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Will SoftBank Deal Save Sprint Unlimited Data?
Maybe, Maybe Not...
by Karl Bode 09:28AM Tuesday Oct 16 2012
The Washington Post notes the obvious, observing that the large cash infusion courtesy of SoftBank's acquisition of Sprint will not only help fund Sprint's LTE services, it could help save Sprint's unlimited data offerings. Sprint's "Network Vision" overhaul is expected to cost at least $5 billion over the next few years, and Sprint doled out a large $15 billion payment to net the iPhone. As a result, Sprint's unlimited data plan has been on thin ice for some time, the company's LTE build out and heavy iPhone subsidy payout weighing heavily on company earnings. Consumer Advocates tell the Post that Softbank could save the day:
quote:
Click for full size
“Having competitors to Verizon and AT&T has been critical because they provide more options and put pressure on the big carriers,” said Matt Wood, policy director at Free Press, a media advocacy group. Consumers paid an average of $86 on monthly wireless bills in 2011, up 25 percent from four years earlier, he said.
Maybe. In order to make greater strides in the U.S. market, Deutsche Telekom-owned T-Mobile recently reversed field and started offering unlimited data again -- so Sprint is no longer alone on that front. However, as Sprint has grown they've shown a tendency to act more and more like their bigger competitors, and if Dan Hesse leaves post deal there's certainly nothing that says unlimited data would be here to stay.

SoftBank may want to push unlimited to differentiate Sprint from its larger competitors, or, it may see that the trend started by the duopoly leadership is one worth following in order to maximize revenues and pay for LTE. Sprint offers unlimited to compensate for weaker coverage; should the latter problem be remedied, there's no guarantee that unlimited couldn't be killed to improve profits. While the Japanese and U.S. markets are clearly different, SoftBank does offer unlimited data at speeds up to 76 Mbps downstream for $63 a month.

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88615298
Premium
join:2004-07-28
West Tenness

might stay but cost more

Considering that $0 of that $20 bil is going towards infrastructure I can see where Sprint keeps unlimited but as a premium service and have capped tiers like at&t and Verizon.
sandman_1

join:2011-04-23
11111

Re: might stay but cost more

You really think that Softbank isn't going to put anything into the infrastructure? I beg to differ especially if spending 20 billion +.

88615298
Premium
join:2004-07-28
West Tenness

Re: might stay but cost more

said by sandman_1:

You really think that Softbank isn't going to put anything into the infrastructure? I beg to differ especially if spending 20 billion +.

They already said $12 bil is going straight to Sprint shareholders and the other $8 bil is going to balance the books.
openbox9
Premium
join:2004-01-26
Germany
kudos:2

Re: might stay but cost more

It's a tender offer. How else do you propose a company buy another?

88615298
Premium
join:2004-07-28
West Tenness

Re: might stay but cost more

said by openbox9:

It's a tender offer. How else do you propose a company buy another?

Point is the article states Sprint is going to spend $5 bil on LTE expansion. So if none of this money is going to that were is this money going to come from?
openbox9
Premium
join:2004-01-26
Germany
kudos:2

Re: might stay but cost more

The same place it was coming from before this deal. Also, as you mention, $8B is going to fix Sprint's messy balance sheet, which makes future debt discussions much more tenable.
said by Forbes.com :

The $8 billion cash infusion provides Sprint with a significant cushion as it undertakes its expensive 4G LTE network rollout and network modernization project. It will also reduce the company’s net debt (long-term debt, excluding operating leases, minus cash) to $6.5 billion from $14.5 billion. As a result, its net leverage – the ratio of net debt to EBITDA – would decline from about 3x to 1.3x. This could lead to credit rating upgrades, and as a result lower borrowing costs for the company.


88615298
Premium
join:2004-07-28
West Tenness

Re: might stay but cost more

said by openbox9:

The same place it was coming from before this deal.

before this deal they were in debt up to their eyeballs.
openbox9
Premium
join:2004-01-26
Germany
kudos:2

Re: might stay but cost more

And the $8B cash infusion alleviates that.
hottboiinnc
ME

join:2003-10-15
Cleveland, OH
And it most likely will. sprint already charges you extra for 4g services. They've been doing that since WiMax. Yet 95% of their customers could NEVER get it. Yet people are still paying for that and still no LTE or WiMax phones.

Sprint is totally banking that money and I could see them raising that or having a price plan of : $XX for LTE $X for WiMax and $X for 3g/2g until the networks are one.

SteelerRaw

@timet.com

Re: might stay but cost more

said by hottboiinnc:

And it most likely will. sprint already charges you extra for 4g services. They've been doing that since WiMax. Yet 95% of their customers could NEVER get it. Yet people are still paying for that and still no LTE or WiMax phones.

Incorrect. Every smartphone from Sprint has the $10 premium data fee added on even if it is a 3G-only phone.

pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD

It Has To

If Sprint drops unlimited data then they have no competitive advantage to AT&T or Verizon, which both easily smoke Sprint in the native coverage department.
--
Romney/Ryan 2012 - Put a couple of mature adults in charge.

88615298
Premium
join:2004-07-28
West Tenness

Re: It Has To

Areas that have sprint most likely have T-Mobile which offer unlimited and has no contracts. No to mention discount no contract carriers like Straight Talk, net 10, Cricket etc etc.

io chico
Premium
join:2003-12-30
Chico, CA

Give me Unlimited!

Agreed. Unlimited data is the only reason I stay with Sprint. I have a choice of two carriers where I live and AT&T is 3x faster, but Sprint is unlimited. I don't care about speed if I can't use my phone past the 3rd week of the month.

88615298
Premium
join:2004-07-28
West Tenness

Re: Give me Unlimited!

said by io chico:

Agreed. Unlimited data is the only reason I stay with Sprint. I have a choice of two carriers where I live and AT&T is 3x faster, but Sprint is unlimited. I don't care about speed if I can't use my phone past the 3rd week of the month.

And even if Sprint offered "unlimited" 4G in my area I wouldn't go with the because I know "unlimited" is complete bullshit. I'd rather a company be honest form the start. Not tell me unlimited but really it's 2 GB then throttled to dail-up speed afterwards.
Chuck_IV

join:2003-11-18
Connecticut

Re: Give me Unlimited!

I've gone well over 2Gig many times and never ever been throttled as a normal user, as long as I am on a Sprint network. I can't speak for the tethring based cards tho

MovieLover76

join:2009-09-11
kudos:1
Sprint doesn't throttle, your thinking of t-mobile's old unlimited plans, with X mb up to 4G speeds, which they still have in addition to the new truly unlimited and non-throttled 4G plan.

n2jtx

join:2001-01-13
Glen Head, NY

Re: Give me Unlimited!

said by MovieLover76:

Sprint doesn't throttle

They don't have to purposely do it. With the speeds I am getting in the neighborhood of around 200K/sec it might as well be throttled officially.
--
I support the right to keep and arm bears.

Jerm

join:2000-04-10
Richland, WA
kudos:2
said by 88615298:

And even if Sprint ... I know "unlimited" is complete bullshit...Not tell me unlimited but really it's 2 GB then throttled to dail-up speed afterwards.

BF69 you got ATT confused with Sprint.

»www.youtube.com/watch?v=XW5aEQzTcW0


The only sense in which Sprint does "throttle" per say is based on on current tower useage like any other carrier. Once a tower gets "full" they allow everyone to get an equal slice of the pie. But this metric doesn't take into past data usage.

This is very different from the straight 128kbps cap ATT throws on their "unlimited" users that use too much data.
xenophon

join:2007-09-17

Re: It Has To

Given that it's Sprint's only leverage and Softbank also offers unlimited, not sure why this would even be questioned. This is FUD.

88615298
Premium
join:2004-07-28
West Tenness

Re: It Has To

That doesn't say much for Sprint future if their ONLY leverage is unlimited. Which isn't actually leverage if there are many other option that offer unlimited. Options that offer no contract and that are cheaper.

skeechan
Ai Otsukaholic
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Reviews:
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Exactly and as Sprint increases their coverage, so goes their marketshare and ARPU. The only thing really holding back Sprint's growth is their coverage. SoftBank can fix that. SoftBank also has churn in line with Verizon and AT&T at around 1% so as Sprint's "problems" are fixed, they'll be able keep the customers they get.

The market in Japan is completely saturated with 127M subscribers out of a population of about 127M. Growth between all of the carriers in Japan was only 0.6%. They're done.

This is a logical move for SoftBank who is having a lot of trouble stealing customers from NTT and au/KDDI. With improved Sprint coverage, swiping AT&T and Verizon customers wouldn't be nearly as difficult, especially if they keep their aggressive data plans or adapt the sliding model for data usage they have in Japan.

88615298
Premium
join:2004-07-28
West Tenness

Re: It Has To

said by skeechan:

Exactly and as Sprint increases their coverage, so goes their marketshare and ARPU. The only thing really holding back Sprint's growth is their coverage. SoftBank can fix that. SoftBank also has churn in line with Verizon and AT&T at around 1% so as Sprint's "problems" are fixed, they'll be able keep the customers they get.

The market in Japan is completely saturated with 127M subscribers out of a population of about 127M. Growth between all of the carriers in Japan was only 0.6%. They're done.

This is a logical move for SoftBank who is having a lot of trouble stealing customers from NTT and au/KDDI. With improved Sprint coverage, swiping AT&T and Verizon customers wouldn't be nearly as difficult, especially if they keep their aggressive data plans or adapt the sliding model for data usage they have in Japan.

Sprint plans on LTE is cover CURRENT markets. Nothing has ever been stated on moving into new markets

Black_Mage
iMage
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join:2012-09-12
USA
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Reviews:
·Windstream

1 recommendation

Unlimited data is the main reason I went back to Sprint. So far I am mildly regretting that decision though. Their customer service app (which is nothing more than links to their website) sucks compared to the app ATT had. Their 3G service also sucks compared to ATT's 3G service.

MovieLover76

join:2009-09-11
kudos:1

Re: It Has To

I gave up on unlimited when Verizon wanted me to pay full price for a new phone to keep unlimted, so I bought a gsm nexus at full price and switched to straight talk.

I can deal with a soft 2GB cap for $45, but not for almost $100.

Sprint's unlimited 3G is worthless imho, sure it's unlimited but using Sprint's 3G is like being constantly throttled on any other carrier, so what's the point?

skeechan
Ai Otsukaholic
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Reviews:
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SoftBank offers unlimited service in .jp

But even that is completely irrelevant. SoftBank isn't dropping billions to lose a crapload of customers. The .jp market for mobile is saturated, not much growth left there but in the US there still is room to grow.

I don't see SoftBank making changes that would result in fewer customers. It is MUCH easier to keep existing customers than it is to replace them and that is what they would need to do if they dumped unlimited.

88615298
Premium
join:2004-07-28
West Tenness

Re: SoftBank offers unlimited service in .jp

said by skeechan:

But even that is completely irrelevant. SoftBank isn't dropping billions to lose a crapload of customers. The .jp market for mobile is saturated, not much growth left there but in the US there still is room to grow.

I don't see SoftBank making changes that would result in fewer customers. It is MUCH easier to keep existing customers than it is to replace them and that is what they would need to do if they dumped unlimited.

You miss the point. The low margin bargain hunters that also care about unlimited already have cheaper options( with no contracts by the way )in Sprint areas. I'm not sure how that's a plan for growth, fighting over crumbs with several other bargain companies.
hottboiinnc
ME

join:2003-10-15
Cleveland, OH

Re: SoftBank offers unlimited service in .jp

Especially when you have to fight your own MVNOs for customers and companies like PagePlus you won't beat out. Unlimited talk and tex for $30 per month. NOT going to beat that. You want data its $45. And it uses the VZW network.

Sprint has to also compete with TracFone's tons of companies that use their network and everyone elses. And then you have the Kroger Family of Company that has their own MVNO on Sprint who actually will give you free minutes and data for shopping at their stores.

skeechan
Ai Otsukaholic
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Re: SoftBank offers unlimited service in .jp

You are assuming SoftBank will renew those reseller agreements or raise wholesale rates.
tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·ooma
·Optimum Online
·Verizon FiOS

fragmented markets & future regulation

millions of people have switched from wired networks to wireless on the hopes of an unlimited tier remaining cost effective... once that's out of the picture, many of these consumers will primarily only want to buy talk & text plans.. if sprint kills unlimited, then there is zero incentive for any other company / mvno to offer it..

the wildcard is will millions of consumers be pissed off enough to throw down the anti-trust gauntlet of regulatory reform?

these companies are hell-bent on spending billions of dollars to upgrade a network as a usage bases data system.. but IMO consumers won't come at super high prices.. they'll be forced by consumer attrition to lower the prices-- or let the billions of an oversupply in data wither on the vine unused. add to this the 6 strikes plan of anti-piracy censorship, it should make for some fun downturn in the wireless industry...
openbox9
Premium
join:2004-01-26
Germany
kudos:2

Re: fragmented markets & future regulation

Rates have been rising for a while now along with the addition of subscribers. The carriers will find the sweet spot of pricing versus customer defections. Don't worry about the carriers
PastTense

join:2011-07-06
united state
said by tmc8080:

millions of people have switched from wired networks to wireless on the hopes of an unlimited tier remaining cost effective... once that's out of the picture, many of these consumers will primarily only want to buy talk & text plans

No. People are overwhelmingly moving to smartphones. And for this they need 1Gb to 2GB of data per month--they are not going to talk & text plans.
hottboiinnc
ME

join:2003-10-15
Cleveland, OH

Re: fragmented markets & future regulation

Not totally true. Studies have been done where most people use LESS than 1 and 2gigs per month. Karl even blogged about it a few weeks ago.
tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·ooma
·Optimum Online
·Verizon FiOS
said by PastTense:

said by tmc8080:

millions of people have switched from wired networks to wireless on the hopes of an unlimited tier remaining cost effective... once that's out of the picture, many of these consumers will primarily only want to buy talk & text plans

No. People are overwhelmingly moving to smartphones. And for this they need 1Gb to 2GB of data per month--they are not going to talk & text plans.

The average consumer WOULD easily consume 1-2gb of data sitting at a WIFI hotspot for a couple of hours just web browsing and streaming video/multimedia content everyday vs prorated over 30. The fact that they don't only proves that smarphone plans by the big carriers are overpriced. Smart phones have full capability to utilize data features over wifi, except most, if not ALL carriers won't let you subscribe to just unlimited talk/text plans w/ smart phones. GIVE CONSUMERS THAT CHOICE AND SEE WHAT HAPPENS! Only very recently has TRACFONE got a handset that let's you have the wifi feature-- but it's not a smartphone (aka android, bb, win-ph, or i-phone).
openbox9
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Germany
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Unlimited?

Click for full size
said by [userKarl Bode :

]While the Japanese and U.S. markets are clearly different, SoftBank does offer unlimited data at speeds up to 76 Mbps downstream for $63 a month.

Unlimited maybe, but what about throttled? And the coverage? As a current Softbank customer, I'll suggest that you not get too excited.

jseymour

join:2009-12-11
Waterford, MI

Capped vs. Unlimited & Cost

I don't have a problem with caps, per se. What I do have is a problem with a carrier charging 25% more and capping, as Verizon has done. (I let my business rep. at work know that, too.) Even then I might not have too big a problem with it if the caps were reasonable. A 2GB cap, tho most probably won't hit it, does not strike me as "reasonable."

I'm currently with Sprint on a non-data plan. If some day I ever do go "smart"phone, maybe I'll stay with Sprint... Softbank... if they get their coverage act together and they're either uncapped or have what I regard as a "reasonable" cap.

Jim