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Sprint Corporation Message Board

  • docavlee docavlee Dec 31, 2012 4:00 PM Flag

    Dish looking for a partner, Sprint isn't it

    Sounds like good news to me! Should ensure FCC approval for SB/Sprint/CLWR merger. Market reacting accordingly with pop?!?!?!

    Sentiment: Strong Buy

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    • I agree. I posted about a week or so ago, that the Dish news was just background noise along with disgruntled CLWR shareholders threatening lawsuits, etc.. This latest Dish news just confirms it. FCC approval will happen.

      • 1 Reply to stck_guy
      • The FCC and DoJ approvals are very likely but this is a major acquisition that stretches the limits beyond what is normal for a foreign company. The baseline for foreign ownership of major operators is only 25%. However, its been seen that has been set aside including Vodofone's share of Verizon and DT's ownership in T-Mobile. Softbank is among the more amenable companies and home countries... Softbank was founded on forging partnerships between with US and Japanese companies. When it started up SB was a minority participant as a software distributor and technology partner with in the PC, networking and 'datacom' space that has built into mobile broadband service as the company has grown.

        What helps the case is that the FCC and DoJ have a need for more competition to develop outside of the two largest, Verizon and AT&T, who control about 70% of smartphone sales and much healthier margins and balance sheets.

        There is also an argument that has been building over the past few years, often expressed by Sprint management and their lobbyists and spokespersons as seen in PR, interviews and submittals to the FCC and DoJ, that Sprint faces very tough circumstances including beleaguered finances and the growing threat that the larger competitors will shift the playing field to higher capacity LTE and video services via their lower frequency spectrum, financial clout and market domination.

        Sprint has said, in so many words, that if not allowed to be substantially acquired by Softbank the company's long term survival may be threatened. Despite having make improvements in several key aspects of the business model and setting course on the unified path of industry evolution, Sprint will need to step up capex intensive efforts as Verizon and others exploit new spectrum and video services over the next 3+ years.

        The Clearwire investors feel jilted: just as the new horizon of LTE deployments is within sight and a new investment from SB will quicken the pace, the rug gets pulled out from under them at about 1/8th the IPO price.. ouch!

        Their loss will factor as Sprint-SB's long term gains. The 2.6GHz is a more costly spectrum to deploy into because it requires higher density of use and deployments... the two do not pooof! into existence with the wave of a magic wand.. (initial build of large numbers of base stations). Sprint's 'Network Vision' plan is really a renaming of the long-in-gestation tiered coverage model envisioned for 'True 4G' IMT-Advanced networks. That network model puts the 2.6GHz spectrum into a role as an expansion/extension band that can be built out more on the basis of need than in one large deployment to reach nationwide coverage. And that makes the cost basis more on a pay-as-you-go basis than the hard swallow of initial nationwide coverage.

        The next couple of years will need to see the plans unfolded ... much is yet hide and seek guessing. In 2-3 years I think there is a good chance SB-Sprint will 'rock' forward to become more competitive and, as SB's Son has said, reach higher margins and net profits (what the heck, Sprint never has profits.. what the heck is that? .. reminiscent of a Saturday Night Live sketch.." I know what that is.. .. what the hello is that!?").

 
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