Sprint has been hemorrhaging money and customers for years. I have no idea why this merger is being fought. It’s not like Sprint is a real competitor.
But back on topic: Boost is just an MVNO running on Sprint’s CDMA network. What worse combination of technology can you have than being on Sprint’s network and CDMA?
I'm not a fan of Sprint and I don't think they provide a lot of competition in the industry, but...
Sprint hasn't been hemorrhaging customers. Between 2007 and now, Sprint has basically stayed flat at 54M customers in 2007, hitting a low of 48M customers in 2010, peaking at 60M customers in 2016, and back down to 54M customers today. http://tinyurl.com/carriertotals - this hasn't been updated in a while, but it's clear to see that Sprint has just been pretty steadily mediocre.
I think the merger is being fought because it's really hard to introduce a new wireless carrier. There's a limited amount of spectrum and as high-bandwidth applications take root, the barrier to entry increases. There's no only the inertia of customers and the normal barriers that companies have, but the hard barrier of not having spectrum.
Likewise, even when you're doing stellar, it's hard to make a dent in the distance between you and other companies. T-Mobile has been doing amazing things since current management took over in 2013. Still, despite T-Mobile basically getting all the industry growth over the past 6 years, they're a distant third to AT&T and Verizon. If someone were to launch a new carrier, it would likely take a decade or two before it started really making a difference.
It's also hard to say how much, if any, competitive pressure Sprint is putting on the industry. Sprint had been offering a free year of service (a $2,000 value for a family of 4) and had few takers. They've been offering $25/mo unlimited service for life (for a single line) and had few takers despite being less than half the price of competitors. When T-Mobile (re)introduced unlimited, Verizon and AT&T were forced to do the same. When Sprint makes moves, no one pays attention. However, if Sprint weren't there, would prices go up? It's certainly possible.
Similarly, it's unclear how long Sprint can hold on financially. They haven't been doing great and they'll need to make a large 5G investment in the coming years as their debt payments mount. However, Sprint has hung on for a long time under mediocre finances.
I think there's definitely the idea in many people's head that Sprint could team up with someone other than T-Mobile to provide a rejuvenated 4th carrier. However, the economies of scale and debt that Sprint has don't provide a lot of good options. Cable companies are likely to be hesitant to buy what is a losing business with crippling debt. If the deal doesn't go through, Sprint's market cap is likely to shrink and it's unlikely that SoftBank (Sprint's majority owner) would want to sell at that low valuation and it's unlikely that cable companies (or anyone else) would want to offer a premium. That kinda creates an impasse.
I think it's unlikely that Sprint could get a different partner on terms that SoftBank would accept. SoftBank drove a hard bargain and T-Mobile was willing to pay a premium for Sprint because they'd get the economies of scale one gets from 130M customers and one network. Would SoftBank be willing to accept half of what they'd be getting from T-Mobile? Probably not. "Half" might sound extreme, but it's also probably accurate. The deal is probably worth $38B to SoftBank conservatively assuming that the combined company is worth 20% more together than separately. Before the merger talk started back up, Sprint was worth $20B and that's when there was still the possibility of a merger, just no concrete talks. If a merger with T-Mobile is definitively dead, Sprint would probably sink below that - I'd say a 20-30% drop below that seems likely. So, without the T-Mobile merger, Sprint's market value goes so low that I don't see SoftBank being willing to stomach the loss. In fact, SoftBank bought into Sprint at a valuation of $28B. If they sold to anyone other than T-Mobile, they'd have to lock in a substantial loss.
Again, I tend to agree with your position, but I can also see why people really want to believe in a 4th competitive carrier. Losing competition isn't great. Yep, Sprint doesn't really seem competitive, but there is still that hope they might be competitive someday. Maybe someday they'll find a partner that will rescue them, maybe someday they'll find magic technology that will make them better.
"Maybe someday" could be the story of Sprint since the Nextel merger. Maybe someday Sprint will get broad coverage having acquired the low-band spectrum in the Nextel deal. Maybe someday WiMAX will rule the world. Maybe someday LightSquared will give Sprint an amazing LTE network. Maybe someday Sprint will buy Clearwire and use its deep spectrum to create the best experience. Maybe someday SoftBank will make Sprint amazing like their Japanese network. Maybe someday HPUE will magically make their 2.5GHz spectrum better. Maybe someday massive-MIMO will make their LTE network offer gigabit speeds everywhere.
But "maybe someday" still offers hope. While Sprint is independent, there's still hope that wireless could become a true 4-competitor market in the US. Once Sprint is gone, that hope is (mostly) gone.
(Also, Boost is an MVNO on Sprint, but if this deal goes through, it would be an MVNO on T-Mobile. So, any objection to the technology or current network situation isn't really important. The Boost MVNO would be running against T-Mobile's network as customers handsets allow and as customers upgrade.)
They don't want Sprint or CDMA. They want whatever contract is in place that allows Boost to be a T-Mobile MVNO. If I had to guess, the contract also has a renewal clause that allows Boost to renew the MVNO agreement further into the future than 5-6 years, at reasonably favorable terms whether tmobile wants to keep them or not, barring any major malfeasance.
Correction: Boost is not a T-Mobile MVNO, it's a Sprint MVNO. I think Amazon wants assurances that the terms Boost has with Sprint will carry over to the new T-Mobile/Sprint entity.
> Yeah, regarding the merger I’d rather have T-Mobile as a larger and stronger competitor against AT&T and Verizon.
Counterargument: T-Mobile has been bleeding users hard off AT&T (the only US carrier to be declining in all sectors). Churn is low and postpaid adds are the highest in the industry. They have proven they do not require a merger to be successful.
>"What worse combination of technology can you have than being on Sprint’s network and CDMA?"
Please explain why CDMA is so bad. Your post is devoid of any technical details for such an assertion. CDMA has a number of advantages over GSM that informed Verizon decision to go with it in the first place. Advantages of CDMA include operating very well in noisy environments, soft hand offs, and better spectrum utilization(frequency hopping)which allowed unlimited subscribers per cell.
Verizon, who as much as I dislike them as a company has one the best networks in the US in terms of both call quality and coverage.
And Verizon is shutting down their CDMA network at the end of the year. It's an old technology that is being sunsetted. The problem with Sprint is that they are still relying on it for far too much (and they don't have broad enough spectrum holdings to make dual networks work well).
Additionally, a lot of Sprint's rural coverage relies on Verizon CDMA roaming -- which will be going away as Verizon sunsets their network.
But you’re also stuck with a phone that doesn’t work anywhere else. When you get into the boondocks when you are downgraded from their LTE network to their CDMA network you get much slower data than when you are downgraded from LTE to GSM.
Which doesn’t help because you still need a CDMA capable phone. That automatically means you both have fewer choices of phone on the network and most of the phones you get don’t work on GSM networks.
That also means it downgrades to a much slower network than GSM.
I mean, the technology is used in most current wireless standards, so the complaint has to be that you can only use phones that are compatible with Sprint and the largest wireless network in the US?
GSM is a global standard that lets you use any phone just by putting in a sim. CDMA is not widely supported outside of the US. But even worse, CDMA is slow compared to GSM (HSDPA).
> What worse combination of technology can you have than being on Sprint’s network and CDMA?
You can just stack even more shit on the shit: it's branded as Google Fi and requires a modified firmware and app to hand off the calling layer between Sprint or T-Mobile.
I have no idea why this merger is being pursued. Take away Boost and Sprint's spectrum allocation, they have nothing left to bring to the table, aside from 50 customers and a shit network. What's the appeal there?
Unlike what Sprint did when it bought Nextel, when T-mobile bought MetroPCS, it rapidly shit down MetroPCS’s network and integrated it with its own. MetroPCS wasn’t just an MVNO. I would think T-mobile would do the same with Sprint.
Boost is an MVNO that runs off of Sprint's networks today, but the sale of Boost is a commitment [1][2] T-Mobile made as part of their efforts to get the FCC to approve their merger with Sprint, with some very generous terms.
Remember that with LTE, there's no longer a divide between the GSM camp and the CDMA camp; it's the same LTE, although each carrier operates on various bands.
With the merger, and as phone firmwares are updated and incompatible handsets are cycled out, the combined LTE network is compelling. With Boost's current target market of urban youth, the fact most current Boost phones only support the Sprint's CDMA2000 3G and not T-Mobile's GSM-flavored 3G is less of an unfortunate fit than with a more general MVNO.
> Remember that with LTE, there's no longer a divide between the GSM camp and the CDMA camp; it's the same LTE, although each carrier operates on various bands.
Don't they have antennas in different locations though? Like even if your phone doesn't have compatibility issues with SIMs or bands, calling it "the same LTE" makes it seem like you could just pay someone else and get reception in the same areas which I don't think is the case?
It's more that most phones support most of the bands all the US providers use, so when the roaming policy changes, a lot of the phones will still work. The phone will be able to register with the roaming network.
Also, they can set up the antennas to broadcast on multiple MNCs, so it looks like a native network (i.e. T-Mobile can run LTE towers that broadcast as both the T-Mobile and old Sprint network so all Sprint phones can connect without a problem) (of course, this depends on Boost phones supporting VoLTE).
Your phone using a different-besides-your-home network is called 'roaming' and it's not uncommon. For this to happen, your phone needs to know which networks it should try to authenticate against.
A while back, Sprint and T-Mobile announced they'd launch a roaming agreement for LTE that would last for 4 years, and that would be honored even if their merger doesn't go through. According to some people [1] this went into effect in Summer 2018.
I wonder if Amazon or the T-Mobile/Sprint side leaked this? Perhaps T-Mobile/Sprint weren't eager enough to sell, so Amazon wants the regulator to know an offer was made.
This would be a win-win. Tmobile and Sprint get their merger and a bucketload of cash to build out their 5G infrastructure. Amazon gets to piggyback off of their network and potentially claim some wireless spectrum.
I'm sure Amazon has evaluated every company that's available for sale at some point, but I'm willing to bet that's as far as their interest in Boost goes. This deal makes very little sense for them.
I didn't realize Boost mobile still existed. Would be interesting to see Amazon build a google FI competitor which also rides on t-mobile spectrum in the US.
I doubt they want to start a cell company, more likely it is to have favorable terms for embedding 4G into Echo devices, making car and portable echos possible. They have done this for years w/Kindle, which would also benefit.
I doubt that would be the intention. At least not only that.
Amazon has some incredible network effects that would create a compelling cellphone service offering. They could bundle cellphone plans as an extra in Prime an undercut competition while giving unlimited access to Amazon.com, Alexa, Twitch etc.
Having a cellphone company makes a lot of sense for any of the big tech companies. It allows them to create end-to-end experiences that are compelling just because they can vertically integrate different moments of their customers journey.
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But back on topic: Boost is just an MVNO running on Sprint’s CDMA network. What worse combination of technology can you have than being on Sprint’s network and CDMA?
Sprint hasn't been hemorrhaging customers. Between 2007 and now, Sprint has basically stayed flat at 54M customers in 2007, hitting a low of 48M customers in 2010, peaking at 60M customers in 2016, and back down to 54M customers today. http://tinyurl.com/carriertotals - this hasn't been updated in a while, but it's clear to see that Sprint has just been pretty steadily mediocre.
I think the merger is being fought because it's really hard to introduce a new wireless carrier. There's a limited amount of spectrum and as high-bandwidth applications take root, the barrier to entry increases. There's no only the inertia of customers and the normal barriers that companies have, but the hard barrier of not having spectrum.
Likewise, even when you're doing stellar, it's hard to make a dent in the distance between you and other companies. T-Mobile has been doing amazing things since current management took over in 2013. Still, despite T-Mobile basically getting all the industry growth over the past 6 years, they're a distant third to AT&T and Verizon. If someone were to launch a new carrier, it would likely take a decade or two before it started really making a difference.
It's also hard to say how much, if any, competitive pressure Sprint is putting on the industry. Sprint had been offering a free year of service (a $2,000 value for a family of 4) and had few takers. They've been offering $25/mo unlimited service for life (for a single line) and had few takers despite being less than half the price of competitors. When T-Mobile (re)introduced unlimited, Verizon and AT&T were forced to do the same. When Sprint makes moves, no one pays attention. However, if Sprint weren't there, would prices go up? It's certainly possible.
Similarly, it's unclear how long Sprint can hold on financially. They haven't been doing great and they'll need to make a large 5G investment in the coming years as their debt payments mount. However, Sprint has hung on for a long time under mediocre finances.
I think there's definitely the idea in many people's head that Sprint could team up with someone other than T-Mobile to provide a rejuvenated 4th carrier. However, the economies of scale and debt that Sprint has don't provide a lot of good options. Cable companies are likely to be hesitant to buy what is a losing business with crippling debt. If the deal doesn't go through, Sprint's market cap is likely to shrink and it's unlikely that SoftBank (Sprint's majority owner) would want to sell at that low valuation and it's unlikely that cable companies (or anyone else) would want to offer a premium. That kinda creates an impasse.
I think it's unlikely that Sprint could get a different partner on terms that SoftBank would accept. SoftBank drove a hard bargain and T-Mobile was willing to pay a premium for Sprint because they'd get the economies of scale one gets from 130M customers and one network. Would SoftBank be willing to accept half of what they'd be getting from T-Mobile? Probably not. "Half" might sound extreme, but it's also probably accurate. The deal is probably worth $38B to SoftBank conservatively assuming that the combined company is worth 20% more together than separately. Before the merger talk started back up, Sprint was worth $20B and that's when there was still the possibility of a merger, just no concrete talks. If a merger with T-Mobile is definitively dead, Sprint would probably sink below that - I'd say a 20-30% drop below that seems likely. So, without the T-Mobile merger, Sprint's market value goes so low that I don't see SoftBank being willing to stomach the loss. In fact, SoftBank bought into Sprint at a valuation of $28B. If they sold to anyone other than T-Mobile, they'd have to lock in a substantial loss.
Again, I tend to agree with your position, but I can also see why people really want to believe in a 4th competitive carrier. Losing competition isn't great. Yep, Sprint doesn't really seem competitive, but there is still that hope they might be competitive someday. Maybe someday they'll find a partner that will rescue them, maybe someday they'll find magic technology that will make them better.
"Maybe someday" could be the story of Sprint since the Nextel merger. Maybe someday Sprint will get broad coverage having acquired the low-band spectrum in the Nextel deal. Maybe someday WiMAX will rule the world. Maybe someday LightSquared will give Sprint an amazing LTE network. Maybe someday Sprint will buy Clearwire and use its deep spectrum to create the best experience. Maybe someday SoftBank will make Sprint amazing like their Japanese network. Maybe someday HPUE will magically make their 2.5GHz spectrum better. Maybe someday massive-MIMO will make their LTE network offer gigabit speeds everywhere.
But "maybe someday" still offers hope. While Sprint is independent, there's still hope that wireless could become a true 4-competitor market in the US. Once Sprint is gone, that hope is (mostly) gone.
(Also, Boost is an MVNO on Sprint, but if this deal goes through, it would be an MVNO on T-Mobile. So, any objection to the technology or current network situation isn't really important. The Boost MVNO would be running against T-Mobile's network as customers handsets allow and as customers upgrade.)
Counterargument: T-Mobile has been bleeding users hard off AT&T (the only US carrier to be declining in all sectors). Churn is low and postpaid adds are the highest in the industry. They have proven they do not require a merger to be successful.
Please explain why CDMA is so bad. Your post is devoid of any technical details for such an assertion. CDMA has a number of advantages over GSM that informed Verizon decision to go with it in the first place. Advantages of CDMA include operating very well in noisy environments, soft hand offs, and better spectrum utilization(frequency hopping)which allowed unlimited subscribers per cell.
Verizon, who as much as I dislike them as a company has one the best networks in the US in terms of both call quality and coverage.
Additionally, a lot of Sprint's rural coverage relies on Verizon CDMA roaming -- which will be going away as Verizon sunsets their network.
That also means it downgrades to a much slower network than GSM.
I mean, the technology is used in most current wireless standards, so the complaint has to be that you can only use phones that are compatible with Sprint and the largest wireless network in the US?
You can just stack even more shit on the shit: it's branded as Google Fi and requires a modified firmware and app to hand off the calling layer between Sprint or T-Mobile.
(EDIT: The shit I'm referring to are carrier application/backdoors like this, without them the phone will not work on network: https://gist.github.com/thestinger/171b5ffdc54a50ee44497028a... )
Also note, nothing like that is required for a phone on any other US carrier, just Fi and Sprint are special.
Remember that with LTE, there's no longer a divide between the GSM camp and the CDMA camp; it's the same LTE, although each carrier operates on various bands.
With the merger, and as phone firmwares are updated and incompatible handsets are cycled out, the combined LTE network is compelling. With Boost's current target market of urban youth, the fact most current Boost phones only support the Sprint's CDMA2000 3G and not T-Mobile's GSM-flavored 3G is less of an unfortunate fit than with a more general MVNO.
[1] https://newtmobile.com/wp-content/uploads/2019/05/FCC-Filing... [2] https://web.archive.org/web/*/https://newtmobile.com/wp-cont...
Don't they have antennas in different locations though? Like even if your phone doesn't have compatibility issues with SIMs or bands, calling it "the same LTE" makes it seem like you could just pay someone else and get reception in the same areas which I don't think is the case?
Also, they can set up the antennas to broadcast on multiple MNCs, so it looks like a native network (i.e. T-Mobile can run LTE towers that broadcast as both the T-Mobile and old Sprint network so all Sprint phones can connect without a problem) (of course, this depends on Boost phones supporting VoLTE).
A while back, Sprint and T-Mobile announced they'd launch a roaming agreement for LTE that would last for 4 years, and that would be honored even if their merger doesn't go through. According to some people [1] this went into effect in Summer 2018.
[1] https://www.reddit.com/r/Sprint/comments/9548zg/tmobile_data...
There is, because you're not always on LTE. Eventually LTE will be ubiquitous I'm sure, but right now it's still a concern.
Amazon has some incredible network effects that would create a compelling cellphone service offering. They could bundle cellphone plans as an extra in Prime an undercut competition while giving unlimited access to Amazon.com, Alexa, Twitch etc.
Having a cellphone company makes a lot of sense for any of the big tech companies. It allows them to create end-to-end experiences that are compelling just because they can vertically integrate different moments of their customers journey.