Why T-Mobile? Why?

Sprint is sitting on $37 Billion of debt!

T-Mobile is bogged down with $26 Billion in debt.

This deal to Merge with Sprint is all stock deal valued at approximately $59 billion – with Pro Forma 2018E Service Revenue of $53-57 billion, but combined debt of $63B. And then they are going to spend $40B to roll out 5G to rural markets??? FYI… AT&T’s total CAPEX spend is $25B and VZ is at $17B.

“The New T-Mobile plans to invest up to $40 billion in its new network and business in the first three years alone, a massive capital outlay that will fuel job growth at the new company and across related sectors. This is 46% more than T-Mobile and Sprint spent combined in the past three years.”

Per Bloomberg, “Between overhead redundancies, overlapping store locations and duplicative cell towers, the companies are estimating more than $6 billion in annual cost savings.” That is IF they can get out of leases – and after they fire a ton of people, so all those employee projections don’t include the synergy layoffs. It’s all crap. Of all the mergers in telecom, this one looks more like Nextel-Sprint than MetroPCS-T-Mobile, which was tiny in comparison and didn’t leave the resulting firm with too much debt to service.

THE FORWARD THINKING (I use that term lightly)

“Wireless, broadband, and video markets are rapidly converging. AT&T is now the largest TV provider in the country. Comcast added more wireless phone customers last year than AT&T and Verizon combined, and Charter is launching wireless this year. And, more than 1 in 10 Americans (12%) use wireless as their only Internet or broadband connection.” In other words, cable is going to kick are asses, so we decided to merge. Bigger is Better to Wall Street.

“Broadband. 51% of Americans have only one high-speed broadband option – no choice at all! The combined company will create a viable alternative for millions by enabling mobile connections that rival broadband, driving prices lower and improving service.”

We will wave the flag that we will be a viable replacement to wireline broadband to hide the fact that the mobile pie isn’t growing, that is just a game of take away — and the cost of acquiring a customer is rapidly rising**.

This is blatant BS: “This isn’t a case of going from 4 to 3 wireless companies – there are now at least 7 or 8 big competitors in this converging market. And in 5G, we’ll go from 0 to 1. Only the New T-Mobile will have the capacity to deliver real, nationwide 5G,” added Legere. Seriously, there are only 4 national cellcos. Everyone else buys from those 4.

I am mainly against big mergers. They never work out. It is all for Wall Street.

The big winners are AT&T and VZW (and Comcast) who will crush them while they are working through legal/regulatory and the mess of integration.

** NOTE: BTW, the UCaaS/Hosted VoIP space is in a similar boat with the rising cost fo customer acquisition.

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