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Sprint Corporation Message Board

  • bjspokanimal bjspokanimal Oct 10, 2011 4:43 PM Flag

    Sprint Is Now in a Irreversable Vortex

    1. I-phone's up-front costs will require $billions
    before sprint gets any critical mass from
    I-phone subscriptions. The majority of those
    subs will come from existing subscribers so the
    cannabalization factor will be significant.

    2. Network Vision will end up requiring over $5
    billion in new borrowings. Credit agency down-
    grades to B or B- will shoot the cost of debt
    well over 12% interest and hammer sprint's
    income statement.

    3. Sprint must somehow juggle an I-phone induced
    surge in spectrum utilization with the need to
    free up anything more than a sliver of channel
    breadth for LTE. They'll have to get bandwidth
    from somewhere now that they've abandoned
    spectrum-rich clearwire and it'll cost them
    money they don't have to acquire it.

    4. Clearwire's 4G network has been Sprint's only
    growth driver until now. By telling the world
    that clearwire's 4G will be history, they're
    essentially shutting down that growth engine in
    favor of a high-cost, spectrum-hogging I-phone
    wing and a prayer.

    5. Sprint's only positive offering is the "promise
    of savings from network vision... which is
    offered up as though Verizon and AT&T aren't
    going to be upgrading and improving during the
    years it'll take sprint to do nothing more than
    match their cost structures under the very
    rosiest of scenarios.

    Sprint's only possible avenue for success was to make a cheap, $600 million upgrade to Clearwire with TD-LTE at 90mhz speeds and build network vision off of that foundation...

    ... now that Sprint has dissed Clearwire, look for Clearwire to start seeking value for it's immense assets... which will probably under-cut sprint's reliance on Clearwire's WiMax network long before Sprint can under-cut Clearwire's subscriber revenues.

    Spokanimal

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    • Before the vision was announced another 250mm but why focus on the 250 when the same words cost s 3 billions?

    • hesse_takes_it_in_the_spectrum hesse_takes_it_in_the_spectrum Oct 10, 2011 7:13 PM Flag

      If they sold off their CLWR stake today they would get $750M...Pizz in the bucket....



      jug

    • Seems to have slipped into a dragon's maw to me.

      D

      • 2 Replies to duncansfree
      • ... they aren't going to have the dough to redeem them if they're spending every penny they have on duplicating Clearwire's POPS...

        ... which means not only is their future B- credit rating going to drive the cost of their new junk bonds over 12% interest expense...

        ... it also means that their existing 7% bonds that mature next year will have to be rolled-over at 12% as well... if they can even find buyers in this market.

        The interest costs alone will eliminate their ability to compete with Verizon with discounted subscriptions. Sprint could likely be carrying as much as $25 billion in junk-bond debt 2 years from today and like Greece, they could be issuing debt just to cover interest on the debt.

        Even today, how many years has it been since sprint last made a profit?

        S

      • Question is what if any laws does Sprint break if they talk Clearwire down to a $1 or 50 cents a share and then back off their "go it my way with Vision Network" and instead make a take over move for Clearwire. This would be pure out and out manipulation on Sprint's part to destroy the value of a company (that it owns 54% of) specifically for the benefit of Sprint.

        As Spok says, Sprint going forward with it Vision Network plan is a non-starter simply because at the end of the day Sprint will not have the spectrum to compete with Verizon or AT&T.

        Its as if Sprint is a boat heading in the direction of niagara falls. Sprint owns the boat but the boat's captain is Clearwire.
        About a mile or two away from niagara falls, the Clearwire captain says we need to turn around and gun the engine (or give us 600 million) and we are out of here heading for calm waters. But Sprint says, "screw you Captain Clearwire. We are taking control of this boat and not changing course. We're heading straight for niagara falls.

        Guess we find out in a few weeks, or months if the good ship "Sprint" goes over the falls and everyone dies, or if by some miracle Sprint comes to its senses and lets Clearwrie back at the boat controls.

    • "Sprint is playing catch up, with half the spectrum of AT&T and VZW, a fraction
      of the scale and much fewer financial resources to remedy the situation. Even
      after the announcement today, the gap between Sprint and Verizon/AT&T in the
      4G world will be dramatically larger than the existing 3G gap. This bodes poorly
      for subscriber growth as the market shifts to 4G. It also casts doubt on Sprint’s
      ability to achieve the longer term margins it hopes to achieve"

      ... He pretty much makes my point. It's a vortex.

      S

    • good points, Spok, however, Teamrep's response to "other options" unless, i'm not reading it correct, it's going to be difficult for clwr with these "other options".

      maybe you can give better understanding.

      thanks.

      goos.

 
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