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T-mobile is buying Suncom for $2.4B with the assumption of debt

nextel18

Sep 17, 2007, 6:00 AM
Just wanted to note that T-mobile USA is purchasing this company for the amount I mentioned. $1.6B for outstanding shares and $.8B of debt. To a total of $2.4B. There will be synergies of $1b so that will basically mean that the purchase was $1.4B. moreover, the purchase allows for more capacity onto its network by up to 20 million customers. makes each subscriber that Sun has, which is 1.1 million, on the $1.4B net purchase price, for $1,272 per subscriber, which is cheap. Without the synergies in place it would cost $2,181 per subscriber, which is also a pretty cheap valuation.
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wombough

Sep 17, 2007, 6:33 AM
As I stated in my post on the news area. I thought it would of happened shortly after cingular bought att and left suncom on its own. But it took a little while. Also its a big win for tmobile as they have 0 coverage in NC and they only cover the extreme south east of SC of what they picked up with the buying of powertel.

It would have been a better deal if suncom didn't sell their towers to another company. But that is minimal.
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nextel18

Sep 17, 2007, 7:14 AM
Yea but $1.4B is a lot of money just for those areas, but the spectrum gives them a lot of room to acquire more.
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wombough

Sep 17, 2007, 7:21 AM
how much would it cost them to build out into 2 hole states?
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ant1171984

Sep 17, 2007, 7:42 AM
That is a very good question. I am just happy at this announcement because I live in NC, and it's practically the only place that does not have T-Mobile. I'm not really a big fan of SunCom and At&t (which is who I have) does not offer voice or data plans anywhere near the bargain that t-mobile offers. All I can say is its about time, and it will be much welocomed in NC, as we will have a new choice in wireless.
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wombough

Sep 17, 2007, 7:46 AM
SC as well. They only have about 30 square miles of SC. Consist of the area due north of savananah GA. Which is Beaufort SC. And doesn't even extend to charleston.
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nextel18

Sep 17, 2007, 7:45 AM
I am not denying that buying this company, SunCom, would be great for T-mobile, but SunCom hasn’t been doing that well and has extensive debt load. Their financial and operational outcomes, as of late, have been good but a while it hasn’t been at all. The assets of the company is what T-mobile was looking at and with the valuations makes it more attractive especially gaining spectrum, but I think they should have looked at a roaming agreement. They possibly could have done a roaming deal, which is usually cheaper than the buyout. I would have pursued that roaming deal possibility and then if the economics doesn’t work, let’s say over a few years, and then buy them out especially since roaming deals are a lot chea...
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wombough

Sep 17, 2007, 7:47 AM
they have a roaming deal with them already. I guess it wasn't good enough or they wanted to add more subscribers which they will. More people will sign with Tmobile in those two states then with suncom.
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nextel18

Sep 17, 2007, 8:03 AM
Well, what I would have done was to wait to see how Suncom will perform operationally and financially. Now, if the deal goes through, they have to incur those deficits as well as expanding the network to 3G, which costs money. To gain access to a potential 20 million is very key but I think those synergies of $1b is actually too much. Of course, they won’t have to spend any money in roaming, but they would have to expand its HSPA network there. I would have just done things differently. I am trying to read the past performances of Suncom to tell you some of the aspects but their own capital expenditures aren’t that large. Earlier they paid $113m for 20 licenses the cover over 7.4 million people, but some are in NC, SC, and VA. ...
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wombough

Sep 17, 2007, 8:10 AM
I really don't think Tmobile's parant company cared aobut anything but getting that area. They have been trying to get spectrum in those states for a long time now. And I think they were jsut like whatever. They have the money as we all know. So I think in the long run they thought it was the best for them.
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nextel18

Sep 17, 2007, 8:19 AM
For just the spectrum and infrastructure; 100% agree with the purchase, but they basically need to get rid of Suncom’s operational and financial situation. I actually didn’t think, given T-mobile’s class, would purchase Suncom because of their lacking in it. Moreover, T-mobile is actually growing, while Suncom isn’t.
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wombough

Sep 17, 2007, 8:24 AM
true but I bet they disband suncom and quickly. All they want it the spectrum and as they did with powertel got rid of ever aspect of the company. Suncom is losign money everywere and tmobile will put there company infastructer and ideals in place. Bad for suncom employees well uper managment and mid management because they will likely be out!
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nextel18

Sep 17, 2007, 8:29 AM
Exactly. I think that has to be their plan because there is no need to keep Suncom’s horrible operational and financial situation. That is one of the reasons why I think they could have done better on their own especially if they might not even spend $1.4B (the inclusive of synergies which I think are overstated) at least T-mobile would have done things better. Now they have to spend a lot of money on upgrading Suncom’s network.
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nextel18

Sep 17, 2007, 8:16 AM
Full year 2006; they spent $68m on capex
Full year 2005; they spent $138m on capex

This is actually a good article too; SUNCOM TO INVEST MORE THAN $100 MILLION IN NETWORK ENHANCEMENTS IN THE CAROLINAS” The expansion includes the addition of 42 new cell sites and is part of SunCom's $100 million overall network enhancement project in the Carolinas.

Another good article; “TRITON PCS ANNOUNCES AGREEMENT TO ACQUIRE URBAN COMM – NORTH CAROLINA” “Triton PCS will acquire the outstanding stock of Urban, whose assets include FCC wireless licenses in 20 Basic Trading Areas (“BTAs”) for $113.0 million in cash.”

“CINGULAR AND TRITON PCS COMPLETE TRANSACTION TO EXCHANGE PROPERTIES IN NORTH ...
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nextel18

Sep 17, 2007, 8:23 AM
Also about Cingular's expansion: Cingular to invest $115M in N.C. network. "The company will add more than 230 cell sites"
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wombough

Sep 18, 2007, 9:53 AM
cingular has no choice. att wireless relayed on suncom. They were as we say one. Suncom was a part of the att wireless network. But when cingular bought them they went on their own through a deal worked out with them.
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nextel18

Sep 18, 2007, 10:02 AM
I understand. I just wanted to show how much it cost them to building the network in a per tower basis. So it wouldn’t be very expensive to get into that market especially if they have spectrum.
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wombough

Sep 18, 2007, 10:05 AM
oh ok. I see that now. But it cost more then that to build one form the ground up. All that money was used for was to enhance what was already there. If you want a good cost see if you can find how much verizon paid to build in NC as they started from scratch just last year!
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nextel18

Sep 18, 2007, 10:35 AM
I don’t remember if it was actually to enhance it or where they actually just starting there so you do have a point, but it won’t be that much especially given Cingular’s per tower build of about $750k, which is average per tower. More importantly, the costs to get spectrum in that area isn’t also that expensive given with the purchases of Suncom, and others. It might cost on average of $1.5-$3/MHz pop also depending on circumstances. Obviously if they build the towers they could always re-sell them and then pay rent on them, as many companies today are doing and the point that you mentioned Suncom sold their towers and are renting them. so given the fact that all of those circumstances I think it is feasible to d...
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wombough

Sep 18, 2007, 10:41 AM
good info. Verizon had to fix its mess in NC and they are getting good there. But it does sound high.
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nextel18

Sep 18, 2007, 10:47 AM
No problem. You know me and how I like to discuss matters. I love to provide excess data and information so at least many people can actually give a rational thought instead of saying something very bogus. Like when you showed me data and information it is very helpful. I think these forums need to have more people like that in order to at least have civil dialogues. With facts you can’t dispute it and that is why you and others (myself included) use it to their advantage.

Yea, Verizon likes to cut checks without really thinking of what they are doing while companies like T-mobile and others need to think closely and careful of how they are spending dollars. Verizon’s MHz per pop is very high while T-mobile’s is very...
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wombough

Sep 18, 2007, 10:54 AM
yeah I love discussing things and with you its always civil and not just BS. I get bored over here so it helps past the time.

PS. Have you ever want to alltel's mancave website. While I am not saying its all facts it is quite amusing. I just watched sprint make fun of verizons commercials.
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nextel18

Sep 18, 2007, 11:00 AM
I haven’t went to their website, but have seen their advertising on YouTube and other marketing avenues/channels. Those commercials are funny. Provide me the URL please. If you can’t do it on here for any reason you can always PM me.
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wombough

Sep 18, 2007, 11:02 AM
http://www.officialmancave.com/ »

It requires you to do some work. Interactive. But good if your bored!
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nextel18

Sep 18, 2007, 11:15 AM
Thanks. So far it looks cool. I am not bored often so I might not be looking at it a lot.
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wombough

Sep 18, 2007, 11:17 AM
its good for a laugh too!
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nextel18

Sep 19, 2007, 8:39 AM
Indeed!
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katrina

Sep 17, 2007, 5:16 PM
BTW, SunCom never did aquire Urban Comm, that deal fell through
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nextel18

Sep 18, 2007, 9:09 AM
Ok. I was just pointing out the costs to get there. Also provided information with Cingular and Verizon’s entry.
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katrina

Sep 19, 2007, 12:19 PM
Yep I know, I was just providing further info :-)
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nextel18

Sep 19, 2007, 12:27 PM
Always good!
Cool
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