement falls apart. Cheaper than paying $10 billion".
I think that is a great idea that would point out how silly the dish proposal is. If the board accepted that offer, sprint coould then sell their 51% stake, and then abandon clearwire as a supplier. What then would clearwire be left with?
Yup common sense plain and simple...I have the noobs on ignore now and board is quiet again for me...man it gets noisy w/BS in these situations but their is no doubt in my mind as Joan Lappin said the Fat Lady has not even entered the dressing room let alone started to sing here...long and staying that way all the way to June if need be..better for my taxes anyway. Peace and GL to you and thnx for your reasonable and well thought out posts.