Deutsche Telekom wants $1 billion in compensation if proposed Sprint/T-Mobile merger falls through

Deutsche telekom T mobile

AT&T failed terribly when it attempted to buy out Deutsche Telekom’s controlling share in T-Mobile US back in 2011. In fact, because of the way the deal was structured and clauses put in place, T-Mo received compensation of around $4 billion including $1 billion worth of wireless spectrum. So it’s no surprise to hear that if a bid from SoftBank was to finally materialise, and a Sprint/T-Mobile merger failed, Deutsche Telekom would want to receive some kind of financial compensation. According to the WSJ, that amount is set considerably lower at ‘just’ $1 billion.

According to the site:

The carriers are working toward securing a deal in the near term, the people said. But given perceived regulatory opposition, the companies are weighing whether it is worth trying a deal now or waiting until after a government auction of wireless airwaves expected to take place in 2015 or under a different administration, people familiar with the matter said.

T-Mobile is also allegedly demanding that its identity remains, and that some key members of staff stay onboard following the merger. Previous reports have indicated that if the two companies do become one, that John Legere is seen as the frontrunner for the position of CEO.

The compensation demands allegedly put in place by DT may be lower than those met by AT&T a couple of years back, but, it’s still something Sprint would want to avoid. When rumors began gathering pace late last year of this proposed merger, Masayoshi Son was reportedly not sure of the company’s financial ability to meet any hefty compensation demands.

We’re yet to see what comes of this, but there’s clearly something going on in the background. And it can’t be too long before we either see an official bid made by SoftBank/Sprint, or until all goes quiet and the Japanese carrier cools its interest.

Source: WSJ

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  • RefarmAllPCSnowPlease

    How about a 10 by 10 MHz of nationwide PCS spectrum that covers every damn square inch of America?

    Sprint would still have plenty of that BRS/EBS licenses left.

    • Tim Engen

      sprint plans working working on 20by 20 not 10 by 10. no carrier has 10by10 20by20 40by40 etc in every inch of the country. there are areas of the country where even at&t and verzion have NO coverage

      • DirkDigg1er

        Sprint is initially deploying 5×5 1900mhz FDD-LTE, 3×3 or 5×5 800mhz FDD-LTE, 20 MHz TDD-LTE(which is comparable to 10×10 FDD)

        • Jay Holm

          That is extremely weak! Doesn’t Sprint have a whole lot more spectrum than that?

        • DirkDigg1er

          Yes. Sprint has around 160 MHz of 2400-2600 TDD spectrum on average in the top 100 markets. They are initially deploying 20 MHz chunks and 40 MHz chunks later this year.

          I’m interested to see how TDD coverage will improve when they deploy 8t8r antennas.

        • Jay Holm

          They have so much spectrum, then why are they deploying LTE on only a 5×5 chunk???? Why not use more spectrum?

        • DirkDigg1er

          Currently Sprint is using 3 bands as shown above. They intend on increasing spectrum to 60MHz next year.

        • Jay Holm

          Can someone please explain to me why spectrum is increased incrementally, instead of going straight to 60mhz, and blowing the competions speeds away?

        • DirkDigg1er

          Radio equipment, cell phones,and and modems that are available currently don’t support it yet. Another reason would be testing in the lab/ outdoor before deploying.

        • SprintSucks

          Most of their 1900 is tied up with 1X (voice) and EVDO (3G). They only had 10Mhz of additional 1900 for LTE, which the FCC gave them in compensation for the Nextel rebanding mess.

          Also, they only have 14Mhz of 800 at most, even less in some parts of the country. Most of their holdings are 2600 which has a range not too different from Wi-Fi…

    • kev2684

      spectrum isn’t everything. they need to invest in new towers. I live in Jacksonville, fl. both my flat and my work place don’t have coverage. they have 50mhz AWS and 30/50mhz(forgot how much) PCS here. spectrum abundant market, very spotty deployment.

      • Jay Holm

        I don’t understand this talk about 50mhz of PCS spectrum, but yet we get excited about T-Mobile deploying 10×10 or 20×20 LTE, why don’t they just use ALL of that 50mhz of PCS spectrum, combine it with carrier aggregation, and we all should be getting 200-300mbps!

    • Eric

      That would rot into T-Mobile wallet since it would take 3-4X more towers to cover the entire country with AWS/PCS than 700/600 MHz spectrum.

      • Fabian Cortez

        I think he’s talking about more nationwide PCS spectrum for capacity versus having T-Mobile cover the entire country with PCS.

    • Mirad77

      With all that Softbank is still trying to buy TMUS rather than building out and deploying the 150mbps down that they say they can?

  • Doble-A

    I say let Sprint rot, and let T-Mobile rock.

  • Tidus1ph

    They should as for spectrum too. That is if certain bands they use is also used by Sprint. Or, at least make it 2 billion.

  • milanyc

    I’d say financial ability of Softbank is significantly higher than AT&T’s from a few years back. Why would T-Mobile ask for a lower breakup fee price, I have no idea.

    I’m puzzled.

    • Adrayven

      Actually, my understanding was SoftBank is under heavy pressure/debt right now.. they made a big bet getting Sprint.. a bad one.. Now they want to make Lemonade..

      • milanyc

        Softbank just collected $58billion from Alibaba IPO. They’re loaded.

        • KB

          They don’t have that money to use. They may get a few billion out but most of it has to stay in Alibaba stock. Plus the debt softbank holds is absolutely nuts.

        • D Nice

          Blah blah don’t you know being in debt is the American way. Lol

    • MastarPete

      The way I see it, since DT would actually like to sell they have to ask for just enough to not scare away a buyer while also not asking for an amount that would be too low of a financial penalty based on the other party’s financials. ATT has been practically rolling in money so it made sense to jack up the breakup fee, SoftBank/Sprint not so much. I’d be surprised if there wasn’t any spectrum involved but I don’t think we’ll hear any details on that unless Sprint actually tries to go through with a buyout.

    • northrode

      This puzzles me too. I am also puzzled why they are pushing ahead with
      a deal that the regulatory authorities are set against.

    • guest

      two reasons:
      1) they know SB/Sprint can’t afford similar terms
      2) Remember DT is not 100% owner any longer – an equivalent to the $4B in todays terms would be $2.6B

  • sushimane88

    1 billion that’s a little low i would go atleast 2 billion so it would string a little bit on sprint end. but im still crossing my fingers that softbank/sprint wont bid on tmobile. 1 billion for spectrum and 1 billion for the network lol.

  • Jay J. Blanco

    I would like to see 2 Billion in spectrum and 2 Billion in cash. 1Bil going to Tmo and 1Bil going to DT. And T-Mobile gets the spectrum

    • sushimane

      what spectrum would tmobile would want from sprint?

      • Rod

        Some of that 1900mHz PCS. Works with iPhones, fits into their current modernization plan, and no new phones required.

    • Sidekicker89

      Yeah there needs to be spectrum as part of the break up fee.

  • philyew

    If this is going to go ahead, what will be far more important this time around won’t be the compensation package, but the way that TM is expected to behave during the decision period.

    Last time, TM had no means of survival other than the takeover or a breakup package that would enable them to begin competing again. Without the means to deploy LTE, they were effectively dead in the water.

    This time, they have the means to continue in business indefinitely, as long as they don’t destroy their customer base by blowing up their Uncarrier approach.

    Last time, they elected to minimize capital spending and implement measures that cut costs, regardless of the impact on customer relations, because the organization would either be easier to break down as a result after the takeover, or could be built up again through the breakup package.

    This time, TM have thoroughly modernized infrastructure with forward-looking capabilities which are worth sustaining regardless of the outcome of a merger attempt.

    As long as TM continue their network program and actively participate in the 600MHz auction, I don’t much care if they do or don’t carry on buying subscribers from Sprint. Then, if the FCC and DoJ do their job diligently, it won’t matter whether the breakup fee is “only” $1 billion.

    • wazmo

      Don’t forget that Dish sits in the wings sitting on a boatload of unused AWS spectrum should the FCC/DOJ go thumbs down (which I think they’d be fools not to allow, given they allowed T to suck up Leap)

      • zummy

        It’s not really AWS though. It’s AWS-4, and it’s not compatible spectrum with what we think of as AWS, which is AWS-1.

        • Fabian Cortez

          Correct. But with the upcoming AWS-3 auction, there’s a good chance that AWS-4 will become interoperable with AWS-3.

          The FCC left it up to the carriers to voluntarily have the two be interoperable.

          If the carriers cannot come up with a solution on their own, the FCC gave itself some leeway to step in and regulate later on, i.e. there’s a good chance it’ll be interoperable.

    • Chardog

      TM couldn’t just let things “go to hell” this time. Merger or not, they now have shareholders that require a return on investment. They weren’t a public company before and could squander the business without external consequences..

      • philyew

        Excellent point…though Deutsche Telekom is equally accountable to its investors and would only have been protected from similar scrutiny by the fact that hardly any of those investors would have directly experienced the deterioration in service that resulted.

  • DirkDigg1er

    That’s a fair amount considering Sprints financial position. I think now is the perfect time to merge. A combined company could possibly leapfrog VZ/T to deploy a 5G network.

    It may be too late if they wait 2 years.

    • Jay J. Blanco

      Sounds like a super Advanced LTE network

      • mloudt

        Nah lol it sounds like 700 million for DT’s local native main branch and 300 million for their little Tmo Usa branch. That’s always been DT’s issue they only want to invest about 1/3 into Tmo Usa and make as much as possible off that to reinvest for their main native branches. Best case scenario NO SPRINT NO DISH SELL TO VODAPHONE.

  • Justin Merithew

    I’m thinking the bid for the merger will happen soon if the Spectrum auction restrictions get blocked. But if they don’t, it probably wont be until after the auction, so Sprint and Tmo can each get their own reserved portion of spectrum, then merge.

  • come at me bro!

    This is sum thing I don’t get Softbank brought 80% of sprint, and at the time sprint had a huge amount of debt under their name and that huge debt is passed down to Softbank and now their willing to be more in debt if they are willing to bid on T-Mobile. Yeah T-Mobile has debt too but their looking for promising then sprint as of now. The top two govern body FCC and doj express their feeling and concerns about any merger with the #3 and #4 carrier in the country and the CEO of DT express his opinion about that merger would be a tough one to pass. But Softbank CEO would be willing to bid on T-Mobile and probably lose the bid and lose 1 billion dollars that sprint don’t have and bring sprint/Softbank further down the drain. But how about if the merger ever ever goes through that would bring 3&4 in more debt then ever and be a long time before they become profitable but have a more chance of them filing for bankruptcy because they accumulated so much debt.

    • Fabian Cortez

      Spelling? Grammar?

      My head hurts…

      • tmo_rep

        lol I know right haha. After reading that post two times, I’m still trying to figure out what the hell did I just waste my time reading…

      • Mirad77

        Yea those two are not his strong points. That nevertheless, doesn’t make what he is saying wrong. If am a bank, I will not risk this unless am betting on the newco’s failure.

        • Fabian Cortez

          That’s fine and dandy but I have no idea what he said; I gave up.

          How can you expect someone to take you seriously and/or put effort in trying to engage in conversation when you don’t take the effort to put your point across in a concise and well-written manner?

          We have language for a reason…

  • Dakota

    And note that Sprint has started throttling unlimited data (at 5gb in some areas)

  • vrm

    FCC has warned that if they attempt to merge, the broadcast auction rules will be changed and restrictions removed; they are imposing the restrictions in order to allow 4 major carriers to exist and Legere and others have lobbied with FCC and told them they needed this or “consolidation”. FCC will not allow both.

    In fact, if softbank makes an offer, the restriction will be lifted and at&t/vz will gobble 600 mhz. Then the FCC will take their time to decide on the merger and deny it and sprint and t-mobile will be back where they started.

    This is probably why they are both losers. They keep making bad decisions.

    • Fabian Cortez

      They? Most of T-Mobile’s “bad decisions” are out of their hands (see daddy DT).

    • macman37

      Great points made vrm,

      With Sprint/Softbank pursuing this merger/acquisition despite the FCC’s warnings that the restrictions made for the 600 Mhz auction will be removed if Sprint and T-Mobile attempt to merge, it is an obvious admission by Dan Hesse and Masayoshi Son that Sprint sucks and was a real bad investment for Softbank. The only party that really benefits from this acquisition/merger is Sprint; and that is because their crappy spotty network gets a chance to live on in 1 form or another. Other than the 1900 Mhz spectrum which T-Mobile has plenty of, Sprint has no 700 Mhz spectrum and AWS spectrum to give or share. As it stands right now, Sprint doe not have any spectrum that allows for interoperability for any of their devices; and they know that this fact is killing their future potential for subscriber growth and retention. 1 good thing that came out of this article is Deutsche Telekom being aware of this and putting Sprint in their place with a $1 billion compensation; hell, they could have asked for more like they did with AT&T, but they took into account what little Sprint has to offer.

      • DirkDigg1er

        I disagree. This is an excellent time to merge. Verizon is currently debt burdened, The FCC is also overburdened with net neutrality issues/Comcast TWC/ATT DirecTV/ obtaining 600MHz spectrum/ etc.

        Both carriers have spotty coverage. After reading comments on the site, many areas either Sprint or Tmo has superior coverage. A combination could benefit everyone.

        As for interoperability, both carriers are upgrading to LTE. A combined company could be the first 5G in the US.

        • Kidney_Thief

          Fortunately for T-Mobile, even if the FCC totally mails it in, neither the DOJ nor the FTC will forget to do their due diligence. Any way you cut it, the outlook for the merger looks grim.

          Could the merger be beneficial? Sure, if you think a debt-ridden company buying another with a divergent spectrum portfolio in a deal that’s almost entirely bank financed (read: more debt) is beneficial, then it smells like a rose.

          And 5G? The 3GPP is barely talking about what 5G could be. It’s a pretty safe bet that the landscape of the wireless industry will be very different, merger or not, before 5G is ever implemented, so there’s no way of knowing who will have the first 5G network.

        • DirkDigg1er

          Agreed.
          Agreed. The debt burden is an inherent risk.
          Although you are correct in terms of 5G, a combined company would be in a better position to build out and compete early on.

  • JJCommonSense

    I really believe that this is all by design.. DT knows that the chances of a merger very slim of passing the FCC. I believe they knew that when they tried to sell to AT&T…. theyre sitting there like “go head sprint make your offer, and the $1B is for wasting my time…

    • vrm

      they will have to forego the 600 mhz special consideration just for considering the merger, from what I have read so far. So the price is far > $1b . Besides, FCC can still reject the merger and so they lose on both counts.

      • philyew

        Do you think it likely that the 600MHz auction will take place before a takeover attempt is resolved?

        It took AT&T barely 10 months to call it quits in 2011. A takeover launched in summer 2014 will most likely be abandoned before June 2015, if it’s still set to be blocked, and the auction probably won’t happen before then anyway.

        I can’t see why Softbank would choose to launch a formal attempt any later, since they already have the finances lined up and a long delay negatively impacts their position in the auction. If they were to wait further, then it would likely be for the possibility of a broader political change taking place, which wouldn’t be until 2016.

        • vrm

          It doesn’t matter. If the auction goes through with the restrictions, any merger will be automatically denied.

          If any merger is attempted between now and the auction (not may 15th), the rules can and likely WILL be changed and the small carrier advantage removed.

          Regardless of the rules set, the merger can be denied. If either party acquires < 1000 mhz spectrum at ANY time, likely the merger WILL be denied.

          These are all based on statements FCC made during the past 30 days. FCC is facing a lot of flak, including from congress for trying to "rig" the auction in favour of small carriers. It is to see 4 carriers survive.

        • Rob

          As with everything else in the government, they just need to wait for the administration to shift and they’ll get what they want. If they wait long enough, they’ll have their cake, eat it too, and go back for seconds. This is how business is done these days.

        • vrm

          It cannot get any better for t-mobile. If republicans sweep the mid-terms, it will only get worse. That party has always been about the biggest and baddest corporations- they never attempted to hide that.

        • philyew

          Do you have a link for details of the statement(s) to which you refer? I’ve skimmed through FierceWireless articles over the last month but can’t see anything that talks about changes happening if the merger is attempted.

          A fair change would simply be that Sprint/TM should be treated like AT&T and Verizon, if an active merger attempt has either been approved or is ongoing at the time the 600MHz auction is conducted.

        • vrm
        • vrm

          f i nance. y a hoo. c o m / news/sprint-t-mobile-merger-may-202143260 . h t m l

          I posted it and it went into moderation. Remove the spaces in this url.

        • vrm

          f i nance. y a hoo. c o m / news/sprint-t-mobile-merger-may-202143260 . h t m l

          I posted it and it went into moderation. Remove the spaces in this url.

        • philyew

          Thanks.

          I have to say though that it’s a bit of a reach to assume that “sources familiar with the proposed plan” automatically translates to “sources within the FCC”.

          The idea that the new rules aiding all small carriers would be abandoned because of unresolved actions by Sprint/TM seems extreme. As I said before, all that is needed for an equitable outcome would be to say that Sprint/TM would be treated like AT&T and Verizon, in the event that the auction was to be conducted when the merger was either completed or was still an active consideration before the federal authorities.

        • vrm

          sprint plus t-mobile would have too much spectrum to be treated with kid gloves. You might as well kiss the 600 mhz spectrum goodbye and hand it over to vz/att. And in not so many words, FCC is saying the same thing.

        • philyew

          I’m not suggesting that they should be treated with kid gloves. I’m simply saying that there is no reason for the FCC to penalize the other ~100 members of the CCA, by withdrawing all the provisions to assist smaller carriers in the 600MHz auction (assuming they are approved in the first place), simply to ensure that a merged Sprint/TM organization doesn’t gain an unfair advantage.

          I’m afraid that, until I see something clearly attributable to Wheeler or another FCC official, I’m going to treat reports from “sources” with an appropriate amount of skepticism.

        • vrm

          I have been following reported events regarding the fcc auction since late 2013. I am pretty sure that the fcc auction rules have a lot to do with t-mobile’s lobbying. Even softbank doesn’t care- they have been lobbying to buy t-mobile in the meantime. John L. and Mike Sievert met with officials in DC several times in the past 6 months.

          IMO, it is not far fetched to say that this is happening entirely due to t-mobile and if t-mobile were to not exist anymore, this will go away.

          You should also read the 2014 Q1 earnings transcript for DT or at least the most relevant part I posted above. If Hoettges is being honest in there, it doesn’t seem like he is keen to sell and if he can get his hands on some 600 mhz spectrum, he would rather not sell the company but sell some shares after lockout to raise cash- that is MY analysis.

        • philyew

          I don’t think it’s true to say that Softbank don’t care. Like TM, Sprint have been making submissions to the FCC on this issue and submitted a filing in February 2014 entitled “Sprint’s Competition-Based Framework For A Weighted Wireless Broadband Spectrum Screen.”

          Together with TM and a number of other CCA participants, they have been contributing to the drive for fairer competitive representation. Here’s a list of the joint attendees at a meeting with the FCC in April on the issue:

          Steven Berry, CCA
          Rebecca Murphy Thompson, CCA
          Ben Moncrief, C Spire Wireless
          Jeff Blum, DISH Network
          Alison Minea, DISH Network
          Shirley Bloomfield, NTCA – The Rural Broadband Association
          Jill Canfield, NTCA – The Rural Broadband Association
          Brian O’Neil, NTELOS
          Tara Shostek, Rural Wireless Association, Inc.
          Erin Fitzgerald, Rural Wireless Association, Inc.
          Larry Krevor, Sprint
          Richard Engelman, Sprint
          Kathleen Ham, T-Mobile
          Steve Sharkey, T-Mobile
          Grant Spellmeyer, US Cellular

          While Sprint and TM are by far the largest of the participants, it would be wrong to suggest they carry special responsibility for the FCC policy proposal and equally wrong to dismiss the significance of the proposal, if Sprint and TM were no longer beneficiaries because of a possible merger attempt.

        • vrm

          BTW, if t-mobile is clubbed together with 100 other smaller carriers in the auction, who do you think the auction addresses ? The 100 smaller carriers are to t-mobile as t-mobile is to att/vz.

  • Jeffrey Wang

    Wow… is this Deutsche Telekom’s way of killing off their competitors?

  • mloudt

    At&t paid 3 billion cash + 1 billion spectrum. I understand Sprint doesn’t have At&t money so do this deal and I will be fine. 1 billion cash + 1 billion in that sweet 800 mhz Nextel spectrum if the deal fails.

  • TMOB2B

    I am a Tmo employee, I never comment on these boards, just browse to get a general feel for the perception of Tmo.

    I hate to break it to all the Tmo diehards, but Tmo will not exist in the next 12 to 18 months. I will not comment as to what is changing internally, but there is plenty of changes which point to something happening very soon.

    Tomorrow an announcement will come regarding some promo plans that are being yanked, killing profitability. No, I won’t mention what it is, but you will see it tomorrow.

    I love Tmo, love the culture, love the company, but sadly we cannot compete on our own. We simply cannot win a protracted price war with ATT and Verizon, internally, we all know this. ATT and Verizon are reacting very aggressively in the B2B marketplace now, they did not in the past, I suppose a wake up call to them.

    I think all the die hard Tmo people just need to accept the inevitable. Perhaps Dish will come in and keep us away from dysfunctional Sprint, but either way, Tmo will be toast in the near future.

    • Jay J. Blanco

      Thanks. Well thanks to analysts and other sources. I know that changes are coming. But wow that’s drastic. I hope Dish comes to the rescue. Sprint might as well leave us alone. *Calls Dish CEO*

      • DirkDigg1er

        You choose Dish over Sprint? You would feel comfortable having a owner with zero cellular experience?

        • Jay J. Blanco

          Dish CEO would be CFO and someone esle can run the Mobile department. Plus Dish can get there customers to bundle T-Mobile which would boost subscribers and profits

        • Kidney_Thief

          The guy decided to start Dish Network after a poker tournament. No experience at all, selling satellites door-to-door. Sometimes, what you lack in experience, you make up for in inexperience.

          Besides, Legere will be there to hold his hand.

        • DirkDigg1er

          If Dish doesn’t have enough money to bid vs Sprint, i find it hard to believe they will be able to handle the debt, bid in spectrum auction, and invest in network infrastructure.

          I just don’t want Dish to strip Tmo of spectrum and ruin everything.

        • Kidney_Thief

          Why get into a bidding war with Sprint if the deal is almost certainly doomed? Dish may be the only level-headed company in this whole mess.

          I don’t want Dish to gut T-Mobile, either, but it’s been known for a long time that they want to get into the wireless industry, so I would think it’d be in their best interests to keep T-Mobile the way it is, or even bolster them.

        • DirkDigg1er

          I worry that Dish will not improve the brand. Dish typically buys companies that are strapped for cash and drains its resources. I’m also not a fan of bundle wireless TV with Tmobile spectrum. I hope this is not Blockbuster fiasco all over again.

        • TMOB2B

          I would ! Sprint has been dysfunctional for years, pre-dating the Nextel debacle and the list goes on and on.

          It’s really a shame, but things change and I will likely be out of a job! Atleast I can see it coming !

        • DirkDigg1er

          To be fair, the Nextel debacle was not Sprint’s fault. The government made them keep 2 networks. Another problem within Sprint was it’s board. They preferred the band aid approach.

          It will be interesting no matter which company gets approval.

        • vrm

          what exactly will happen to the “two” disparate networks if sprint buys t-mobile ?

        • DirkDigg1er

          David Pogue: But T-Mobile and Sprint are different, incompatible network types (GSM and CDMA). How would that work?

          John Legere: We merged a year ago with MetroPCS, which is a CDMA carrier. More than half the customers have already moved over and gotten new handsets on the T-network. So rather than mash together two complicated network technologies, what we’re doing is migrating the customers from one to the other over time.

          Then we’re taking those CDMA components and shutting them down. And we’re taking that radio spectrum and using it to make the T-Mobile side even better, because now you have more radio waves available for more customers. It’s a really interesting model. We’re talking about 10 million customers from MetroPCS.

    • tmoloyee

      Bull $hit, I am also a t mobile employee.. Are you seriously talking about tablet prices going back up?? There is nothing internally suggesting any major changes are happening.. Unless you haven’t noticed Mr employee.. T mobile is setting records and outselling everyone and taking a lot of market share every month.. Here in sfla.. We can easily compete.. I dunno wtf u are talking about.. 2.3 million customers last quarter doesn’t change that fact mr

      • TMOB2B

        You’re obviously a low level retail employee………

        • vrm

          you are obviously an incompetent b2b salesman who is afraid of losing his job and ranting here.

        • TMOB2B

          Realist, exactly why I never post on these sites, the uneducated are the only ones who post here……..

        • Inevitable

          Yes! Thank you! Finally someone on here gets it. T-Mobile has been making moves that signal they will be selling. So many reorganizations…they are definitely getting rid of liability. All these new customers don’t mean a better future, it just means they can sell high to sprint (or dish).

        • TMOB2B

          The people that work for T-Mobile get it (except the retail employees). It has been apparent for a long time this was the plan, drive sub growth , fatten the stock price and move on.

        • storeowner

          Hello I am a winner’s circle 2011-2012-2013 with more than 1 million in revenue for the company on each year , now I just quit tmo and have 2 stores in texas ( own ) my ex-co-workers still believe on tmo values I dont and i know the momentum will end very soon Im with you on this one

        • Chris

          oh wow, there are plenty of smart and educated people posting on this thread. calling everyone that post here uneducated is a stretch. if we all are uneducated, at least we’re not stupid enough to call on people. sorry cam, but the t-mo community feeling that built this site will go away if you allow people like TMOB2B on here. Being a “realist” doesn’t give you the right to call people “uneducated”. This would be my last visit to this site. and will definitely not recommend anyone to go on here. this used to be a fun site.

        • Durandal_1707

          How is it Cam’s or the site’s fault if some random guy posts crap in the comments section?

        • http://twitter.com/tabascotx Mike Roberson

          Look, TMo lost its ass on the B2B side because of lack of coverage. There is no continuity coverage. A company isn’t going to go with a provider with no network footprint. And realistically they’ll prob go with ATT or Verizon because they can write part of that off as a business expense, thereby bringing the cost down to a reasonable amount. T-Mobile has always lacked in coverage. Its been its weakness from the beginning. In the end, if T-Mobile fails, it will be because of a lack of network footprint. IF, they can stave off this bid until the 2G network refarm, they’ll have a chance to give a real run on ATT & Verizon. I do think that Son seriously underestimated the push back he would get from regulators. Think of this though, the FCC does have another reason now to go against it. According to the article from Yahoo Finance that was previously posted… “U.S. regulators have expressed skepticism about the proposed Sprint/T-Mobile deal, but SoftBank CEO Masayoshi Son has made no secret of his goal to acquire the smaller carrier to become a stronger force in the United States and ultimately build the world’s biggest mobile-related corporation.”
          If regulators went against the ATT merger because they wanted to keep up competition, then they will have no choice but to kill this one. This deal could make Softbank the largest wireless carrier in the world, not just the US.

        • TMOB2B

          Actually we are doing very well in B2B, I have hit goal 19 months in a row, and far exceeded it the last few quarters.

        • http://twitter.com/tabascotx Mike Roberson

          Well for T-Mobile, not in the overall wireless industry. T-Mobile has been doing well getting new post paid customers too, but, when compared to ATT & Verizon, not so much. Its a matter of point of view and how its spun..

        • dkbnyc

          Do you even work for T-Mobile or are you that T-Sprint dude using another handle? Your observations.

      • TMOB2B

        and the fact is we added 2 million subs and lost $150 million , not sustainable.

        • Chardog

          FYI- You have to spend a buck to get a buck… That is what is happening… The profitability comes down the road, not up front.. Also am T-Mo employee, very tenured, not “low level” and have worked in multiple sides of the business.. Some changes are inevitable price wise any way you put it, but we are not going to drastically going to change course when we are the ones leading the change in the industry overall..
          BTW- Amazon has never made a profit, or at least not in years, and they are still around and growing…

        • TMOB2B

          Wall street knows, and internally we all know. We cannot win a protracted price war, we do not have the capital to do so. It’s simply reality, the financials speak for themselves.

          Initiatives like yanking Tablet freedom after a few weeks, freezing hiring and tightening up on DARTS, taking away credits are all indicators the books are being cleaned up.

        • vrm

          Their mobile revenues are shrinking in European ops, including Germany. EE is their best performing subsidiary and its performance pales in comparison to t-mobile.

          True, prices are falling and they will fall MUCH further, if France is any indication. It is better that t-mobile is already building a business on lower prices. Combining with sprint will not help that aspect in the long term, esp as their plan is to eliminate lower prices- WILL NOT HAPPEN.

          Notice in my above post the financials aspect – the revenue from additional customers is starting to kick in, making self-funding of future growth possible; that is why they embarked on converting all to LTE by mid 2015. Best part is, as the network builds out, they will draw EVEN MORE customers.

          For a business to be viable, you have to look at cash flow- not profit/loss. Profit and loss are accounting gimmicks. If your cash flow is negative, you have to borrow to stay alive and its not viable; if your cash flow is positive, your business is viable- thats all that matters. I can make my spending just big enough to cover my profits but if my business is truly viable, it will not matter.

        • philyew

          Are you suggesting that the ONLY reason for such house-cleaning actions would be to prepare for a sale? That a business consciously setting itself up to succeed in the longer term would not do any of these things?

          I don’t have your advantage of the insider’s view of the company, and thus I guess that, in your view, I’m “uneducated”, but I have seen those types of measures carried out elsewhere for a number of reasons, none of which were as the deliberate precursor to a sale.

        • vrm

          I guess at&t and vz are also going out of business because they pulled back so many of their promotions they are living on borrowed time.

        • TMOB2B

          Yes doubling the stock price in 18 months is all part of the plan……adding 2.1 million subs, but losing money is an issue. Its a numbers game at the moment. Get as many subs as possible at all costs, but you cannot do that in the long term.

        • OG TMOEMP

          are you kidding me? you just need to relax. your market is obviously on a hiring freeze while others are hiring as many people as possible due to shifting hours. that just means your market or district sucks when it comes to sales and probably have 1-3 stores carrying the weight of your market.

          tablet freedom was a “PROMO” and it was clearly states as such.

          taking away credits is nothing new. the market gets a budget and it allocates the most the higher performing stores. once that budget is close to running out, youre told to not discount anything. plain and simple.

          all of this should be explained by your manager, you just have to ask.

          and as for a sale/merger, yes tmobile will more than likely get a bid or two but im pretty confident att and verizon will fight (pay) to make sure it doesnt happen. and it probably wont.

        • dtam

          Of course it’s not sustainable but the high cost of doing business is because of the network roll out. and honestly, to earn $150 million isn’t that difficult if you have 2 million additional subs. after paying the ETF’s for those accounts, all you need is to make $75 a year, or $6.25 per month for each of those subs to become cash neutral.

        • http://profiles.google.com/gallimichael Michael G. Galli

          Well said and the math doesn’t lie.

        • dkbnyc

          Those 2 million adds will pay off down the line BIG TIME. Stop looking at the small picture.

    • vrm

      In Q1 2014 earnings call, in a reply to a question about US consolidation by Fred Boulan – Nomura,

      Tim Höttges – Chief Executive Officer

      With regards to the U.S. consolidation; when, not; if, and ready to share the risks and how could we monetize our stake here with the expiry of the lock up, and what are our thoughts on the upcoming spectrum auction that is how I understood your question, Fred. I think the first thing is we’re very happy how our U.S. business is developing. We said last time, first what you have to do to turn around the business’s infrastructure. We built this infrastructure of 200 million POPs, which we now increased to 250 million.

      With the LTE proposition, we said we have something to sell in the marketplace. Now, we gained, over the last four quarters big time customers. Now the big time customers as a first step is creating revenues and for the first time this quarter we are able to show you the increase on an organic level that we have increased 4.5 times. Now the logical consequence is that now free cash flow and EBITDA is a consequence of this customer roll, which will help us to self fund further growth in the U.S. business. So this is becoming a self funding platform, which is creating more momentum in the marketplace.

      So far we are very proud of what we are doing. Especially if you look to the design of some of the (inaudible) shops or if you look to the branding of Sprint, they are copy pasting what we’re doing and trying to do that, so I think the momentum of our proposition is unbroken and therefore whatever we do we do it for creating additional value in the U.S. market. There is no pressure, there is no hurry for selling a business at that point in time. We have a self funding platform which is nicely developing.

      That said, correct, we will have an expiry of the lock up by the end of the year so that we are open to sell some of the stock here. And right there is even a lot of speculation with regard to spend. I do not want to put oil into the fire on that one in this conference call, but I reiterate what I’ve said always. We are open to create the super maverick. I think to really create value in the market at the higher speed with a better network with even more spectrum a combination for instance with one of the players would make a lot of sense to create a super maverick against AT&T, against this bifurcated market in the U.S.

      So therefore if there would be an opportunity, it would be (inaudible). But you even know that the [SCC and the DOJ] make their statements. They want to keep this environment open for 4 players. I could always say look, you could say if you want that, what are then the prerequisites from a spectrum policy, from reserved spectrum and from advantages to compete with these 2 big players. This is something which we’re going to see next week because the FCC is set to propose pro-competitive spectrum auction rules for the next year’s 600 megahertz incentive auctions and I even have heard that there might be a spectrum reservation for smaller carriers. Let’s see what we will hear at the 15th of May on that subject.

      So therefore, it is too early to say something on how it is developing, but we have a very good momentum at that point in time. And with regard to the spectrum auction, we are waiting for the design which is coming. And we plan to participate in the auction next year.

    • NOYB

      Are you for real?

    • KingCobra

      So what happens when Sprint/TMO theoretically merge? The combined company would have so much debt and so much spectrum (mostly 2.5Ghz junk) that AT&T/VZW would be allowed to gobble up most of the 600 mhz anyway. Leaving the new combined carrier in a floundering, debt riddled, non-compeitive position. Things would just continue as usual for the Big 2 because all the new company would have is disjointed spectrum and customers.

      Remember Sprint/Nextel was almost the same size as Cingular (now AT&T) and Verizon when they merged. Fast forward to today and those two are almost double the size of Sprint. This theoretical TMO/Sprint would likely end up the same or worse.

      T-Mobile did lose $150M last quarter and of course that can’t be sustained long term. Everyone knows that. They can’t and won’t continue to pay ETFs forever, it’s a long term strategy. Get the customer base now, once the base is large enough, rake in the profits from the revenue. You have to spend money to make money.

      For the big announcement I hope you weren’t talking about tablet prices. That’s not a big deal. T-Mobile discontinues promotions all the time after they’ve run their course.

      • DirkDigg1er

        Both companies have cut bills considerably since 2013. They both are a couple of quarters away from posting profits.

        2.5GHz is mostly junk?

        Although VZ/T may have most of the valuable coverage spectrum, they need higher band, AWS/PCS/BRS, for capacity. This could lead to more spectrum swap deals.

        There will be subtle problems with this merger. I don’t think major issues will occur. Both networks are currently on the same path of upgrade.

        • vrm

          Sprint is cancerous throughout and transplants (like nextel, t-mobile) will not be of much use- you might as well feed these organs to the vultures (vz, att). Organ transplants into a terminal cancer case is less useful than feeding them to the vultures.

          Sprint needs to die and I hope that someone intervenes and puts them to a quick, dignified death or else vz, att and even t-mobile will pick them alive slowly.

        • DirkDigg1er

          Lmao. You must really hate Sprint.

          It’s funny how 3 weeks ago ATT was doubting S/TMUS merger saying that large mergers aren’t favorable. Just yesterday Randall Stephenson, ATT CEO, had a change of heart and is also using the Comcast/TWC deal to buy DirecTV.

    • Maximus

      I don’t think you have the slightest idea what you are talking about. Absolutely nothing TMO is doing or has done over the past 1-2 years would suggest that they will not exist in 12-18 months. You are right in that they can’t compete with the big two in it’s current state, but as the network is improved over the next 1-2 years they will absolutely be very competitive. And then it will not only be on price but also on network. Once that happens, the industry will be turned upside down. There is no true loyalty in the carrier world. People care about network coverage, quality,and speed. And they don’t necessarily care where it comes from. The data shows that people are willing to switch anytime. Keep up your investigative work though….it looks like you’re on to something.

  • mingkee

    DT wouldn’t ask too much because such doing will simply kill Sprint.

  • mikejones1876

    It dont matter this deal will fail along wit the dish deal up next to fail…its all a marketing strategy to get money and spectrum….tmobile is not goin anywhere at this rate by next yr it will be number 3 of 4….sprint issue is they cant except last place so y not buy so we can stay number 3 not gonna work….I been had tmobile since 03 and dt always been talkin about selling tmo usa……

  • Davey Jones

    Orrrrrrr, Mr. Son sells his interest in Sprint to Charlie and the boys over at “DISH” and then moves forward with a powerhouse move to acquire “T-MO” which is what he should’ve done in the first place. That would be the business move to play, not moving forward for it to fail at the FCC/DOJ with this current gibberish. That would be a “MAJOR WIN” for everyone at T-Mobile.

    • DirkDigg1er

      I don’t think Dish can afford Sprint stake now. The cost would be up 30% higher than last years purchase. It would possibly go for $10 per share.

  • notyourbusiness

    For crying out loud, why??? Does this mean DT actually wants this merger to go through?

  • DirkDigg1er

    As posted before this may be the best time to merge. Verizon is debt burdened with consolidating, Comcast buying TWC, Sprint attempting a Tmo takeover, and ATT attempting a DirecTV takeover.

    Where does that leave Dish? They have been losing subscribers and there best move to merge with DirecTV may never happen. They need a wireless carrier to co-sign their incompatible AWS-4 spectrum.

    As others posted before, Sprint/ T-mobile could make a hosting deal and sell some spectrum to Dish making a 4th carrier.

    • Kidney_Thief

      Here’s what I’m having trouble with here. What does Sprint offer T-Mobile? Seriously.

      Oh, but they have 850 MHz spectrum! Sprint is so ludicrously over-provisioned, here and now, and doubling their customer base is going to make it better? It’s definitely not going to make things better.

      Okay, what about their 2600 MHz spectrum? You’d have to deploy towers in such a high density that it would be unfeasible to deploy in anything besides the densest urban environments. So, once you leave the city, your speeds are going to tank.

      But the PCS! Oh, right, the PCS. PCS is neat, but is it worth getting swallowed up by Sprint, a company that has done nothing but show how incompetent they are at operating a wireless carrier?

      But we’ll have piles of cash to buy spectrum! The fact that Softbank has been hitting up every bank, trying to secure financing, and their inability to pay for a sizeable break up fee, says to me that they’re putting all their money into their network, or paying down their huge amount of debt. So, how are they going to pay for any 600 MHz spectrum when buying T-Mobile will clear out whatever cash they have left? Additionally, If Sprint can barely get through a spectrum screen, how is the combined company going to?

      Help me out here, because I really don’t see how you believe that this deal doesn’t stink to high heaven.

      • DirkDigg1er

        Granted Sprint has been verrrry slow with network updates but as of the last 2 years they have been fixing there long term issues( FCC approval to use 800MHz for lte, decommissioning outdated Nextel equipment and creating 1 network).

        I agree with you on 2600MHz spectrum outside major cities for now.
        Also, I believe 2600MHz will address capacity and speed issues in highly dense markets.

        Sprint has not addressed this issue outside the top 100 markets. My guess
        is that they are looking for macrocell/ small cell solutions and focus on fixed broadband in those areas.

        As far as AWS/PCS spectrum i think the combination of spectrum will drastically affect both carriers in terms of coverage and speed. Both Sprint and T-mobile are known for horrible coverage, but both have many neighboring areas in which one of two has superior coverage/speed.

        I think S/TMUS would issue junk bonds to raise the cash being that its cheaper than another loan.

        There is no simple solution to a fast changing industry. I just see the benefits of merging out weighing the negatives.

      • macman37

        1 thing that I see Sprint very possibly doing if they manage to merge/acquire T-Mobile is for them to use their 1900 MHz PCS LTE frequency {LTE Band 25} and combine it with T-Mobile’s 1900 PCS frequency spectrum. They will either use the combined 1900 MHz PCS LTE frequency {LTE Band 25} as an upstream, and T-Mobile’s AWS {LTE Band 4} as a downstream or vice-versa that being LTE Band 25 as a downstream, and LTE Band 4 as an upstream. Other than this, Sprint does not have much to offer as a plan as to why they should be allowed to acquire/merge with T-Mobile. Their other planned LTE Bands {LTE Band 26 (800 MHz ESMR) and LTE Band 41 (2.5 GHz BRS/EBS)} frequencies does not allow much interoperability for prospective customers who may choose to leave their carrier and bring their device with them.

        All in all, Sprint, with their current plans, is a dying company suffering from bad decisions. It’s sad to see that Masayoshi Son realizes this now after buying them, but having Sprint live on through a merger/acquisition should not be permitted. The FCC is doing their best to help out smaller carriers with the rules set for the upcoming 600 MHz spectrum auction, and has warned Sprint and T-Mobile that they will remove the restrictions if they try to merge.

      • Mo

        They just want a way out. T-Mobile does not care how people see it. Everybody just wants to cash out & be done.

  • drtish

    I always talk from the side of the consumer but I can see the conversation is going the way of commerce here as well. The current regulators have trended toward consumers. That was all that AT&T botched deal was about. They see the mistakes made with the airline industry and they dont want a repeat. Sprint is saddled with debt and very poor internal strife. It would be a herculean task to get both companies to synch up. All the good will T-mobile has built up with customers would be stalled. The only thing that sprint has is more subscribers who don’t really worry about their plans in relation to price. They think they are getting a good deal but really are not. T-mobile is a trail blazer, and I honestly feel the industry should have at least 4 major players to keep everyone on their toes.

    By the way, Im a former corporate employee. And I am still very bullish on the company and what it offers to consumers.