Analysts: T-Mobile and Sprint doomed if they merge, doomed if they don’t

 

sprinttmosense

For the best part of the last 6 months we’ve heard and read many different takes on the possible merger between T-Mobile and Sprint. Up until recently – when the merger was purely speculation and messages along the grapevine – analysts had mostly been singing from the same hymn sheet. The chorus: Sprint and T-Mobile need to merge, or one of them (at least) is doomed.

The argument was seemingly that the two companies are both in need of network expansion, since neither had a truly nationwide LTE network. Both are also losing money. While T-Mobile revenue finally swung back in to growth last quarter, it still reported an operating loss despite adding over 2.5 million net subscribers. Sprint lost subscribers, saw its revenue drop, and reported a loss. So neither is in the healthiest position. This of course means they need each other to survive, or at least, it did.

More recent comments by analysts and industry watchers would seemingly argue against a merger, for almost the exact same reasons. And many others to boot. One team – at Merrill Lynch – is not at all enthused by the prospect of a merger deal. As noted by 247WallSt.com:

The team is also not impressed with the merger’s chance for approval, which has already been an issue for regulators. Lastly, Merrill Lynch doesn’t even like the combined company’s chances of success in the long-run, even if the deal is allowed and consummated.

The report goes on to detail the plusses and negatives of any potential merger. On the plus side, we have the information that the FCC recently pushed through changes to the rules for next year’s major spectrum auction. It would see Sprint and T-Mobile being in prime position to acquire much-needed low-band spectrum. That said, with the FCC benefiting Sprint and T-Mobile so blatantly, it also indicates the intention to keep a four-carrier market. Part of the conditions of the new FCC rules stipulated that the rules will be null and void if a major transaction between smaller carriers goes through. If a deal did go through, it would have to be completed after the auction, or the merged company would lose the right to bid on the portion of spectrum kept aside for the two individual carriers. On the “almost positive” side is that at least one FCC commissioner is open minded on a merger.

Cautionary messages are sent when it comes to Wall Street’s valuation of company stock, however. If Sprint or T-Mobile share price climbs purely on the basis of merger rumors, that’s not a particularly healthy sign.  Merrill Lynch believes that if Sprint and T-Mobile spend the next year (maybe more) trying to convince regulators that they’re doomed on their own, it doesn’t exactly encourage faith from investors. And, that the two companies’ valuation is mostly based on potential of a super-powerwful merged company. Not on the financial reality of their current state.

Merril Lynch isn’t the only analyst team against the idea. Craig Moffett of MoffettNathanson can’t see an easy way to merge and be successful, unless Sprint slashes its plan prices. Referring to Masayoshi Son, he stated “I think he’s realized he’s between a rock and a hard place. Sprint’s prices are much too high, but if Sprint cuts prices, its stock will fall. They don’t come close to justifying their stock price.”

The problem is that if Sprint does cut its prices to try and match T-Mobile, that would hurt its stock prices. And its valuation, despite awful financial performance, has grown 8% based on rumors that it’ll join forces with the more attractive and disruptive T-Mobile.

Sprint customers – on average – spend $62 per month, while T-Mobile subscribers are around $50 per month according to a report from Reuters. As plans progress for the two companies to merge, it’s clear that an average spend gap like this isn’t a sustainable financial model. Michael McCormack of Jefferies states “It is not a sustainable situation. If the companies merge, they will need uniform pricing across the company.” 

And those aren’t the only concerns. T-Mobile and Sprint individually both lost money last quarter. Neither is really making any profit – as mentioned previously. And while T-Mo is gaining a lot of subscribers, Sprint is losing a lot. Looking at just postpaid subscribers, Sprint lost 2.5 million over the 5 quarters between Q1 2013 and the end of Q1 2014. The Uncarrier gained 3.3 million. Evened out, that’s a gain of just 800,000 postpaid subscribers between them over 15 months.

Screen Shot 2014-06-10 at 12.19.42

Credit – WSJ

And as we showed you yesterday, even in terms of coverage the two carriers don’t benefit each other that much. Both cover pretty much the same metro areas, and Sprint coverage reaches very few areas T-Mobile doesn’t.

In short: It is tough to see how a merger would benefit T-Mobile, except by more than doubling the subscriber base and increasing its spectrum holdings. It has far more potential to benefit Sprint at this moment in time. Does it benefit the US consumer, or market as a whole to have another major carrier around? That is also unclear.

A big problem in judging Sprint’s individual potential is that the past year hasn’t been great, mostly for one reason: It’s going through a massive overhaul of its network. Ditching tons of its old technology in favor of the new “Spark” LTE network. Any company going through such a major change is bound to feel the pinch during the bumpy transition. Once the network is living and active, that is when a better assessment can be made. Besides, T-Mobile LTE roll-out is still going strong. It’s activating VoLTE in numerous cities, upgrading others from 2G/EDGE to HSPA+ and LTE, and others are getting super-fast 15+15 and 20+20 networks.

Point being: All this upgrading costs money. And once completed, T-Mobile’s overheads should drop, meaning the growth in revenue will eventually turn in to a growth in profits too.

Via: Reuters, 247WallSt, PhoneArena

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  • Verizonthunder

    No to sprint period. T-Mobile is on a roll and has kept their promise.

  • johnediii

    The only benefit to me would be that I live in the one state were Sprint has much more coverage area than T-Mobile. T-Mobile has been great for me. My biggest problem is that at my house I only get GPRS. 500 feet down my road I get HSPA+ and 1/4 mile down I get LTE now after they finished upgrading the town I live in. Somebody needs to boost their Signal just a little bit!

    • Verizonthunder

      T-Mobile is working on expanding LTE coverage. My recommendation is to use sensorly to keep track of any blanket of coverage it will let everyone know what coverage they can currently receive

      • Paul

        I’ve been doing that as well in hopes that they will see the data.

        • Verizonthunder

          Sense using sensorly app I have added new areas to showcase either 2g/3g or LTE. More people need to use this app. I am sure more people including corporate are looking and doing research for next expansion.

    • Chad Dalton

      i think that’s funny how that happens…i could walk 4-5 feet in one direction in my house and my signal completely change, drops from 3g to Edge..like really?

    • fort

      They offer a home repeater that will give you better home service. I’m using it and its worth it weight in gold. Its called cel-fi and its free.

      • PapaSmurf

        I have it and it works like a charm!!!

      • johnediii

        The problem with this is that for T-mobile you have to have a 3g signal at your house. I have to be 300 feet from my house to get a 3g signal.

  • DDLAR

    Paying too much attention to analysts is a sure way to bankrupt a company. Management is in charge because the corporations’ owners believe them to be the best people to make decisions about the company. They should do their own analysis and pay very little attention to what the press has to say.

  • sushimane

    in my opinion i see no good coming out of this merger most of the spectrum both of them hold basically overlap each other in most of the coverage area? how would that be competitive when it comes to att and verizon. tmobile just need more coverage which is one they bought spectrum from verizon even though none of the phone support the 700mhz in the area that they purchased but later this year or next most likely they would support it. but the fcc does need to review the whole business view most likely they wouldnt be approve it just the fact most of the spectrum sprint and tmobile are using are basically overlapping so no real benefit then sprint doubling up their customer base and especially sprint is in a major network overhaul there’s no way they can really transition tmobile newer and better network into sprint processing sprint spark network. crossing my fingers that the doj wouldnt approve it because people would be losing their jobs and fcc would reject it because theres no really benefit for either carrier but sprint to bump up their customer base number up.

  • Thyfalcon

    I’d like to see the companies combine. There are areas in Long Island that have Sprint not T-mobile. Yes, there is an overlap but at least that means solid coverage. I bet if they did a zoom in map like you can do on the carriers site, it would look alot different for specific areas. As long as Softbank keeps T-mobile prices alive then the FCC shouldn’t have a problem with this. I know I don’t.

    • Ben

      Do you really think Softbank will keep T-Mobile’s prices? Softbank made some promises prior to the acquisition of Sprint (ie: better, improved network). How many of those promises do you think were kept? Don’t fall for the sales pitch; if it’s not included in the contract, they’re not obligated to follow through on any of it. This merger could enhance coverage, but NOT EXPAND. The FCC will almost definitely change the Auction Rules if the merger is approved, and you know the big two will do whatever it takes to torpedo this merely floating boat. If you asked me, T-Mobile should be the one buying Sprint (see the graph above).

  • Jay J. Blanco

    T-Mobile should focus on a acquiring smaller carriers. Especially in states that they don’t serve. Like Montana, Dakotas, West Virginia. Idaho. They could easily snatch them up just like AT&T and Verizon is doing. T-Mobile definitely should get in Alaska. Before Verizon does. T-Mobile doesn’t need Sprint.

    • Paul

      That’s actually not a bad idea.

    • yankeesusa

      That’s one of the best ideas I’ve heard. Of course I’m not a pro so I don’t really know, but it does sound interesting.

      • Jay J. Blanco

        I’ve been looking into regional carriers of the state’s tmobile don’t serve. And it wouldn’t be a bad idea to buy them to expand Magenta reach. Instead of building out which would cost alot of money

        • notyourbusiness

          That’s a great idea. It would certainly help T-Mo to truly compete against the evil empires that are Verizon and ATT.

    • bkin94

      Not a bad idea but that would take a lot of money. Can they afford to go more in debt? They’re already investing a lot in spectrum and expansion

      • Jay J. Blanco

        Your right its not gone be cheap. Got to take it one step at a time. maybe after the LTE expansion would be good

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

          No it wouldn’t be cheap,but the merger is gonna cost TMo a lot more in the end if you read the tea leaves of the stock market. Taking T-Mobile from a “Buy” to “Hold” or “Sell” could hurt them way more than people would think. If stock traders loose confidence in them, the stock price will most definitely slide. The best bet really is to buy the smaller companies like Jay suggested. They should’ve snagged Cricket before Att did.

        • Jay J. Blanco

          Exactly. T-Mobile would see a influx on new customers in those areas who are tired of high priced service

        • Kidney_Thief

          States by Population Density:
          46: South Dakota
          47: North Dakota
          48: Montana
          49: Wyoming
          50: Alaska
          The numbers suggest that there’s not a whole lot of customers (and consequently money) to be made in any of those states. Probably why they haven’t deployed there.

        • Jay J. Blanco

          I know the pops of those states. But that’s the big deal. They are sitting on a ton of spectrum not be untilized. Others might switch because they actually cover those areas. Like truck drivers etc.

        • Kidney_Thief

          It kind of is a big deal, though. Also, it’s important to note that this isn’t a ranking of the raw population, but the population per square mile. With people so spread out, do you think it’s responsible to deploy a tower that might only serve a few customers?

        • Jay J. Blanco

          That’s why I suggested buying regional carriers. They already have the towers. Not everywhere but where it matters in those states.

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

          Wish John Legere would roll through here,he’d prob get some better ideas than merging with Sprint..lol

        • Jay J. Blanco

          I use that same website to look at the small carriers

        • itguy08

          Yes because people travel and it may only serve 10 customers day to day but the 100′s that pass it every day can also use it. And it would be a selling point.

          As an investor in TMUS I want them to fill in those holes!

        • kalel33

          I’ve never seen a truck driver with T-mobile. It’s always Verizon or AT&T, because they get coverage everywhere they need it and there’s a lot of truck drivers. Also, Verizon and AT&T have the advantages of acquiring company/government contracts because of their coverage. When I worked for Verizon they stated they could make a profit just off of the business and corporate accounts. The consumer side was just gravy.

        • Jay J. Blanco

          Exactly. T-Mobile sucks in the business area. They really don’t get that much business in that area

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

          Except one thing, the Bakken Oil Shale in the Dakotas. Literally thousands have moved there since the last census. A negative unemployment rate and people with extra cash to spend on plans and phones.

        • Kidney_Thief

          I know all about the Bakken and the massive population growth, but given how spread out the oil fields are and the cost of building towers and deploying service, I doubt they’d ever see a profit from it. That, coupled with the uncertainty of where the next discovery will be, T-Mobile may as well be playing whack-a-mole.

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

          Good point, if you look here,there are a good number of regional carriers TMo could buy. http://www.mountainwireless.co… And not all of them are in the Dakotas. There are a good number on the list that are in other states. This is probably the best put together list of regional carriers and ratings I’ve seen.

        • Jeremy

          I live in Cheyenne Wyoming and we just got LTE here! I noticed it this morning.

        • Trevnerdio

          You mean to say they went from no coverage to LTE? Really?? Wow.

        • philyew

          If DT had to reduce their position from 74% to 67% in order to raise the funds for the 700MHz A block spectrum, then they would have to act similarly in order to raise capital for other acquisitions, or worsen the company’s already difficult debt situation.

          TM is already only attractive to companies that are already significantly invested in the wireless industry either through active presence or passive spectrum holdings. The greater the debt to be serviced, the narrower that appeal becomes.

          DT still want out because, even though TM is way more viable now than it was four years ago, it needs even more investment to remain competitive, which in turn means a poor return on investment situation for the foreseeable future.

  • Paul

    Analysts are only as good as the data they have on hand and the amount of money you pay them to say what you want. These analysts are also the ones that make the gas prices skyrocket when I fart on a date. So we should certainly take their opinions with a HUGE grain of salt. Plus, who says T-Mobile is failing by itself? Sprint is the one sinking. Magenta is on the rise like a phoenix.

    I’m on the “No to Sprint” boat right now, but I am curious to see the details of the merger. I encourage T-Mobile customers to hang on until we know what will happen. Hell, you aren’t tied to a contract!! Plus, the FCC and DoJ could very well say “nope.”

    Remember people, we don’t have the details yet. It is just rumors and speculations right now. Let’s learn what will happen and make a well informed opinion before we take any action.

  • drtish

    Analysts also said T-mobile would be dead with in a year, starting back as far as 2010. After the merger failed they all but proclaimed it the harbinger of T-mobile’s demise. Remember all the analysts who kept saying that T-mobile would get the iphone back in 2010? That’s the problem with the US economy, everything is based on future value and it’s screwing us all up.

    • philyew

      The thing is that back in 2010 TM may well have been “dead” within a relatively short time – at least in terms of its viability as a national, top tier competitor. It was saved by the break up package that it got from AT&T.

      The prospects in 2014 are not so grim, but they still present a contradiction for analysts, who struggle to reconcile how a consumer-oriented Uncarrier strategy can work in favor of investors and desire to see maximum profits.

    • besweeet

      That’s probably why what “analysts” say shouldn’t be looked into much. Anyone can be an analyst these days…

  • Adrayven

    Simply do not see this as a good move for TMUS.. No sane person would go for it, but DT wants out and doesn’t care about the companies health really. They just want cash on the barrel to further their EU efforts.. which really sucks for us here in the states.

  • http://www.jeffkibuule.com Jeff Kibuule

    Simply put, neither company can merge its way out of a money-losing period.

  • chardog

    T-Mo was already supposed to be dead. It was resurrected from the ashes of the failed AT&T merger. No, there isn’t a profit now, but based on subscriber gains and reduced churn the money is there in the 5 year plan. Have to spend $ up front to expand the network/get subscribers. Keep those subscribers happy, they will pay back those expenditures by staying loyal.

  • David Tyler

    If Sprint can prove to me “NOW” by lowering the prices across the board, then I will agree with the merger. Dont tell me about that “Framily crap”, dont see the reason why I should seek strangers to get lower pricing.

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

    I’m going to preface this with,yes,i am a T-Mobile FanBoy. I had service for 8 years just as they changed from VoiceStream. I was a Corporate Store employee for 2. That being said,i have 7 lines I moved 20 miles down the road from San Antonio,Texas and we had to switch to Att because of no coverage. Only 20 miles from the 7th largest city in the US. And on top of that, its in the heart of the EagleFord Oil Shale that is booming and bringing in literally thousands of people. But,no Coverage. Yes, they are supposed to upgrade their towers. But how about lets wait on that and see the growth from the network upgrades rather than throw the weight of a sinking anchor like Sprint around our necks shall we?

    • Adrayven

      Exactly.. Sprint will just cause both to fail.. let Sprint die.. maybe let T-mo and smaller carriers carve up the corpse’s spectrum .. make healthier regional carriers while your at it!

      The circle of life.. sometimes.. you just have to let… it… die!!!

      • othercents

        The major issue with both Sprint and T-Mobile is that they don’t have enough spectrum to build towers in locations that ATT and Verizon already have. By combining spectrum they could in theory be able to build towers everywhere ATT and Verizon already have service and then some.

        • Fabian Cortez

          Actually, they do have the spectrum to build it out. It’s just not cost-effective to do so.

        • kalel33

          You have to buy spectrum for those areas, which neither one of them have. They have tons of spectrum but not where they don’t have coverage.

        • Fabian Cortez

          You have to buy spectrum for those areas, which neither one of them have. They have tons of spectrum but not where they don’t have coverage.

          Incorrect.

          Sprint and T-Mobile both have nationwide licenses.

          I’ll say it again: it’s not cost-effective to provide service in those areas when you don’t have access to sub-1 GHz spectrum. It’s three times as expensive to deploy 1,900 MHz versus 700 MHz/850 MHz.

          There’s no point when those areas are sparsely populated.

        • kalel33

          Incorrect.

          You buy spectrum for certain locations. Look at the spectrum that T-mobile got from Verizon. It’s not national, just relegated to the areas that the spectrum was purchased for. There is no such thing as a national license to use spectrum wherever you want. You have to purchase that spectrum for those areas.

          Also, sparsely populated areas usually have traffic through them. It’s not worth it to build out in those areas if all you want is to get people that never leave the city but then you lose a big portion of the population that actually travels every so often, plus they’ll never get truck drivers and they’ll always lose business accounts to AT&T and Verizon, which business/government accounts is where you make a ton of money.

        • Fabian Cortez

          Incorrect

          You buy spectrum for certain locations. Look at the spectrum that T-mobile got from Verizon. It’s not national, just relegated to the areas that the spectrum was purchased for. There is no such thing as a national license to use spectrum wherever you want. You have to purchase that spectrum for those areas.

          Also, sparsely populated areas usually have traffic through them. It’s not worth it to build out in those areas if all you want is to get people that never leave the city but then you lose a big portion of the population that actually travels every so often, plus they’ll never get truck drivers and they’ll always lose business accounts to AT&T and Verizon, which business/government accounts is where you make a ton of money.

          Please educate yourself by visiting the FCC and researching what spectrum Sprint and T-Mobile currently control.

          Both carriers control spectrum nationwide. Just because they have said spectrum doesn’t mean they deploy it; again, it’s not cost-effective.

          EDIT: Here’s a map: http://assets.fiercemarkets.net/public/mdano/amis/sprinttmo-ag-big.jpg

        • kalel33

          Replied but it’s not even worth it. Like kicking a dead horse.

        • Fabian Cortez

          I can prove my point. Read the article here on the 700mhz spectrum that was bought from Verizon. They can only use it in certain areas, because spectrum isn’t based on just frequency but frequency AND location. AT&T might own the same frequency of spectrum in California that T-mobile has in New York, because one bought for one location and one bought for the other.
          Seriously, there’s been multiple articles on this very site about spectrum holdings and where they can be used. You even commented on the article that talked about the spectrum from Verizon was for certain areas. That spectrum that was bought can’t be used everywhere. Hell, there was even a map on that article that showed where it could only be used.

          Wow you only see what you want to see huh?

          Who said anything about 700 MHz? T-Mobile controls other spectrum. Sprint also controls other spectrum.

          Sprint has at least 5×5 MHz of PCS nationwide. T-Mobile also has at least 5×5 MHz of AWS nationwide.

          Go do the research and then go back to sleep.

        • Fabian Cortez

          Incorrect

          You buy spectrum for certain locations. Look at the spectrum that T-mobile got from Verizon. It’s not national, just relegated to the areas that the spectrum was purchased for. There is no such thing as a national license to use spectrum wherever you want. You have to purchase that spectrum for those areas.

          Also, sparsely populated areas usually have traffic through them. It’s not worth it to build out in those areas if all you want is to get people that never leave the city but then you lose a big portion of the population that actually travels every so often, plus they’ll never get truck drivers and they’ll always lose business accounts to AT&T and Verizon, which business/government accounts is where you make a ton of money.

          Please educate yourself by visiting the FCC and researching what spectrum Sprint and T-Mobile currently control.

          Both carriers control spectrum nationwide. Just because they have said spectrum doesn’t mean they deploy it; again, it’s not cost-effective.

          http://assets.fiercemarkets.net/public/mdano/amis/sprinttmo-ag-big.jpg

      • Willie D

        *sings* its the ciiirrrrcle of liiiiiiife…

      • Fraydog

        In any bankruptcy process, AT&T and Verizon would capture the largest amount of Sprint’s spectrum, especially in the 2600 band where they could do serious damage in the speed department and use network speeds to permanently cripple T-Mobile.

  • Alex Zapata

    Help! The sky is falling!

  • notyourbusiness

    In the case of T-Mobile, as is the case with many things, things get worse before they get better. I think if T-Mo is left alone and if the merger fizzles out, they’ll be just fine. Sprint is another story altogether. I definitely don’t think T-Mobile is “doomed” if they don’t merge. Please…

    • Willie D

      They were “doomed” when AT&T were going to buy them, and it was said TMobile would die out, and it didn’t. Sure that merger was a fluke and totally gave TMo the cash, roaming and spectrum it needed to compete, this merger with Sprint does not provide a healthy reciprocal relationship, even if it fails to win approval. In fact, it is already giving TMo a bad name to be associated with Sprint as many of the newest arrival customers with TMobile are former Sprint customers who never want to go back, who will leave, negating the merger for the subscriber count anyway.

      • IamTwone

        Exactly I am a former sprint customer with them for over 10 yrs, spoke good of them when others down played them then last summer I left for tmobile because the promise of lte wasnt there dis yr I used my nexus on sprint I was getting around 2-4mbps down where on tmobile I was originally getting 10-20mbps n in the past 2 months been average around 30mbps I know tmobile doesnt have the largest network n still get edge in some areas but atleast they are progressing.

  • disqus_PZ8HPZPXfY

    How in the world will Sprint save T-Mobile? As far as I’m concerned, Sprint is the underdog here. Now I’ll admit I am a Magenta fan boy but with good reason, not only has T-Mobile added subscribers, but they have changed the mobile market by driving prices down, as well as creating one of the best LTE networks in the nation. Now I get that that has caused them to lose money, but they’ve got to improve their network if they want to add subscribers, and in turn increase their revenue. I am totally against the proposed merger. I believe that T-Mobile has the potential to not only survive, but thrive on its own. They already have a good thing going by releasing VoLTE in certain markets, and expanding their insanely fast LTE all across the nation. Not to mention the “Un-Carrier” strategy that has become hugely popular.

    • Jay J. Blanco

      Sprint definitely is a underdog. Can’t wait until T-Mobile is #3

    • Devo

      God you people are so freaking stupid! No wonder the rest of the world can’t stand us with idiots like y’all roaming the streets. Tmobile is overhyped trash with a hippy freak pounding you all in the booty. You all think tmobile has changed the game and lowered prices when in fact prices have gone up across the board and you think you don’t have a contract when in fact any of you moving over for their eft promo is signing a two year contract on a phone. Look morons you’re actually paying more then we we paying just a couple years ago. Individual plans are more expensive, family plans are more expensive, and now you pay full pop for a phone to boot yet all you tards forget to do the math. Do the math and you’ll see tmobile is as expensive and actually more expensive in the case of sprint when you add in phone payments. I used to have a tmobile subsidized plan at $70 and some change that was unlimited across the board now I’m looking at $90 a month (on the low end) with an iphone payment included. They are a joke and have all you idiots bent over and you’re all begging for them to shove it in with a sand paper condom. Seriously just do the math and you’ll see prices at every carrier have in fact gone up since tmobile CHANGED the game. The only people who benefit from these plans are people buying the nexus line, used phones, or those who keep their phones for 3+ years, but let’s be honest the average joe does none of those things. Even if you do one of those things sprint is still better priced then tmobile and that’s not an opinion that’s a fact!!

  • besweeet

    Sprint might be in better shape if they didn’t sponsor almost every major US sporting event nowadays…

  • Marcoshay

    My area was just upgraded to 4G on Friday of last week, no LTE yet (Yuma, AZ) I was wondering how to use Sensorly. I have the app, and I’ve ran speedtest before in random spots in town, but I was wondering if I could track 4G while I was driving around town? I’m not too sure how to use this app is what im saying lol. Also, do you think they would upgrade to HSPA and not LTE?

    • Jimmy James

      I would use Sensorly only temporarily. Do a few tests, then uninstall it. I found it wastes my battery according to the built in battery info and a third party app. Tracks your location, so obviously it will use up your battery. Again, this is on my phone, and may not affect anyone else. Sensorly is mostly used for tracking speed data for the different cell companies across the US. If every customer used Sensorly at T-Mobile, we could show the US how good their network is.

      • Jay J. Blanco

        You can cut off passive scans to save battery

        • Nekcohm

          Exactly! If passive scans are turned off, and if you only report to server over wifi and or while charging, Sensorly shouldn’t use that much battery.

    • Jay J. Blanco

      If u want to map coverage. Go to the map trip tab and press start while your taveling.

  • donnybee

    I don’t like Sprint. I’ve had them twice before and that’s why I’m not currently with them anymore. I love T-Mobile and love what they’re doing. I think they have the best leadership team around.

    That being said, I’m confused by some arguments I’ve seen. Some people say it’s bad to have one large company instead of two smaller companies. But we all know Sprint is losing and wasting away, so what happens if/when it dies? The market will be dominated by 3 carriers, which so many are afraid of. So in my head, I’m thinking of what would be worse.. Sprint dying and being picked clean by regional and national carriers for their spectrum and customers, or taking those resources, combining them with the best leadership and goals in the industry, to create the best of the 3 carriers. If Sprint fell, I can’t be an idiot for thinking that VZW and AT&T would pick up some of the available resources of the failed company. Why let them have more resources? That, along with the fact that T-Mobile would still a small third company, means even more doom for my favorite carrier.

    When we talk about this, we have to see it from both sides. I would love to see Sprint disappear. But it’s either Sprint disappears on its own, and the entire market benefits from picking it clean, Or T-Mobile benefits from getting the resources of Sprint before Sprint just needs to take the “highest bidder” (aka VZW and AT&T). Even if it made regional carriers stronger to have Sprint die on its own, as another commenter stated below, that wouldn’t last long. AT&T and VZW – the ones with the extra cash – could just swoop in and buy up any regional carriers with promise.

    So again, what would be most beneficial? Sprint giving what good it has to everyone, including the big two. Or Sprint giving all its good to T-Mo for their leadership to turn it into something better? The argument of keeping 4 national carriers isn’t supported by anyone on this forum because nobody likes Sprint and we all know it will die one day on its own.. So to make a case to keep 4 carriers is also making a case to reduce it to 3 carriers, just with a little more time.

    • Maximus

      VZW should buy Sprint since they both use CDMA, change the name and let it operate separately as a 4th major carrier.

      • ButtaKnife

        I don’t think the CDMA network is worth focusing on. Companies are actively pivoting to adopt VoLTE so that they can sunset the old GSM/CDMA networks. That’s also why a Sprint/T-Mobile merge wouldn’t be a huge deal as far as the network goes. (This is not at all a commentary on whether or not a merger would be “good”.) LTE is where all carriers should be focusing their efforts, only leaving just enough spectrum to the legacy networks to get to the sunset dates.

      • DirkDigg1er

        It’s not going to happen. Verizon purchasing Sprint will NEVER get regulatory approval. Verizon low band spectrum and resources combined with Sprint’s high band would be a monopoly.

  • Fooser

    Why do “analysts” or “authors” not realize that Sprint service revenue numbers include handset subsidy while the majority of T-Mobile customers pay separately for their handsets? Of course T-Mobile average service revenue will be lower if the phone subsidy is mostly removed from the cost of service. They also fail to realize a simple explanation for the T-Mobile $151 million loss in 1st quarter. Adding customers costs money upon sign up through sales commissions, inventory management, etc… They should easily be able to realize the NPV of those customers makes T-Mobile hugely profitable over the term of their time subscribing to T-Mobile. I guess it is just easier to simply look at and report on numbers such as average revenue and P&L for a quarter and not realize what they mean!

  • Jimmy James

    Hi! No matter how hard I try to convince others to join T-Mobile, they will not. They feel that it is the poor man’s phone company, equivalent to MetroPCS. When I first tell people I have T-Mobile they go, “Oh.” and look perplexed. I explain that I have truly unlimited data with no throttling, the ability to upgrade my phone at any time, phone insurance, free fully functional security software, voice mail app, etc. They say, “I don’t use that much data, and I don’t like changing phones.” I say you can watch Netflix on a beach or at a park or in a car and not worry about going over. Still no sell. I explain they don’t have a contract and you can sell your phone on E-bay to pay it off, or exchange it for the newest iPhone. They then say, “T-Mobile has crappy phones or their phones are outdated.” Even though I just explained that is not the case. They also complain, “T-Mobile doesn’t have any coverage. I’ll stick with Verizon, they are everywhere.” Which in my area is completely untrue. I also explain T-Mobile will pay their cancellation fees from whichever company they are with. “Naw. I’m good. I will just wait until my contract is up.” Sorry T-Mobile, you have a long way to go to spread your message to the masses.

    • Jay J. Blanco

      Tmobile has a better selection of phone then Verizon. And I don’t understand people they don’t even travel alot. We be in the city 95% of the time anyways

      That’s pretty much the only reason they stay. Other then that they would leave in a heart beat. No one likes their prices

      • kalel33

        I wouldn’t say “better” than Verizon. They have a bunch of Motorola phones that T-mobile doesn’t. They only phone I can think of that T-mobile has and Verizon doesn’t is the Nexus 5, which is a big loss.

    • Maximus

      Unfortunately, perception is reality. Although TMO is a good value and becoming better every month, people perceive it to be of lesser quality. It will take time to change peoples perceptions, but it will happen.

    • Bobby

      Sounds like you just need to work on your pitch. I typically have no problem getting people to join TMO in my area.

    • itguy08

      I don’t get why people define themselves by what mobile carrier they use. It’s not like the others are your neighbors.

      Personally, I care only about the network and price. I could care less if it was called CrackHoWireless, if the coverage was fine and the price was right.

      T-mo has decent coverage, a few rough spots but for a $20/month savings from Verizon, I’ll survive.

    • sushimane

      Naw I feel the same way. I try to convince my cousin and family to move to t-mobile but neither of them want to. I know Verizon has the best coverage out of the big four. My cousin see Me with new phone like every 7-8 months just the fact t-mobile let me pay off the phone early and get a lower monthly payment after I’m down. my cousin has Verizon unlimited data plan from way back so the only way he can get a new phone is Craigslist so he trade and put in money for a new phone. But when I tell him how much I’m paying with unlimited everything plus insurance he got jealous. Friends can’t get use to the sperate payment their to use to that 200 dollar new phone thing. Hopefully when they do switch they remember to put my name under reference so each of us get 25 dollars lol

    • kalel33

      It’s not “truly unlimited data” when you travel outside of metros and get the “your 50MB of roaming data is used up and you will not be able to use data again until you are back on T-mobile’s network” or something to that effect. That was the biggest gripe I had.

  • http://www.t-mobile.com Big-Myke Kanuri

    People need to stop listening to these so-called Analysts. Their main position is to make money. They’re not very good analysts. Sprint has been a Horrible company for years and they are still running.

    • DirkDigg1er

      I agree. Both companies have been in worst positions.

  • Maximus

    I think TMO is playing this thing just right. They are going to go along with Softbank’s request for a merger, at least on the surface, knowing full well that this deal probably will not go through for the reasons mentioned in this article. Once it gets denied by the FCC, TMO will bank $1Billion and keep on expanding their network and adding more subscribers. Sprint will have wasted more time and more money and continue down the road of obsolescence. Keep up the good work, TMO!!

    • Fooser

      DT will take that $billion not TMUS. The closest TMUS would come to getting that $billion would be to put it on their books as a loan from DT. Any break-up deal needs to include spectrum to benefit TMUS. The Germans can’t take spectrum with them!

      • Maximus

        TMO would get some of that money. TMO’s success obviously benefits DT. DT knows TMO has something good going which is why they still want 15-20% stake in TMO if the merger happens.

  • philyew

    “Part of the conditions of the new FCC rules stipulated that the rules will be null and void if a major transaction between smaller carriers goes through. If a deal did go through, it would have to be completed after the auction, or the merged company would lose the right to bid on the portion of spectrum kept aside for the two individual carriers.”

    I don’t know whether this is lifted from the analysis, or is your commentary Cam, but there is no direct substance to these statements. I have several times quoted directly and posted links to the FCC statement on the rule change and once again this is what they ACTUALLY said:

    “”Finally, the Commission clarified that the rules it adopted today are based on current market structure, and that it reserves the right to modify the rules based on significant market changes, including proposed transactions.”

    • Cam Bunton

      I don’t understand the point you’re making. Surely, if a deal was officially announced, the FCC could change the rules. It’s kinda insinuated that any merger would make the regulators re-think the auction rules. Right?

      • philyew

        (a) They didn’t say the rules would be “null and void”. The rules apply to almost 100 members of the CCA as well as TM and Sprint. It seems possible they would simply treat TM’s and Sprint’s spectrum holdings as a single entity, thus disqualifying them from the reserved block, while leaving open its special status for the other CCA members.

        (b) The special rules have no bearing on the timing of the takeover. The FCC are saying that it would be sufficient for a proposed merger to be under official consideration, regardless of its point in the approval process, for the separate holdings to be treated as a single entity.

    • Stone Cold

      Right now the auction rules are slanted towards T-Mobile and Sprint’s favor. If this merger goes through then the rules will more than likely be changed again.

      • philyew

        It’s possible that the rules may not need changing at all, if they simply treat the spectrum holdings of TM and Sprint as a single entity, thus disqualifying them from participating in the reserved portion of the auction, in the same way that Verizon are disqualified. Whether the merger is approved or simply under active consideration, it would be right to treat the situation in that way.

        The point is that, while TM and Sprint are the main beneficiaries of the new rules, they are available to something like 100 companies who are members of the Competitive Carriers Association. It would be entirely wrong to tear up the rules entirely because of the status of TM’s relationship with Sprint.

        The only change necessary may be a reduction in the size of the set-aside from 30% to something more appropriate to the funds of the other CCA members.

    • Willie D

      Sprint and T-Mobile merge, they can say goodbye to low end spectrum forever. There will not be another auction for spectrum this low for decade or more. Seeing how often companies merge, Id not be surprised if the new company merges into another one by that time and is gone.
      More realistically, if BOTH companies need 600Mhz as they claim, then they need to remain separate, invest in that, then share it across or merge after.

      • philyew

        If the merger is active when the auction is run, it doesn’t disqualify TM and Sprint from participating, it will simply mean they have to go toe-to-toe with Verizon and Sprint without being able to participate in a limited auction for a subset of the spectrum from which Verizon and AT&T are excluded.

        If the deal isn’t approved before the auction goes ahead, they will have to come to some agreement allowing them to pool resources in the bidding, and then divide up their mutual wins equitably, if the merger is subsequently denied.

  • JP

    What I don’t understand is, so far there have been 70 comments here about the Sprint debacle, but nobody has commented a bout the guy with the dress. I think there’s something a little wrong with the fact nobody has commented about that, I think he looks fabulous.

    • No2SprintMerger

      He’s trying to welcome us into his Framily.
      I personally would much rather have the pretty lady in the magenta dress back.

    • Cam Bunton

      Hehehe. I thought it appropriate, since it was used in an ad by Sprint when AT&T was trying to buy T-Mobile. ;-)

  • DDLAR

    I find this picture very disturbing!

  • Derrick McClean

    This petition sums up my thoughts, having a merger would not improve network quality much for either carrier. Much of the network overlaps with each other, Sprint only has coverage in a small amount of the US where T-Mobile doesn’t, and vice-versa.

    A merger/buy-out would only cause a monopoly of either CDMA or GSM, as Sprint+T-Mobile would have to become one or the other, leaving the 3rd carrier to become the monopoly. It would also cause a ton of job loss. (ie, if Sprint+T-Mobile becomes CDMA, AT&T will be the GSM monopoly, if they become GSM, Verizon will become the CDMA monopoly.)

    Sign this petition please!
    https://petitions.whitehouse.gov/petition/not-allow-softbanksprint-buy-andor-merge-t-mobile-it-will-create-job-loss-and-less-competition/fgMjkRvY

    • zombiexm

      It doesn’t matter if Verizon would be the only CDMA. Gsm allows Sim chip change and phones can be used on t or attached if gsm is kept, also everyone’s moving to LTE anyway which is bing bing bing gsm. The market is already moving to all one standard. Welcome to 00 Europe.

  • Rick Rudge

    You hit the nail right on the head, Cam. :-) Both companies weren’t as profitable (mainly because they’ve both been re-investing in their infrastructure) bringing themselves up-to-date. I’m patiently waiting to hear how this merger pans out. Normally there’s some kind of paying off the debt of the merger, but I’m hoping that further re-investing in coverage and cutting prices will continue. ;-)

  • Willie D

    Here is my thought… Sprint claims it will be data king once its network is fully deployed, but from my experience as a former Sprint customer (roommate still has them, unhappily) in their fully launched network vision areas, the service is not only worse for 3G, but the coverage and signal strength increase is minimal, not representative of what Sprint hoped or claimed it would be. On top of this, if you can even get 4G LTE to work (80% of the time in NV areas it does not), the speed is only marginal over 3G anyway. It really only works if you are in a fully deployed Spark area, and even then, you must be in good 2.5Ghz coverage for that to happen, based on WiMAX use, being in a good area is hard to come by. However, Sprint claims it will be data king, and I think if they want to talk the talk, let them walk the walk and back it up. Use that $35 billion they want to use to buy T-Mobile to reinvest in their own network. Let that speak for itself. For a company in debt, and without a real working network, always claiming they are rebuilding it, I fail to have noticed anything get better. Even with the millions of customers off their network now, statistically, you would see it get better, less customers = less congestion = better quality and speed, but not so with Sprint. I fail to see how investing another $35-40 billion into a company, merging the two, somehow will satisfy the debt or keep EITHER network on track to build out as fast as either have, as quality rich as T-Mobile has, or keep prices down. I know if I have $100 to spend, and I spend it on a new wireless router, it doesnt make my DSL internet faster…but I could spend that $100 on my own service, and upgrade myself from DSL to Cable and get faster speed with the same router. That is my point with Sprint. Buying a new router (T-Mobile) wont make Sprint (a slow DSL modem) faster or better. But investing in itself, will make it better. And if you got that kinda money laying around, you are more suited to help your failing business than invest in another.

    • Mark G

      sprint could very well continue building out its brand new network, and build the best network on the face of this earth but it wont matter ……. this merger isnt about networks or expanding coverage its about “scale’” thats what att and verizion have over sprint and tmobile. scale means everything

  • dontsh00tmesanta

    Gsm

    • Taronbba

      Analog, not digital and no services!

      • dontsh00tmesanta

        Gsm

  • Jesse James

    So the same analyst that say this stuff are the ones who said Enron was a great investment along with giving mortgages to people who can’t afford them.

  • superg05

    no thanks t-mobile is doing extremely well now if they stopped expanding the network you would see them as profitable from the gain of 3.3 million customers in one quarter but they put the money where it mattered rapid expansion for the customers. i get that you don’t really care being all the way across the pond where this does not effect you but this pro-merger bull you are trying to shove down your readers throat to try and influence to make them think well maybe it won’t be that bad so they wont speakout is total BullS#!t .
    a reduction in competition is always bad it creates the ideal environment for conclusion and price fixing eventually all 3 super carriers will raise prices just because they can and the value of what you get will decease and you’ll get less for your money and they’ll make more that how it works in the United States thanks to the Corporate Congress.

    let it be know loud in clear you oppose this proposed merger
    To Contact the Commissioners via E-mail

    Chairman Tom Wheeler: Tom.Wheeler@fcc.gov
    Commissioner Mignon Clyburn: Mignon.Clyburn@fcc.gov
    Commissioner Jessica Rosenworcel: Jessica.Rosenworcel@fcc.gov
    Commissioner Ajit Pai: Ajit.Pai@fcc.gov
    Commissioner Michael O’Rielly: Mike.O’Rielly@fcc.gov

    • kalel33

      They’ve upgraded the network but where have they expanded? The coverage map coverage looks the same as it did in 2010.

      • superg05

        if you take the time to look in places like howards forum or hell even comments here people are reporting some 2g only sites becoming hspa and lte live

        • kalel33

          And again, I understand they have upgraded their network but they have not expanded the coverage area. You stated they are expanding their network and I asked you where, which you came back to tell me about them upgrading their existing coverage area. They aren’t expanding their network, just upgrading it. There’s a big difference between the two.

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

          Exactly!!! Upgrade does not = Coverage. IF they want to play the national Cell game. They have to step up and be a national coverage player. If you look at the map that Cam put together,Sprint and T-Mobiles coverage’s overlap. The merger isn’t going to do anything for expanding coverage,thier networks cover the same areas.

    • DH2914

      Sprint and T-Mobile are like two children who are at the mercy of the schoolyard bullies Verizon and AT&T. Until they get some some size and muscle, which a merger would bring, we will still be stuck with a duopoly that we have now with Verizon and AT&T!
      You can’t have competition, unless you can compete!

  • GinaDee

    A combined Sprint/T-Mobile would own 2/3′rd of the US prepaid market with so many redundant brands I’ve already lost count. Prepaid monopoly. Such a mess. No thanks.

  • Christian reyes

    I don’t understand how Verizon keeps doing so good there super expensive sure there coverage is very good but they don’t have unlimited internet and they still have traditional contracts

    • Jesse James

      majority of people care more about coverage/performance than price/value

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

    I think something that people are missing is that this is going to have some serious regulatory scrutiny. If this merger is allowed, Softbank will become the largest wireless carrier in the WORLD, not just 3rd the USA. If that’s not going to be a monopoly, I don’t know what is. I have a feeling the FCC will require them to shed a lot of spectrum they both have, which would negate part of the reason for the merger to begin with. What Softbank Should Have done is bought T-Mobile first,then gone after Sprint. It would’ve been an easier pill to swallow for its customers and the FCC. I know he’s a smart man, but I really don’t think Son did his homework on Sprint and how people feel about them or perceive them. I think he saw a struggling company he could get for cheap and then gobble up someone else with better brand Loyalty and customer service matrix. I don’t think Softbank thought this out very far. The US market is VERY different than the Japanese market.

  • Eric the Fruit Bat

    Conspicuous by their absence….DISH, who’s sitting on spectrum.

  • VegasSmitty

    I’ll be gone the day after the merger!

  • HothTron

    I just puked in my mouth….

  • Nevsky2

    What needs to be done is to break up the Ma Bells again. They have reassembled the pieces and have an almost oligopoly without the prior regulation. They should then be forced to divest some spectrum to Sprint and T-Mobile.

    After that the government should break up the big three airlines, or at least end the antitrust exemption for revenue code sharing.

  • Ana Peralta

    Why every one hate Sprint, if a highway is undergoing construction traffic problems are unavoidable, even you pay toll to use that highway. Sprint is upgrading every tower and adding new towers.

    If they are delaying in the upgrades blame your local county, delaying in permits, its not just adding an antenna what T mobile is doing, Sprint is replacing everything.

    I am enjoying every bit of New Sprint Spark.

    http://www.speedtest.net/my-result/a/859842668

  • SonoranSnoozer

    All the big cable/TV/Internet/Wireless monopolies and oligopolies hate t-mobile because they aren’t going along with the program, so to speak. They are an outlier who has the nerve to give customers what they actually want. Because t-mobile is driving competition in the marketplace, it makes them a major irritant to the bloated oligopolies and a prime takeover target. We shall see if regulators have the cojones to stand up to the big money industry players and keep t-mobile from being swallowed up. Same with the Comcast TWC merger. If anything Comcast needs to be broken up like AT&T was. Allowing it to become even more of a monopoly is a frightening prospect.