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Robert Syputa  

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  • Is There Froth In The Water For Sprint? [View article]
    That little birdie sounds like so much uninformed bullshisa heard over the years. Yahoo, Google, and Alibaba try to do as much business as they can with all operators. I have followed the operators and the Internet services providers for over 15 years, interviewing and meeting with them during which I have repeatedly asked about their positioning on services between operators and service suppliers. They are in business to work with operators but very seldom do exclusive deals because that would jeopardise their relationships with others in the broader market.

    The broad statements are meaningless: what does it mean in the unlikely event that the rumor were true? What financial benefit can Sprint receive from Yahoo, Alibaba that will not similarly be available to all others?
    Sep 3, 2015. 12:09 PM | Likes Like |Link to Comment
  • Sprint Continues To Be Desperate [View article]
    That is likely the case. However, the chain of events was very untypical of short selling in general and Sprint in particular: Short interest has continued to rise over the last two reporting periods. The SI data is the reported for the previous two week period with some of that data being dated by the time it is compiled and reported 2-5 days latter. Nonetheless, the increase was sustained through the period of the decline. Near 3.10 the stock began a technical bounce and was on the way up when Softbank initiated buying. That very likely led to some short covering that added to momentum and Softbank's buy volume.

    Sprint must increase the number of subscribers in order to make their network capex spending work. A basic problem with using higher frequency 2.5-2.6GHz Band 41 spectrum is that it requires higher density to achieve coverage and in-building penetration. That comes at a proportionally higher cost that creates a supply vs. demand ROI problem for Sprint that has persisted over the past 15 odd years they have held amounts of the spectrum. "If we build it, we must fill it" is a warping of the 'if you build it, they will come' axiom that fits.
    Sep 3, 2015. 11:06 AM | Likes Like |Link to Comment
  • Is There Froth In The Water For Sprint? [View article]
    That is hardly so obvious: Sprint could be viewed as spiraling out of control financially despite the yet figurative degree of 'turn around'. Sprint has a $35 billion+ debt. Because of the much worse credit rating than Verizon or AT&T, Sprint pays about 4 points higher interest rates. Unable to borrow to the degree needed to remain long-term competitive in networks, the near term improvement in network performance as reported by RootMetrics and other surveys, can be seen as a cyclical stage of competitive improvement that will pass.

    RootMetrics most recent report continues to show that Sprint lags in bandwidth-to-coverage. What that means: Sprint uses 2.5-2.6GHz extensively. While that provides high bandwidth where it covers, penetration into buildings and less urban areas is lower. The average service quality must be understood based on a further read of such reports. Both Sprint and T-Mobile have less robust and deep service capacity than VErizon or AT&T.

    I and other analysts have asked the questions about the rationale and impacts of Softbank's buying of Sprint shares:

    Sprint's stock was under attack by short sellers: for the first time in over 10 years, short selling in Sprint (S) increased as the stock plunged down to long term lows near $3.10. Short interest during that period shot to the last reported level of 143 million shares which was at the time Softbank began acquiring the additional ~5% to bring their total, if fully executed, to 85%. Sprint had previously announced an outline of a plan to deploy about 70,000 additional or updated smallcell multiple-band base stations. Vendor financing would provide a form of a short term loan that pays for equipment, leaving the larger expense of site and deployment expense yet unaccounted for. Short sellers, including hedge funds and probably debt holders, surmised that Sprint would be forced to dilute the shares with an inconveniently timed equity offering. Financial analysts, including Moffett forecast that Sprint would run out of financial rope sometime in 2016. A financial analysis showed that Sprint was vulnerable to a financial spiral that would drive down the stock in the face of inability to borrow to keep up the pace of industry network improvements and expansion into mobile media. Therefore, a prime motivation was to reverse the bear raid by short sellers that was helping to drive the stock price down to $3 and possibly lower. Softbank saw the combined threat and opportunity: an investment at the time of higher short interest could drive short coverage and bullish short-term trend buying. Due to circumstances, an investment of 'just' a few hundred millions could improve the value of Softbank's stake by billions of dollars. The recent reports show valuation has increased by about $7 billion since Softbank initiated the increase in position. Overall increase from the low is higher, at about $11 billion as a technical bounce was underway.

    Investors who know enough, soon enough, can ride the trends. The trends in the stock caused by technical trading dynamics, (a technical bounce for example), or by a corporate stock accumulation do not have direct impact on the fundamentals of network competitiveness or cash flows. A probably rationale was to prevent further deterioration in ability to finance network improvements needed to step up and maintain competitiveness long enough for it to matter, i.e. pay off some of the massive debt, refinance at more favorable rates to reduce debt service under the current $0.45 billion per quarterly drain.
    Sep 1, 2015. 04:20 AM | Likes Like |Link to Comment
  • Why A Comcast And T-Mobile Merger Would Be A Blessing In Disguise For Sprint [View article]
    The FCC and DOJ want Sprint to innovate competitively using LTE-Advanced technology. Sprint's spectrum is suited to smallcells similar enough to 2.4GHz WiFi that borders the 2.5GHz band. There is no excuse for being out of date in the approach to network design and deployments.

    FCC+DOJ won't allow Sprint to merge with T-Mobile despite having already been headed toward bankruptcy at the time Softbank, a foreign company, was given the highly unusual, (first and only time), to acquire over 80% of Sprint. Softbank/Masa Son, at that time, promised to turn Sprint into an engine of technological and market innovation that would show competitors to have been moribund in their ways. It was not part of the bargain that we now ignore the promises of innovation as a customary lie. Masa Son's feet should be held to the fire to, instead, innovate enough to become profitably competitive in networks and services. Our, government should not now allow yet another national carrier to be acquired by Softbank, a foreign entity, with no clear plan to do more than strip out costs in order to become more useful to our society.

    Innovation requires fresh methods, not just layering of marketing approaches on top of bankrupt networks. Integration of network and business approaches that results in more competitive network is feasible but requires disruptive innovation. Or Sprint can go out of business by attrition of networks and subscriber base to competitors over several years and billions of additional losses that Softbank must shoulder.

    Innovate or die.
    Sep 1, 2015. 03:30 AM | 1 Like Like |Link to Comment
  • Sprint Continues To Be Desperate [View article]
    The question of the timing of the offer is misplaced: Sprint and all mobile operators are in the business of spending multiple billions of dollars up front on networks, services, device development and fielding, and operations that must result in requisite gains in subscription revenue. Sprint's market position, along with T-mobile, forces them to compete based on price and creative packaging of services if they hope to capture share from market leaders Verizon and AT&T.

    The industry has matured and become saturated. Systemic of that, Sprint recently reported their lowest rate of churn in company history. While that signals a probable end to the damaging period of network disruption caused subscriber churn, it also signals that it has become difficult for operators to take share from each other. Networks have gravitated towards use of the same core technology platforms, coverage and service quality metrics, and devices... i.e. service has become more a commodity with narrower differentiation between operators. In this competitive climate every significant shift among major operators in their networks and service offerings, particularly those which are disruptive to current customer relationships, must be pursued. Sprint is seizing on the obvious:

    AT&T's acquisition of DTV creates a decision point for a large portion of DTV's 20.3 million subscribers who must choose whether to stay with one of AT&T's competitors, including Sprint's subs, or take advantage of a discount offered for AT&T+DTV and the convenience of a single bill.

    In a low churn environment, the time to strike is when a significant slice of the market faces a decision.

    Sprint's decision to offer DTV customers a free year of service makes good sense: The cost of acquiring new customers (rather than add-on subscriptions) equates to several hundred dollars. It has proven very difficult for Sprint to take back some of the greater than 11 million subs lost
    over the past few years, making this a lesser of evils marketing attempt.

    Another aspect is that Sprint must rebuild while carving out a new image based on the more mature carrier environment. While not likely to call it such, Sprint must present the image of the "Un-Carrier" operator alongside T-Mobile. While these two spar with each other, the main message is that they are willing to fight against the BORG Empire established by their nemesis Verizon and AT&T. Sprint must break the mold in respect to how the company has come to be perceived: holding on for too long to past networks that caused too little gains compared to pain for customers.

    This move does come with a cost. However, Sprint does not have the luxury of having accomplished the goal of 'best network', coming from behind VZ and T in coverage and bandwidth-to-coverage metrics in most markets. Even while S has made improvements, the brand perception lags, making the give away of service to fill up the network a good move.

    Furthermore, in a low churn, mature market, the decision point for gaining new subscribers has narrowed. That focussing of opportunities down to the choice moments when customers are making decisions places more emphasis on overcoming barriers to change: since operators look more alike in network quality and coverage and devices offered, the chrysalis of the decision hinges more on user device-dependent usage habits. users have become more attached to their devices rather than the network it runs on. At the point they are faced with a decision that otherwise forces them to change the device is the exact time to strike with aggressive marketing offers.

    Sprint's Direct 2 You personal sales campaign helps to transition customers to new devices by porting over setup, contacts and applications. While not avilable everywhere, it fits in well with the free year of service offer.

    Sprint has remaining issues of higher cost-to-coverage of network deployments that plague the bottom line. This sales offer is not aimed at a quick fix to the miserable cash flow situation but is on target for the dynamics of the market environment.
    Aug 30, 2015. 10:10 AM | 4 Likes Like |Link to Comment
  • Oppenheimer: Comcast may be most likely buyer for T-Mobile [View news story]
    Mobile tying up with content and invading the broadband Internet space is a fact of life: the 'XYZ Generation' is coming up using only mobile devices for everything outside of school or workplace broadband connections. And while many typical households retain cable, fiber or DSL connections and a VoIP or wireless phone connection, the usage has been shifting to the point that cutting the cord becomes an easier choice. That leaves the cablecos in a market that is destined towards shrinking. While that has long been talked about in the past, it is now the reality of the business environment.

    The shift to mobile networks is not something that has been figurative.. just a concept that never happens: The technology shift to MIMO-OFDMA based LTE wireless and IP networks has been long in development for a reason: the capacity and cost factor had to reach a crossing point where it could replace cable and fiber for all but the highest capacity requirements. It has reached that point... but that is an oversimplification. It is not wireless networks per se that have reached a crossing point with wired networks but ICT, Internet and Communications Technology, industry which is a convergence of wired and wireless transport. To deliver high wireless capacity at low latency for video, VoLTE and cloud applications requires hybrid wired-wireless networks. That makes the merger of wireless and cable companies potentially more profitable and, certainly, more survivable for the cablecos.

    Will Comcast try to acquire T-Mobile or basket case Sprint? That remains unclear. Deutsche Telkom is rightly in no hurry to sell T-Mobile. Comcast might use advances in WiFi and more unlicensed spectrum to push their own form of near-mobile or what used to be called 'nomadic' wireless experience. Thus far that does not appear to show much promise. T-Mobile may, on the other hand, wait for mobile broadband to erode marketshare from cable while giving away more WiFi routers to provide indoor WiFi-to-4G coverage for mobile devices. With DISH running into its own paradox about what to do with spectrum, T-Mo may find it is in a better position to pick up assets and gain share as cable and satellite head into steeper decline.
    Aug 26, 2015. 11:21 AM | Likes Like |Link to Comment
  • Oppenheimer: Comcast may be most likely buyer for T-Mobile [View news story]
    A combination with DISH Network would be a fair choice. However, Comcast is better imo:

    A frequent assumption is that the combined spectrum of DISH plus T-mobile would catapult the combined company to a leadership position. That may not be quite so: the FCC guidelines calls for no operator to hold more than 1/3 of a bandwidth category of low, mid, or high frequency band spectrum. TMUS+DISH would go very close or over that limit in the mid-band. That might cause the FCC to force a portion to be sold or exchanged with another carrier for low (unlikely) or high band spectrum (more likely as Sprint would likely be willing to swap some of their messy LTE Band 41 for mid-band).

    The combination with DISH would make sense regardless of possibly being required to divulge some mid band. However, DISH has no terrestrial network, no base stations, no backhaul network or fiber optic grid network.

    Comcast does not have spectrum. However, it has capital and borrowing capacity and has the benefit of being preferred by Deutsche Telekom according to their CEO. Importantly, Comcast and other cablecos have the most extensive networks of fiber optic and broadband cable that can serve as fronthaul/backhaul to the 'massively densified' mobile network envisioned for the future. The combined Comcast+T-Mobile could build upon the combined infrastructure that exploits convergence of mobile broadband and cable/fiber assets.

    What's more, DOCSIS 3.1+ provides a path to increase the cable plant to ~750Mbps now to over 1.2Gbps over the next five years with the lower latency needed to support VoLTE and real time video services. Comcast/cablecos bring content services to the table that can be sold as a combined part of quad-play fixed-mobile services starting now.
    Aug 23, 2015. 12:32 PM | 1 Like Like |Link to Comment
  • Oppenheimer: Comcast may be most likely buyer for T-Mobile [View news story]
    Telecommunications companies in general get much scorn from consumers. However, both of these companies have tens of millions of customers.. the market votes with their wallets every day and they pass well enough.

    Cable companies have among he worst consumer opinion ratings of all service businesses. The jokes about 'the cable guy' showing up at the wrong time if at all is common lore. Wireless users typically have a love-hate relationship with their service providers.. they complain and complain but, in the end, continue to buy the service.

    That is not what this merger is about: the coming together of cable and wireless is inevitable because broadband usage is converging.

    Comcast is a cash-cow business that has complementary infrastructure and content delivery assets that can be leveraged over wireless networks. Cable is at a stage of saturation with decline in the offing as wireless broadband eats into traditional wired services. So, the logic that Comcast is the best suitor for T-Mobile is a no brainer.
    Aug 20, 2015. 08:14 PM | 3 Likes Like |Link to Comment
  • Google's Project Fi: Who Gets Hurt? [View article]
    This question is the whimsy of stock or industry newbie speculators . Google will never buy a major mobile/ICT operator because that is a basic conflict with their business model. This speculation misconstrues Google's tinkering around the edges of the various bit transport media and technologies that are intended to spur industry innovation and adoption of technology towards open, high-bandwidth pipes. Google's business model must have access to all major transport media with least amount of walling off of media/content, advertising, payment platforms, and, or course, search in all its forms.

    Google went to great lengths to assure mobile/ICT operators around the world that their Project Fi efforts aspirations are limited to pushing the edges of interworking between WiFi and WRAN, Wide-area Radio Access Networks that would not much compete with their mobile industry partners.

    Name one Google effort that has grown to compete with major network operators. Name one technology project that has changed the industry.

    Google helped develope White Spaces technology which was lame by design.

    Google's fiber optic project remains limited to a few metro areas... and has 1% of the US population as subscribers.

    Project Fi presents a similar intentionally castrated adoption model: While it shows promise as an example for how current technologies and standards can be put to service as a 'best connected network of networks', it is being offered to a limited number of users, using one mobile device (for now anyway).

    Mobile operators remain in strong control over their environment: WiFi is limited in range by regulation of the spectrum it rides on: the frequencies made available are 'junk spectrum' once deemed unsuitable for mobile use. What makes it suitable is that individuals and companies (the public) deploy hundreds of millions of WiFi routers at there cost with a few million (a few percent) deployed by operators or partnering HotSpot operators. WiFi will remain castrated by design with the primary choice for widespread connectivity remaining the use of WRAN networks.
    Aug 10, 2015. 09:46 AM | Likes Like |Link to Comment
  • Google's Project Fi: Who Gets Hurt? [View article]
    I agree with your general thinking: Wireless technologies have evolved over the decades to avail a broader vision for how universally it can be used. At the dawn of the wireless age, before the FCC was established by the US Congress, spectrum use was pretty much a land grab. According to the legal definition of spectrum rights, it is owned by US citizens, managed on our behalf by the FCC and other branches of government. Operators are granted licensed monopolies over parts of it under the mandate to make best use of it in the public interest. That concept has morphed recently more into "make the most money for government to be spent elsewhere" or replenish the national debt. That somewhat distorts the avowed purpose to use it in the best interests of all citizens and industry toward use in the interest of those who have the most marketshare to afford spending billion$ on auctions. The justification is that capital formation allows nationwide networks and services to be built. However, a counter argument is that managed mobile networks are 3x-5x less efficient use of national wealth, delivering fewer/slower innovations.

    As a means of deployment, mobile networks have up to twenty times the cost per bit than primarily self-managed WiFi networks. That is not an entirely fair assessment because WiFi networks have limited coverage and service is ad hoc.. at the discretion of the chaotic environment of citizen installers.

    However, a major reason WiFi has limited coverage is because it has limited, high frequency spectrum, very restricted power levels, and was designed to have short range and to, inadvertently, cause interference between users due to the approach to spectrum sharing.

    What if instead of licensing spectrum just for mobile use it was licensed as a tiered, common technology platform using adaptive modulation and spectrum access based on converged 802.11ax and LTE-A technology?

    That is technologically possible and market momentum and critical mass makes it within the realm of commercial feasibility. However, it is unlikely to happen as orchestrated in a logical fashion by the FCC and with cooperation of mobile and Internet industries (ICT).

    The reason why WiFi spectrum was once thought to be unusable is because the technology was unsuited for its use. Frequency domain technologies have (begun) to change the limitations into somewhat of an advantage over lower frequency bands because shorter range of signal propagation allows higher spectrum reuse via MIMO-OFDMA, CoMP, Co-MIMO/MU-MIMO technologies. The reason why it was made available was because mobile and other industries thought it less useful... when evolution of technology changed that, mobile operators coveted its use.
    Aug 5, 2015. 08:56 AM | 1 Like Like |Link to Comment
  • Google's Project Fi: Who Gets Hurt? [View article]
    WiFi has been both a phenomenal success, achieving use in over 11 billion devices worldwide including some 6 billion mobile phones and tablets... it has become the most universal connectivity technology. WiFi also ranks 3-10 times the data density of 4G because 'cells', i.e.. WiFi coverage areas are small, providing area to area reuse of the same, primarily 2.4GHz, spectrum band.

    Despite this huge popularity, WiFi has also served as a great boon to mobile operators: Instead of cannibalizing mobile revenue, WiFi allows operators to offload over 60% of bandwidth needs. Most of the offload capacity is provided by consumers at home, work and meeting places. Operators, despite having some HotSpot availability, get a free ride on WiFi connected to cable or other broadband Internet connection. What is there not to like about that equation? What was considered to be a threat to mobile operators mostly has turned out to be a highly cost effective way to achieve extended coverage and capacity.

    T-Mobile has been the most aggressive US operator to seize upon WiFi's capabilities. The company sends contract subscribers, upon request, a free 802.11ac (Asus) router that has a customized operating system ROM that enables relatively seamless handing off of calls and data connections between the local wifi and 4G LTE network. Google's Project Fi is based more on the model called "WiFi First" which puts emphasis on the WiFi connection, offloading that connection only when a WRAN, wide area radio access network, connection is not available.

    Is Project Fi participation profitable to mobile operators? T-Mobile and Sprint are the underdogs with combined marketshare about equal in subscriber numbers to either Verizon or AT&T. However, the difference in customer mix and profitability widens the overall gap between the two bottom feeders and the larger fish. S and TMUS have lower ARPU/ARGU, profit margins, and net profits. In fact almost all industry profits are enjoyed by VZ and T. As such, the two 'junk yard dogs' must be disruptive players, taking advantage of every available means to improve coverage and capacity while lowering costs.

    An analysis of giving away extended coverage 802.11ac WiFi routers with voice and data handover capabilities on a ROI basis looks like a sound investment: The landed cost of the .11ac router is about $50. Including shipping and customer service cost, say $100-$150. The units smartly increases in-door coverage and bandwidth with very little additional network infrastructure, maintenance or operation costs. The customer even pays for the electricity. No local permits, environmental clearances, truck rolls of installation crews, etc. are necessary.

    What the operator keeps out of this self-instigated 'WiFi First' approach is another layer of customer stickiness/loyalty.

    What is the threat that Google Fi or Apple's rumored but unlikely similar effort? It is limited because neither want to threaten among their primary customers, the operators. When announcing Project Fi, G purposely made it very clear they have no intent to compete on a large scale. Google posits the effort as pushing technology forward, giving it the ability to try new things such as media content, edge network delivery, and improvements in seamlessness between WiFi and 4G and beyond networks.

    T-Mobile and Sprint must pursue this and should do so despite potential for disruption. There is a term to describe disruption in less efficient business models: competition.
    Aug 4, 2015. 03:09 PM | 4 Likes Like |Link to Comment
  • Verizon: 10%+ Free Cash Flow Yield And Low Valuation Make This Dividend Powerhouse A Buy [View article]
    Despite being in an exciting industry that impacts much commercial, government and individual activity, I agree that Verizon is a nicely boring investment.

    The attention given to the telecom/ICT sector probably adds some volatility to an otherwise boringly efficient historical and projected cash flow scenario. For example, when fears have risen regarding T-Mobile and then Sprint's 'price war' this may have contributed undue volatility in VZ. As quarters have thus proven, the impact of the alleged price war has been minimal. Largely this is due to the fact that prices trend down as a matter of course. Since the first cellular voice networks, unit prices have trended down while subscriber penetration and broadening out into new services has grown. What now adds to the fears of price erosion of income/cash flows and profits is that the saturation of subscribers will result in a net collapse of service revenues. However, this fails to account for two sustained factors: 1. New and expanded services continue to emerge. Primary among these are multiple attach rates among existing subscribers and evolution of mobile content, ie. video services and advertising. 2. The operator's unit cost per bit of providing network services is seeing a decline roughly attuned to 'Moore's Law'... or "Moore-Alamouti's Law" of wireless which sees a rough doubling of capacity at the same unit cost about every 18 months. This shifts the scenario from Verizon being the victim of aggressive pricing to being the champion of the game: By having the most efficient set of networks, VZ is able to offer highly competitive coverage, bandwidth, and quality of service at a lower price. What makes VZ the champion rather than the victim is their marketshare and qualitative position allows Verizon to stay competitive while not being forced to use price as the lowest common denominator. In other words, Verizon can shift pricing lower while keeping margins higher than competitors. They are not forced to offer the lowest price. Rather, the perceived value to subscribers includes breath of services, coverage, network quality and the brand image factor... thinking VZ is likely to continue to improve to keep ahead or at least up with competition and with less disruption than has been historically seen among competitors.

    The chance for competitive upset could become a factor in the future: this is an industry in which change is the status quo. VZ could get lazy and fall off of their game. Its been known to happen among the best of companies in maturing industries. However, the boring repetitive nature of VZ's results indicate that while investors should periodically perform a fresh review, they can take actions to invest based on an expectedly boring outcome.

    One way to increase the benefits of the relatively tight range of swings in VZ is to buy at times of market or sector distress , such as now, then sell slightly out of the money covered calls when VZ rises to near cyclic highs.
    Jul 28, 2015. 02:21 PM | 1 Like Like |Link to Comment
  • Sprint's Greatest Fears Realized [View article]
    Your comment is naive fantasy.

    Softbank is not known for throwing money down the drain willy nilly. They obviously expected Sprint to be turned around and got blindsided by the surge in fortunes of closest rival T-mobile. So, the decision to acquire floundering Sprint was flawed. Now that they own it and its continued to underperform, Masa Son stated that he would not invest in a bottomless pit. That SB would invest in Sprint if the prospects showed a favorable ROI. That is pragmatic thinking opposed to retail investors like yourself who think that Softbank will plow money into Sprint ... apparently justified only by the fact that they are already on the hook for 81% of the company at a higher price. Bunkus interuptus.

    The other buffoonery is this oft repeated statement that Sprint's spectrum is worth $70B. I do analysis of value of spectrum as an industry analyst. At the peak of the outlook for 4G when Sprint was the only operator with such wideband spectrum (over 20MHz channel capacity) the 2.5-2.6Ghz band was estimated to be worth between $20 and $30 billion IF Sprint's plans at the time panned out. They did not meet, by a long shot, expectations at the time. The value of Sprints spectrum if calculated on the basis of comparative ROI generated by competitors bands of low and mid band spectrum might, euphemistically, be worth minus $20 billion! While that is in jest, the point is that spectrum is most directly valued based on how it is used to generate revenue and profits. Sprint has failed to make a profit using it, so its value is negative as an ongoing business value.

    The spectrum obviously does have a value because other operators probably can make money using it at some point. Trouble is that a large amount of mid band spectrum has opened up and has gone into use recently with more slated over the next 1-3 years. More is coming available in the 3.5 and 5Ghz bands and 60-120MHz in the 600-700MHz band.

    Sprint has to make a go of what they have. Failing to make the business profitable using the much hyped 2.6GHz band 41 spectrum has led to its value being discounted. Competitors will not pay Sprint $20 billion for the whole of it. Its foolish fantasy for investors to peg their investments on unfulfilled promises and fairy tale valuation of spectrum.
    Jul 11, 2015. 11:05 PM | 9 Likes Like |Link to Comment
  • T-Mobile's On Demand Leasing Program Has Sprint's CEO 'Tired' [View article]
    Wall Street/the market is down on Sprint because their performance is under par with its competitors to the point of threatening its long term structure. Sprint almost certainly won't be allowed to go bankrupt, but as analysts peer into the future they see that something has to give/change: either Sprint makes what now looks like a miraculous recovery or shareholders will see their shares get diluted.

    Take a look at Sprint's performance in meeting its goals for new networks, subscriber and sales growth, etc. Then look at the financials. If you look at Sprint as if it were a company selling corn flakes, ie as if you do not own it, you might decide not to touch it with a ten foot pole.

    Industry analysts learn to look at companies mostly devoid of passion. They try to teach that in the MBA program but it doesn't always stick. Investors like to own things.. like owning a new car, they are vexed with falling into the ownership mode until the thing is falling apart.
    Jul 9, 2015. 09:39 AM | 1 Like Like |Link to Comment
  • T-Mobile's On Demand Leasing Program Has Sprint's CEO 'Tired' [View article]
    Individual experience is, as you all know, anecdotal. The wireless market is not nearly as simple as all that:

    Wireless coverage is no longer viewed as one homogenous attribute that is was: coverage is made up of voice connectivity which itself breaks down into a few components including in-building, rural/outbound, connectivity and reliability of connections (drops). Operators analyse their networks using both sophisticated measurement tools indicative of the Verizon ads depicting specialized equipment vans that tour the country looking for weaknesses, and 'crowd sourced' applications that run on SmartPhones that can perform measurements based on devices used in the field. The latter allows up to hundreds of thousands of points to be measured directly between actual devices and base stations to capture closer to the real world experience of subscribers.

    Figuring out how an operator ranks has become more complex: Wireless used to be all about voice connections with measurement of call setup times, drops, call quality that can be related to signal measurements including latency, jitter, call setup and impacts of various legs in the network. Now it has become multi-dimensional tests and analysis of the results. Voice coverage still ranks at the top of requirements with text messaging coming in second. However, text messages can be cued and transmitted when a good connection is made... a delay or momentary drop is not so upsetting as with voice. With web, video and broadband use gaining in popularity, the coverage measure has shifted to 'broadband-to-coverage'. Sites like RootMetrics must distill their measurements down to a few easily understood metrics such as average bandwidth. However, the user's experience may not be correctly reflected in that smoothing of the data. What is now important is bandwidth-to-coverage which can be summed up as the user experience of bandwidth. Due to the mix of spectrum Sprint has available they rank a distant number 4 behind AT&T, T-Mobile and Verizon in relative order because Sprint tends to have high bandwidth in areas of dense urban deployment and lower bandwidth where the service relies on the broader coverage that narrower band lower frequencies provide. These factors cannot be wished away and will be expensive and time consuming to change.

    However, the network can be made roughly competitive such that perceptions of how well an operator is delivering on user's needs takes over in the picture of how well they rank. The facts are that all operators have migrated to use 4G and B4G, beyond 4G or 5G class networks. All operators are migrating to use multiple-band/multiple... networks and HetNet smallcell+macrocell network architectures. Their efforts differ by vendor, degree, mix of smallcell,Wi-Fi, and macrocell components but the end result is bound by the generation that uses the same basic set of technologies. That puts pressure on operators to differentiate based on perception of performance and image that can vary between the top four roughly based on market position: the dominant top two, VZ and T 'wage war' based on scale of operations and less as a 'price war' or more selective so. S and TMUS must wage war based on being renegades willing to fight for the sake of customers over price and accommodation of device and service offerings.

    The real world operation of networks matters because it closely defines the user's experience where they live, work and travel. Price and 'Un-Carrier' image is more important for 'the young and the restless' and other higher churn segments of the market. Therefore, perception has been shown to have a major influence on subscriber growth and flux. However, even so, it must be backed up by that real world network capability. T-Mobile has gained subs both due to the perception it is pursuing what users want and its investment in spectrum and networks that reasonably have delivered on the promise of better service across the board.

    Sprint lacks both the real world experience that pans out to be a better across the board experience and also a lagging perception that they are chasing rather than leading the way forward in the never ending race to deliver better quality and more and better services.

    I continue to see nothing on the near term horizon that shifts Sprint from a 4th place position in the race to a clear, momentum building 3rd or better position. Sprint has to deliver the broad improvement in performance that overtakes the damaged public perception of coverage and quality.. and do that in a way that gain improvement in overall ROI against the field of competitors. Otherwise, Sprint's network improvements will be, as in the past, for naught - improvements behind that of the field and at a higher per sub net cost that results in losses, rising debt, and decline in long term competitive position.
    Jul 7, 2015. 10:28 AM | Likes Like |Link to Comment
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