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Sprint Corporation Message Board

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  • bjspokanimal bjspokanimal Dec 8, 2011 8:07 PM Flag

    Hesse Finally Gets it: Unlimited 100mb LTE

    ... relative value and if I do my job right, PPS takes care of itself.

    I am NOT a trader or a momentum investor.

    I prefer Clearwire over sprint because Clearwire is the one with the valuable, scarce resource and they already have a 2010-vintage, network-vision-quality infrastructure in place...

    ... thus, CLWR could survive much longer as an EBITDA-positive, EPS-negative company than Sprint could and their valuable assets make them to "key" to fail... as their new deal with Sprint will attest to.

    I'm neutral on sprint at this price. I like sprint based on value and the fact that they are now being "strategically assertive" as they must to have a chance against VZ/AT&T... although Dan Hesse had to be drug kicking and screaming by James Nance to that way of thinking.

    The problem for sprint is that once the network vision dust clears, they'll be over $25 billion in debt with paper rolling over at more than 9 to 10% interest and I-phone STILL won't be EPS accretive given the looong payback on up front subsidies.

    Still, I think if Sprint continues thinking "differentiation" by way of "unlimited" and "TD-LTE speed", they will carve out a competitive niche against VZ/AT&T and they'll remain in the low-margined, wireless hunt.

    PPS wise for sprint (given you asked)... I'd say it's likely sprint will flatline in the $2 to $5 range for a couple of years then have a roughly 30% chance of breaking out toward $10 after that...

    ... I'd objectively "educated guess" clearwire's PPS to push to a $3 to $5 range following the offering, vendor financing and launch of the TD-LTE overlay then flatline until they become EBITDA positive next summer. Following that, my CLWR target is $8 to $14.

    I DON'T think Clearwire will break to $15 or $20 because they remain a low-margined, wholesaler in the wireless industry and that mandates constraints on the topside, IMHO.

    S

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    • EBITDA positive by next summer for Clearwire isn't such a great accomplishment considering that their annual interest on debt is over 500 million dollars which is close to their class a marketcap. As you know, interest is a real cash expense.

      By this time next year, Clearwire will have spent much of their newly acquired financing to build out their LTE overlay and will be faced with a dropdown from 150 million per quarter from Sprint to 75 million per quarter in 2013.

      Clearwire will be looking for more money this time next year which will be no different than from years past.

    • wow , you say s probably 2.oo- 5.00 dollars range !

      Dam ,why not say 1.00 to 10.00 that that why we can really see you know what YOU are talking about when it comes to PPS ?

      Just write a book on sprint, who cares if they make a billion ,if the dam PPS stays low, we MAKE 0000000000

    • Talking of PPS, if S has apx. 3 billion shares out and owns apx. half of Clearwire, how will its PPS plateau so low if Clearwire continues that much higher? Are you saying the debt load will be the primary valuation factor and Adds will be ARPU neutral or they simply won't add enough ARPU to make any real PPS difference?

      Regards,

 
S
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