alertmeipp Posted October 28, 2011 Share Posted October 28, 2011 Sprint Said Near Deal With Clearwire for New Long-Term Pact http://www.businessweek.com/news/2011-10-27/sprint-said-near-deal-with-clearwire-for-new-long-term-pact.html " Though details are still being negotiated and a final accord isn’t certain, the price Sprint pays for Clearwire to handle its traffic is likely to fall, the people said." Link to comment Share on other sites More sharing options...
Cardboard Posted October 28, 2011 Share Posted October 28, 2011 Oct 7: Hesse, after 2012 we are pretty much done with Clearwire. Oct 26: Hesse, tentative deal with Clearwire to develop compatible LTE technologies. Late Oct 27: Sprint close to a deal with Clearwire to extend contract past 2012. Other than creating huge uncertainty in the marketplace, I don't see what Hesse has achieved that could not have been resolved behind closed doors. Or someone talked to Hesse after Oct 7 and told him that he was on the way out. The Chairman apology following the Oct 7 meeting can't have been a pleasant experience and something that I don't recall seeing. Regarding financing, of course that it won't come from Sprint. They can't even finance themselves! Clearwire executives have repeated many times that they would have the funds by year end and that was before any info on a possible extension with Sprint. This extension would provide the cash flow visibility to those who will finance. This will also mean better terms than what was looked at and we still have the strong possibility of seeing a new partner emerging (Metro PCS, DISH?) that could provide even more business. The "Switzerland of broadband" is becoming more and more a reality. I see them offering the missing wireless capacity to almost every industry participant in the next few years. Cardboard Link to comment Share on other sites More sharing options...
Cardboard Posted October 28, 2011 Share Posted October 28, 2011 So what? Is that how you think as a CEO? Please tell me which firm it is so that I never invest in it! Cardboard Link to comment Share on other sites More sharing options...
brker_guy Posted October 28, 2011 Share Posted October 28, 2011 Sprint and Clearwire is about to enter into a 3-5 years network deal: http://www.bloomberg.com/news/2011-10-27/sprint-said-near-deal-with-clearwire-for-new-3-to-5-year-pact.html?cmpid=yhoo Now, we finally see what kind of poker hand Hesse has been holding. The dude has NOTHING!!! Link to comment Share on other sites More sharing options...
brker_guy Posted October 28, 2011 Share Posted October 28, 2011 Peter, Dan "the hustle" Hesse is not a CEO who looks out for his shareholders in the short run OR the long run. I think he's looking out for #1: HIMSELF! He's looking for that golden parachute in case his decisions turn out to be a flop which they are turning out to be already... Link to comment Share on other sites More sharing options...
Cardboard Posted October 28, 2011 Share Posted October 28, 2011 We are not talking about the short term here, we are talking about the very existence of Sprint as a public company. But, as the guy said during the presentation on October 7, he has never seen a telecom not continuing serving customers into bankruptcy. FCC demands it. So it is no big deal for him. Life goes on for Mr. Hesse and it is just that the people funding/owning the company could change... The executive team was totally unprepared for the presentation on Oct 7 while it was awaited for over 6 months with lots of built up expectations! Questions around the IPhone costs, funding, network integration and strategy with Lightsquared and Clearwire were sure to be asked. They failed miserably. What resulted was a downward spiral in the share price of Sprint and a credit downgrade which will mean trouble getting their financing under reasonable terms. Confidence is everything when you go for financing. People at the banks are human too and they shy away when they see a stock price that is plunging combined with quarterly losses as far as the eye can see and already large leverage. Then you have a credit downgrade. Well done! Dan Hesse has destroyed the opportunity for Sprint to be the undisputed leader in 4G nationwide. He has been more busy bitching about the AT&T and T-Mobile deal instead of going on the offensive, stealing market share and building up a network that the two giants could only dream of. If he had acted normally or like 90% of the analysts and investors out there regarding the 4G strategy, we would be there already, the businesses would be much stronger and both S and CLWR share prices would be much higher. He is better at finding quotes like: "even an idiot could run it" or "I feel like Brad Pitt in Moneyball". On the idiot part, we already see that an idiot could not run Sprint. Cardboard Link to comment Share on other sites More sharing options...
bmichaud Posted October 29, 2011 Author Share Posted October 29, 2011 Hahahahahahahahahahahhahahaahahahhahahah brker_guy will love that. Great post Burke - I'm sure there was NOTHING Hesse could have done to avoid Sprint's stock declining 40pc ytd. Link to comment Share on other sites More sharing options...
Cardboard Posted October 29, 2011 Share Posted October 29, 2011 http://www.nationaljournal.com/tech/small-business-committee-republicans-ask-fcc-to-withhold-lightsquared-approval-20111028 http://www.reuters.com/article/2011/10/28/clearwire-wolff-idUSN1E79R21H20111028?feedType=RSS&feedName=technologySector&rpc=43 Very fluid situation. This board member resignation is no coincidence and something big is about to be announced. Cardboard Link to comment Share on other sites More sharing options...
Cardboard Posted October 29, 2011 Share Posted October 29, 2011 Yes, he has been dealt a bad hand getting in after the merger with Nextel. Everybody has challenges in life and when you get paid the big bucks normally the issues and expectations are bigger. Hesse is a good marketer. A brand guy. I think that is about it. He has done a very good job improving the customer experience of Sprint users and the Unlimited plan is a nice differentiator in the industry. Where he seems poor is on technology and since this industry is no longer the old Ma Bell where they could sit on their old technology for years and just play with pricing and a few upgrades, a CEO needs talent there as well. He also seems poor at strategic alternatives or financial engineering. A couple examples, 1- The wireline business could have been sold. It has been clear for a long time that wireless is the future. So instead of waiting for it to completely runoff and getting next to nothing this could have been a nice fund raiser a few years back. 2- Is there a benefit to keep the "Push to talk" network? A lot of Network Vision is about eliminating the IDen network that supports it to move it to the 3G CDMA to cut costs. Personally, I think that it could be cheaper to hand out a free handset with the Push to Talk app. to all their users and then to shutdown the original service. I would think that many users have done that on their own already since this business is losing customers by the thousand each month. Some subscribers would still likely be lost, but what is the cost vs benefit? I don't think he has ever considered something like that. 3- Hesse does not seem to understand that they own just over 50% of Clearwire. If the company does well, there is 50% of profits and value accretion that comes right back in their pocket. There is no such thing with LightSquared. So, how could you possibly have Clearwire as a 3rd option? The behavior, decision making and negotiating strategy if there was any has been highly questionable to say the least. 4- The 4G LTE proposed plan is inferior to other market participants. How could you possibly introduce something after your competitors that is inferior to them and expect to win in the marketplace? The Network Vision creation is a disaster IMO. It is something that should have been done 3 years ago, but under current conditions it just does not make sense to implement it in such form. It is basically trying to cut costs on a business (IDen, 2G, 3G) that will have mostly disappeared by 2015 and the 4G portion of it is inferior. Spending billions for that seems retarded IMO. Stopping Wimax makes sense IMO and Clearwire has properly reacted and come up with a superb LTE technology at a low cost. Sprint should have embraced that with both hands. So it is very hard for me to criticize Clearwire's management when they have adapted by finding a solution to move to LTE, obtained a better contract with Sprint a few months ago, did not dilute shareholders so far, have kept their spectrum assets that keep on going up in value instead of going through fire sales, are close to sign new partners (Metro PCS) while their majority owner has been a real public pain and will see positive EBITDA ahead of forecast. Cardboard Link to comment Share on other sites More sharing options...
alertmeipp Posted October 30, 2011 Share Posted October 30, 2011 http://www.nationaljournal.com/tech/small-business-committee-republicans-ask-fcc-to-withhold-lightsquared-approval-20111028 http://www.reuters.com/article/2011/10/28/clearwire-wolff-idUSN1E79R21H20111028?feedType=RSS&feedName=technologySector&rpc=43 Very fluid situation. This board member resignation is no coincidence and something big is about to be announced. Cardboard What do you think it's going to be announced? Link to comment Share on other sites More sharing options...
bmichaud Posted November 2, 2011 Author Share Posted November 2, 2011 Update from tonight.... http://www.reuters.com/article/2011/11/02/clearwire-idUSN1E7A11HE20111102?feedType=RSS&feedName=technologySector&rpc=43 No "announcement", gap between CLWR and Sprint in negotiations, and CLWR retracted its projection for EBITDA-positive in Q1 2012. Link to comment Share on other sites More sharing options...
brker_guy Posted November 3, 2011 Share Posted November 3, 2011 Despite Clearwire's comments about network usage, the company said it expects to exceed its previous target of 10 million subscribers by the end of 2011. This would imply that it still expects net additions of more than 460,000 customers in the current quarter as Clearwire ended the quarter with 9.54 million customers. "We're looking at the numbers every day. We see subscribers and we see subscriber additions," Prusch told Reuters. http://www.clear.com/plans http://newswire.telecomramblings.com/2011/11/united-online-and-clearwire-announce-agreement-to-power-netzero-4g-high-speed-mobile-broadband-service-via-clearwire-4g-network/ Link to comment Share on other sites More sharing options...
Cardboard Posted November 3, 2011 Share Posted November 3, 2011 "No "announcement", gap between CLWR and Sprint in negotiations, and CLWR retracted its projection for EBITDA-positive in Q1 2012. " No announcement with Sprint yet is ok. However, I really don't like that they stop predicting being EBITDA positive by Q1. The reason stated is to see how much the IPhone 4 and 4S (which are both 3G) will replace demand for 4G phones at Sprint. According to one analyst, this is an over-reaction. http://blogs.barrons.com/techtraderdaily/2011/11/03/clearwire-iphone-impact-overblown-says-btig/?mod=yahoobarrons All the adds that I have seen on TV by Sprint recently have all been about the new Samsung 4G phones. Having a IPhone 4 myself, I am getting a little tired about the "low" speed to sometimes just download a small article or to refresh an internet page. It is a nice phone, easy to use, practical, but I do feel that Apple is now behind the competition and need to upgrade to 4G asap. Cardboard Link to comment Share on other sites More sharing options...
brker_guy Posted November 3, 2011 Share Posted November 3, 2011 Cardboard, Don't know if you had seen this, but Sprint detailed their Network Vision: Key points covered: * LTE Rollout Phase 1 — the LTE rollout is underway with the Network Vision program, which will touch every cell site over the next 2 years. This phase of the rollout will use the 1900 MHz spectrum and extend to 270 million POPs. * LTE Rollout Phase 2 — expected in Q2 2013 will leverage features of Release 10. This phase of the rollout could also add the 800 MHz spectrum from the iDen network, as well as the 1.6 GHz spectrum from LightSquared. * The Clearwire Partnership — The companies are in tentative agreement that the future is LTE and will work together to make FD-LTE and TD-LTE operate in a seamless network. * Small Cells — the HetNet architecture will be critical because mobile broadband traffic is increasingly an in-door experience. Hotspots can be very effective in addressing the indoor mobile broadband trend. * VoLTE — VoIP over LTE is likely at Sprint in the first half of 2013 to a subset of LTE handsets. There are likely to be multiple ways of supporting voice streams. Link to comment Share on other sites More sharing options...
bmichaud Posted November 4, 2011 Author Share Posted November 4, 2011 As Mrs. Doubtfire says, "Help is on the way, dear!" http://www.bloomberg.com/news/2011-11-04/clearwire-shares-soar-after-sprint-says-it-may-provide-financial-backing.html Link to comment Share on other sites More sharing options...
ubuy2wron Posted November 4, 2011 Share Posted November 4, 2011 Nobody has said a thing but I predict the hatchet has been buried. I have had an interest because I have been buying shares of DWI-T which has been a supplier to CLWR I was able to buy some shares pretty cheap a month ago only a little over cash per share tho they are burning cash because of a lack of meaningfull revenues. Today they announced a purchase of a Nokia microwave sub and the stock is up sharply. I think the deal is done. I think CLWR -Sprint will be looking for heavy vendor financing to complete their buildout. But I think its now a done deal. Link to comment Share on other sites More sharing options...
Cardboard Posted November 4, 2011 Share Posted November 4, 2011 Sprint is a poorly managed company. Everything they do is always: "we may do this", "we might do that". What is the purpose of that? It was the same with LightSquared where Falcone was coming out and announcing a deal and Sprint took I don't recall how long, but weeks for sure, to announce the deal. Now, we may have a technology deal on LTE with Clearwire, we may have a contract extension, we may fund them... Just come out with a straight forward announcement when you have something official to say! If they stopped the rumour mill and just announced real business and results then maybe that they would have an easier time obtaining financing and getting respect out there. Doing what they are doing simply destroy their credibility. Cardboard Link to comment Share on other sites More sharing options...
ubuy2wron Posted November 4, 2011 Share Posted November 4, 2011 Sprint is a poorly managed company. Everything they do is always: "we may do this", "we might do that". What is the purpose of that? It was the same with LightSquared where Falcone was coming out and announcing a deal and Sprint took I don't recall how long, but weeks for sure, to announce the deal. Now, we may have a technology deal on LTE with Clearwire, we may have a contract extension, we may fund them... Just come out with a straight forward announcement when you have something official to say! If they stopped the rumour mill and just announced real business and results then maybe that they would have an easier time obtaining financing and getting respect out there. Doing what they are doing simply destroy their credibility. Cardboard I can see how speculators focused on the next week or month might be upset with the way S communicates via CNBC, et al. who cares what happens in a matter of weeks. who cares if the share price goes up and down in the short term. if once is truly an investor this should trouble you very little. what matters is the capital allocation, and getting right assets in place at the right price. not how they communicate with wall street. All true ,but Hess? is still an idiot and if there is a fool in this saga its him. Light speed has appeared to be a hail mary pass kind of investment from the start and tho I am no foot ball expert hail mary passes only work if there is surprise involved Light speed was dead as soon as the T Mobil deal was announced which should have been a S_CLWR_T mobil merger in my opinion. Link to comment Share on other sites More sharing options...
bmichaud Posted November 4, 2011 Author Share Posted November 4, 2011 Can we at least go back to calling it Light "squared"? Link to comment Share on other sites More sharing options...
ubuy2wron Posted November 4, 2011 Share Posted November 4, 2011 Can we at least go back to calling it Light "squared"? Ya youre right ,sorry but I am a little light headed after all of this volatility. I just read my last post and it has soo many spelling mistakes and syntax errors I am just going to delete it. Link to comment Share on other sites More sharing options...
bmichaud Posted November 5, 2011 Author Share Posted November 5, 2011 Sprint just raised $4B and Clearwire has ~1B shares out, which means Sprint could buy in the ~500MM it doesn't own for $4 p/s and still have $2B left for its network, not including any vendor financing. I believe they have a $3B financing gap? They could even offer $6 p/s and still have $1B left for its own network, not including vendor financing. Perhaps Sprint and the Cables that already have a stake will roll it up together. I'm just throwing it out there given that we now have some concrete numbers to work with out of Sprint - however, I truly wonder if this is why Clearwire HAS NOT YET RAISED FINANCING (I.e. It is waiting for Sprint). This is the most baffling part of the situation - supposedly there are partners chomping at the bit to work with Clearwire yet nobody will write a check. Clearwire keeps saying it wants to raise capital, but the longer it waits, THE MORE EXPENSIVE IT GETS - I don't care how much value the spectrum is accruing over time, the bottom line is the market perceives CLWR as a negative credit, thus the more expensive and dilutive capital raising becomes. Ridiculous. Link to comment Share on other sites More sharing options...
alertmeipp Posted November 5, 2011 Share Posted November 5, 2011 Sprint just raised $4B and Clearwire has ~1B shares out, which means Sprint could buy in the ~500MM it doesn't own for $4 p/s and still have $2B left for its network, not including any vendor financing. I believe they have a $3B financing gap? They could even offer $6 p/s and still have $1B left for its own network, not including vendor financing. Perhaps Sprint and the Cables that already have a stake will roll it up together. I'm just throwing it out there given that we now have some concrete numbers to work with out of Sprint - however, I truly wonder if this is why Clearwire HAS NOT YET RAISED FINANCING (I.e. It is waiting for Sprint). This is the most baffling part of the situation - supposedly there are partners chomping at the bit to work with Clearwire yet nobody will write a check. Clearwire keeps saying it wants to raise capital, but the longer it waits, THE MORE EXPENSIVE IT GETS - I don't care how much value the spectrum is accruing over time, the bottom line is the market perceives CLWR as a negative credit, thus the more expensive and dilutive capital raising becomes. Ridiculous. That could happen. But imo, sprint doesn't need to bid against itself and buy clwr. it already is the controlling shareholder. that would be wasted capital. companies that are starving for capital don't spend it on buying shares in companies that consume cash. the cash sprint raised is to build out it's network assets so it can literally stay in business. I still believe clwr is part of that strategy but now is not the time to risk $2b (if it could even be done at that price) when it's own business needs all of that capital to compete as the world shifts to LTE. This entire thing is a puzzle so anything could happen. My guess is that clwr and sprint come to a longer term deal where Sprint pays in installments over time. They will prop up clwr enough so that somebody else will feel safe enough to invest. One way to do it is to buy out with shares (say 1:1 ratio). That way - they effectively de-leverage and from shareholders' point of view - it's less dilut-ive (relatively). Link to comment Share on other sites More sharing options...
Cardboard Posted November 5, 2011 Share Posted November 5, 2011 IMO, Sprint will never buy out the rest of Clearwire. Anyway, that is if they don't totally reverse course. If you recall, they have done everything possible to ensure that the Clearwire debt is non-recourse to Sprint (lowered voting interest to 49% vs their ownership at 51%). Clearwire is effectively a subsidiary of Sprint, but since Sprint's balance sheet is under such stress they want to ensure that the debt is not carried on theirs. So Clearwire is carried as an equity interest. Any form of buyout weather debt or share exchange means that Clearwire's debt would now show up on Sprint's balance sheet. Now, I think that this whole thing is a little stupid since if the strategy had been properly articulated by Hesse regarding 4G, the investing community and ratings agencies would have supported a buyout of Clearwire or at least a large investment into it even if it had increased the total debt amount carried by Sprint. Now, what we have instead are two companies begging for money, both spending money for the same thing and with Sprint showing deficiency in spectrum holdings. However, this may be a very long term negotiating and ultra smart strategy by Hesse, as speculated by Peter Burke, to get Clearwire for pennies on the dollar, however one fact remains. When a CEO is not clear with investors and seem to pursue a bizarre strategy there is a real cost for its shareholders and it shows up in its cost of capital. I believe that the terms of the $4 billion in debt raised yesterday show clear distress. Of course, this higher cost may be nothing compared to the savings made in a potential low cost deal with Clearwire. The problem is that barbarians are now at the gates (Dish, cable cos, Metro PCS and others that we don't know yet) and may make Hesse look really stupid in the end. I would not even try to assign a cost to sales and earnings for pursuing such weird negotiating tactics by missing being first nationwide in the U.S. with an ultra fast and ultra high capacity 4G LTE network. Verizon will be first once again. Cardboard Link to comment Share on other sites More sharing options...
bmichaud Posted November 8, 2011 Author Share Posted November 8, 2011 I'm a big fan of reading as much as possible anything that Charlie Ergen has to say in Dish's CCs. He's extremely bright, forward thinking and insightful with regards to his industry and where it is going. I highly recommend the attached CC. As has been discussed on here before, I just cannot imagine Ergen has not at a minimum considered sniffing around CLWR debt at under 30-cents on the dollar. He likes to shake things up, and he is very focused on diversifying Dish away from fixed video - why not kick-start a mini-consolidation within the lower end of the telco market via Spectrum Co./Sprint/Clwr/Dish? Interesting stuff. DISH_2011_Q3_CC.pdf Link to comment Share on other sites More sharing options...
bmichaud Posted November 8, 2011 Author Share Posted November 8, 2011 I'm a big fan of reading as much as possible anything that Charlie Ergen has to say in Dish's CCs. He's extremely bright, forward thinking and insightful with regards to his industry and where it is going. I highly recommend the attached CC. As has been discussed on here before, I just cannot imagine Ergen has not at a minimum considered sniffing around CLWR debt at under 30-cents on the dollar. He likes to shake things up, and he is very focused on diversifying Dish away from fixed video - why not kick-start a mini-consolidation within the lower end of the telco market via Spectrum Co./Sprint/Clwr/Dish? Interesting stuff. where is the quote you are seeing that they are below 30c on the dollar? Look at a Bloomberg graph of the debt... Link to comment Share on other sites More sharing options...
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