Sprint Nextel sells off "nearly all" of its towers to TowerCo for $670 million
By Darren Murph 
posted July 24th 2008 11:43PM
posted July 24th 2008 11:43PM
[Via InformationWeek]
posted July 24th 2008 11:43PM
A look back on popular stories from today in a specific year.
Now that we've thrown 'em off the trail, use the form below to get in touch with the people at Engadget. Please fill in all of the required fields because they're required.
Towers are already owned by private firms.
i think his main point is being missed. he would like to see mast consolidation. some areas do have requirements for that.
if you think there is overkill outside your window, then you should get in touch with your local government. see what is in place for that in your area or try to get something started.
i completely agree that its BS to have three or four masts that are just across the street from each other. (not sure the "fake tree" idea makes it any better though because those stand out just as much, if not more. lol.)
You know whats funny? The people who complain about too many towers in their neighborhood are almost always complaining about their horrible service and that they're always getting dropped calls.
Also from what I learned while working at Sprint a lot of towers typically house several antennas from various carriers
Another reason you may have so many towers is there could be higher population of cellphone users in your area. Each one can only hold a maximum number of calls at any given time
job cuts?
Not even close man, just, wow. Major Fail.
Engadget should make a way to mark all people that type "first' with some sort of marker. So we know who to avoid
They own about 20k towers... or so i read from somewhere when the news broke a few days ago.
dude, seriously, it's not funny.... is this all you have to do at 1:03 AM (perhaps you're in a different time zone, either way, is this all your life amounts to)? I'd be in bed but I'm programming :)
find a hobby bro, or like your name suggests, drink a beer!
“These are great towers concentrated in large metropolitan markets throughout the U.S. and will benefit as wireless communications continue to grow, ” said Richard Byrne, TowerCo's CEO."
The reason Sprint likely kept these towers on their books was due to the location they were in ("large metropolitan markets") and leasing in these areas was cost prohibitive. Hopefully Sprint secured advantagious lease rates over the next few years for not only CMDA but for WiMAX as well. Would imagine owning their own towers makes rolling out something like WiMAX much easier...especially in those initial WiMAX "large metropolitan markets".
I'm not Fenway Beer Man because I drink beer, I'm Fenway Beer man because I work at Fenway where I deliver kegs (I AM having a rum and coke though).
Cheers
So you attempted twice to be first? So let me guess, is this what went though your head? "Damn, I tried to be first, but it didn't work. I know! Let me try again!"
haha, I like you. I think I'll call you Peter.
:)
I'm thinking Sprint is some SERIOUS doodoo. They pretty much destroyed their SERO - sprint employee pricing plans. The only way I could get my clients to consider sprint was if their pricing was about half of what the real carriers was. Now their pricing is pretty close to on par with the big boys.
Hmm - we have the worst reputation of any carrier - how can we increase profits - I know - increase our rates? I didn't take an infinite number of economics courses but pretty sure demand goes down when pricing goes up on average. Maybe their goal is to cut their number of clients in half but more than double their prices - then they can cut personnel since they don't have as many clients to support.
Their phone selection may be awful, but the reception around Portland, OR is fantastic. Works on the coast, elevators, camping in the mountains, etc. Reception is the least of my problems with Sprint.
Jack Scalfani @ Jul 25th 2008 2:19AM
"You couldn't get a sprint signal if you were leaning against their tower here in the OC. Nextel used to be the worst signal around until Sprint bought that honor."
Odd, I'd say Sprint is nearly flawless in OC/LA for me. Possibly verizon being slighty better and T-mobile next. At&t? Forget about it. Drop calls galore and almost no reception in my house.
Everyone has to choose what works best for them where they live. If it wasn't for the iPhone I would have went back to Verizon. But I do get pretty good coverage with ATT. Where I do have problems is at work. Someone on Engadget commented once that the GSM signal doesn't have the penetration of CDMA. I believe that is true from what I observe. I work in a large factory and I can say that there are areas where nobody but Nextel users get a signal which is because Nextel is our company's carrier of choice and they installed internal antennas for us. But it does seem to me that Verizon users at our plant get better coverage than ATT users in most areas. Still, none of them are flawless not even Nextel. Some people tell me that Sprint and Nextel are using the same towers since they merged. I don't believe it from what I've observed.
So... their towers are worth $670M, eh? Heck, let's assume John is right and they built out 25,000 towers, for a value of $5B.
I had Sprint from 2001-2006. Let's assume their mobile division burst into existence when I signed up. I paid $40 month, and I think that wasn't below average. Let's assume half of the 300M people in America have a cell phone, that half of those use Verizon, that half of those use AT&T, and that half of *those* use Sprint/Nextel. That's 18M subscribers * $40/month * 12months/year * 7 years since 2001, or $60B worth of assets they should have! Not all towers mind you, but mostly, damn it, mostly!
But no, these freaks couldn't supply coverage to more than 2/3 of Berkeley, CA, an very wealthy and high-tech city with a young demographic, through 2006. In fact none of the mobile carriers could. And in fact AT&T still can't manage a handoff between San Jose and Cupertino on 85 in the middle of the day, when there's nobody on the road.
Ah, the beauty of "competition", courtesy of FCC bandwidth auctions and federal antitrust laws. Of course, they've been merged like gangbusters since 2004, and as a result we've seen some improvement.
You mean Ericsson or Nortel can't handle a handoff between San Jose and Cupertino. AT&T doesn't make cell towers. They simply bill you for the service. That's it.
No, I mean AT&T. They pay for the towers.
Carriers collect *vast* sums of money. Where does it all go?
The problem is made worse by FCC and antitrust rules, which basically dictate that we have multiple redundant cell phone systems, none of which provide complete coverage of even metropolitan areas.
"So... their towers are worth $670M, eh? Heck, let's assume John is right and they built out 25,000 towers, for a value of $5B.
I had Sprint from 2001-2006. Let's assume their mobile division burst into existence when I signed up. I paid $40 month, and I think that wasn't below average. Let's assume half of the 300M people in America have a cell phone, that half of those use Verizon, that half of those use AT&T, and that half of *those* use Sprint/Nextel. That's 18M subscribers * $40/month * 12months/year * 7 years since 2001, or $60B worth of assets they should have! Not all towers mind you, but mostly, damn it, mostly!"
Wow man....
Where did the money go? It's easy if you want to think about it in a reasonable fashion rather than just venting. They may have taken in $60B over the fictitious time period you mentioned, but remember, every business has expenses. The network doesn't magically take care of itself. Your bill doesn't remove the $.20 charge for the text message you swear you never received while sitting there reading it on your phone. The money mostly goes to the employees for wages, bills for utilities to keep the lights on and the signals humming, and responsibilities to the shareholders of the company and dividends. The money also goes to replace broken or outdated equipment, not all equipment expenditure goes for adding onto the network, most actually goes for enhancing and improving what is already there.
As for your other comment about why couldn't they cover your town, have you ever thought that maybe demand far outstripped their ability to provide coverage? The more people on the system in any given area at once, the less apparent signal and performance any one of those people will see. To improve coverage means adding towers. Adding just a single tower in that type of major metropolitan area can take months to a year or more just to get all the approvals, leasing and maintenance agreements hammered out and construction executed.
Let's say you make $100k a year at your job, and you have been working for 5 years. Now I'm pretty sure that you didn't buy your house in a day, and I'm pretty sure you need to eat and provide electricity to your house, so I'm pretty sure you aren't sitting on $500k at the end of that 5 years.
Yes, Eh, I understand. But any utility which invests less than 5% of their gross in infrastructure is inefficient. Period.
Demand in Berkeley outstripped supply... for 6 years running? That's a joke.
I happened to be intimately involved in the placement of new Sprint antennas in Berkeley during the period mentioned. The cost of dealing with the hippies in Berkeley was certainly a problem, but ultimately, there's something very wrong with the mobile phone industry from an efficient markets perspective.
"provides Sprint Nextel with additional liquidity [for] greater flexibility in managing the company."
read:
provides Sprint Nextel with much needed cash to dig itself out of its hole
The problem is the hole their in is of the bottomless type.
Wall, meet handwriting. Handwriting, I'd like you to meet the wall.
It made sense for Wireless carriers to own their own towers during the build phase of the early 90's to 2001 so that they could write off the cost of building them. Usually by controlling them under a shell like sprint sites usa. At the same time nobody had the capital to build thousand of towers only to lease it to one carrier. The tower companies made money by having multiple colos on each tower. But it is no longer cost effective for carriers to pay taxes, lease fees (to the property owners), maintenance fees (from grass and weed upkeep to lights and hardware on tower). Plus the manpower it takes to manage all of this. The only reason Crown Castle, American Tower, and Global Signal are profitable is because this it is their only business and they have national contracts which reduces the average site cost to maintain.
They do... It is called 'lowest rank'.
What I'm wondering is, what kind of retard names their company TowerCo?
The same retard who starts a company that after many years can pony up $670 million in cash to buy towers from Sprint? If your company owns TOWERS and deals with other BUSINESSES do you really think it matters what they're named?
/chuckle
drunken posting ftw.
This shouldn't affect their service, at all. What companies normally do is to lease the heights of the tower where they don't have anything to other carriers (co-location). If Sprint didn't want to deal with it, and focus in their core-business, whatever is left - good for them.
Regarding their WiMax effort, here are some reasons as to why the odds are against them: http://www.internetevolution.com/author.asp?section_id=617&doc_id=153313&f_src=flffour
@Squid
I believe you're the fail this time. Since you have to scroll past all the comments (or at least clink on the hyperlink that states the number of comments) in order to make a comment, he obviously knows he's not first.
It's funny how uptight that gets you guys. I wouldn't be surprised if within the group that complains so much about "FIRST" we find the people that started the whole thing. Frankly, low-ranking posts b/c you don't like what is said is stupid. Low-rank stuff because it's inaccurate is what I think.
Speaking of first and fail, what was it you said about that iPhone3G you got?
"better focus on its core business of providing communications services to consumers, businesses and government customers."
In other words they can stay in business, seeing as the above description is what they do. it's ALL they do. how much focus do you need? sprint = sinking ship.
brilliant idea :-(
So if the owners of the towers want to re-negotiate the lease, then sprint has no choice but to pay higher rent? Does this also mean that this owner can sell off it's own bandwidth and effect sprint/nextel customers?
And I'm also certain the maintenance on them will be awful, can we say slum lord?
Does this mean I won't hear those FREAKING ANNOYING chirps down the street bc someone* needs to feel like a big boy and use a phone that sounds like the worlds most annoying Walkie Talkie...I hope they go down in flames...
FYI: I don't think Sprint is going by the wayside, they're pushing WiMAX hard, and looks like AT&T isn't liking that idea too much...
You can bag on Sprint's customer service, but their network is leaps and bounds ahead of anyone else....
WiMAX phobia? AT&T tries to block Clearwire/Xohm merger
By Nate Anderson | Published: July 25, 2008 - 12:50PM CT
The proposed merger of Sprint's WiMAX Xohm subsidiary with Clearwire has the potential to be a hugely positive move. The new company pledges support for an open network, wholesale access, 6Mbps speeds, and good coverage. Stanford University thinks it's a good idea; so does the Catholic Television Network. Vonage likes it, and so does the Wireless Communications Association. But AT&T does not.
Related Stories
* Google, Intel and cable companies ponder nationwide WiMAX JV
* Sprint to use 1.6Gbps wireless backhaul for Xohm WiMAX
* Clearwire promises a fully-open, "third pipe" WiMAX network
The company has provided Ars with a copy of yesterday's FCC filing in which AT&T argues that the deal needs more scrutiny. An AT&T spokesperson tells us that the company "does not fundamentally oppose the underlying transaction," but it does say that Sprint and Clearwire "should be required to demonstrate that its merger serves the public interest just like any other providers would have to do." Until that happens, the deal should be put on hold.
Educational Broadband Service
First, a bit of back story. The FCC created the Instructional Television Fixed Service (ITFS) decades ago as a way of giving a small slice of spectrum to schools and universities. It was designed, as the name indicates, for beaming TV broadcasts around campuses and communities in order to pipe video feeds into classrooms (hence the interest of Stanford, etc). In 2005, the service was renamed to the much snappier Educational Broadband Service (EBS), which at least has the ring of modernity about it.
This spectrum occupies part of the 2.5GHz spectrum band, which is also where New Clearwire's WiMAX offerings will operate. ITFS/EBS license holders were allowed to lease out bits of their spectrum holdings for commercial use, and New Clearwire would control the vast majority of these bits, in addition to all of its other spectrum holdings.
The issue with the merger is that New Clearwire is downplaying its ITFS/EBS holdings. If a merger would result in one company controlling more than a certain amount of spectrum in a community, tighter FCC scrutiny is required. Specifically, the scrutiny is required if the post-transaction Herfindahl-Hirschman Index would be greater than 2,800 and the change in HHI would be 100 or greater.
Should a company control too much bandwidth, it needs to produce a "competitive analysis," which New Clearwire has not done. AT&T argues that ITFC/EBS would push New Clearwire over the threshold and the company shouldn't be allowed to discount these valuable assets.
Level that field
AT&T just says it wants a level playing field—though New Clearwire will be sure to point out that, just a few months ago, the FCC told AT&T that such spectrum didn't "count" in AT&T's buyout of Dobson Communications. AT&T says that it should count now, however, because so much has changed since then.
AT&T, no stranger to monopolistic power itself, sounds worried now that significant financial resources are behind the New Clearwire deal. In its filing, it tells the FCC, "Clearly, a company that has the largest spectrum position of any mobile carrier, deploying a service that is 'here now,' with financial backing from Google, Intel, and three of the nation’s largest cable television companies is capable of substantially impacting competition in the mobile communications market."
In other words, "New Clearwire is beating us to market with 4G wireless broadband, it has large spectrum holdings, and a raft of deep-pocketed investors. Won't you please take a closer look?"
FYI: I don't think Sprint is going by the wayside, they're pushing WiMAX hard, and looks like AT&T isn't liking that idea too much...
You can bag on Sprint's customer service, but their network is leaps and bounds ahead of anyone else....
WiMAX phobia? AT&T tries to block Clearwire/Xohm merger
By Nate Anderson | Published: July 25, 2008 - 12:50PM CT
The proposed merger of Sprint's WiMAX Xohm subsidiary with Clearwire has the potential to be a hugely positive move. The new company pledges support for an open network, wholesale access, 6Mbps speeds, and good coverage. Stanford University thinks it's a good idea; so does the Catholic Television Network. Vonage likes it, and so does the Wireless Communications Association. But AT&T does not.
Related Stories
* Google, Intel and cable companies ponder nationwide WiMAX JV
* Sprint to use 1.6Gbps wireless backhaul for Xohm WiMAX
* Clearwire promises a fully-open, "third pipe" WiMAX network
The company has provided Ars with a copy of yesterday's FCC filing in which AT&T argues that the deal needs more scrutiny. An AT&T spokesperson tells us that the company "does not fundamentally oppose the underlying transaction," but it does say that Sprint and Clearwire "should be required to demonstrate that its merger serves the public interest just like any other providers would have to do." Until that happens, the deal should be put on hold.
Educational Broadband Service
First, a bit of back story. The FCC created the Instructional Television Fixed Service (ITFS) decades ago as a way of giving a small slice of spectrum to schools and universities. It was designed, as the name indicates, for beaming TV broadcasts around campuses and communities in order to pipe video feeds into classrooms (hence the interest of Stanford, etc). In 2005, the service was renamed to the much snappier Educational Broadband Service (EBS), which at least has the ring of modernity about it.
This spectrum occupies part of the 2.5GHz spectrum band, which is also where New Clearwire's WiMAX offerings will operate. ITFS/EBS license holders were allowed to lease out bits of their spectrum holdings for commercial use, and New Clearwire would control the vast majority of these bits, in addition to all of its other spectrum holdings.
The issue with the merger is that New Clearwire is downplaying its ITFS/EBS holdings. If a merger would result in one company controlling more than a certain amount of spectrum in a community, tighter FCC scrutiny is required. Specifically, the scrutiny is required if the post-transaction Herfindahl-Hirschman Index would be greater than 2,800 and the change in HHI would be 100 or greater.
Should a company control too much bandwidth, it needs to produce a "competitive analysis," which New Clearwire has not done. AT&T argues that ITFC/EBS would push New Clearwire over the threshold and the company shouldn't be allowed to discount these valuable assets.
Level that field
AT&T just says it wants a level playing field—though New Clearwire will be sure to point out that, just a few months ago, the FCC told AT&T that such spectrum didn't "count" in AT&T's buyout of Dobson Communications. AT&T says that it should count now, however, because so much has changed since then.
AT&T, no stranger to monopolistic power itself, sounds worried now that significant financial resources are behind the New Clearwire deal. In its filing, it tells the FCC, "Clearly, a company that has the largest spectrum position of any mobile carrier, deploying a service that is 'here now,' with financial backing from Google, Intel, and three of the nation’s largest cable television companies is capable of substantially impacting competition in the mobile communications market."
In other words, "New Clearwire is beating us to market with 4G wireless broadband, it has large spectrum holdings, and a raft of deep-pocketed investors. Won't you please take a closer look?"
Perhaps a link next time instead of just copy and pasting.
So, you sell assets you need for a small amount of money that you will blow through in a quarter or 2, then you pay to rent them to someone else. All that may come out of this is they start offering GSM service because if they are renting towers they can expand the type they rent. If CDMA is going down, and Sprint wants its consumes to be able to have the advantages of gsm I guess it makes sense.
Why would they want to go to GSM, they're technology is way ahead of any GSM networks in America by years. Sprint started offering 3G, which AT&T just is STARTING to support, back in 2001.
OK way ahead if you don't count the fact that you are essentially locked to one phone and that you can't take your phone outside the US. You can take a GSM phone anywhere in the world (except Japan and south Korea). Thats the problem with Sprint and Verizon, your are locked to the phones they offer and you are locked to the US unless you pay for the loaner phone for your travels at rates of like $3 a day and $2/minute. With a gsm phone, you can just pop your sim out swap phones or numbers(services as well) and take your phone anywhere in the world. Admittedly Tmobile maybe slow in there tech rollout but ATT ' s Network is not so bad compared to the CDMA networks. CDMA networks are going away, Sprint is trying to get ahead of the curve.
Please read the article before posting. It states:
"The flagging carrier sold off "nearly all" (around 3,300) of its wireless communication towers..."
This means they sold off their TOWERS, not all of their co-locations agreements. By selling your TOWERS you create short-term liquid capital gains in the form of cash. The long term effect is that you are losing your rights to receivable income on the towers if someone else wants to co-locate on your tower.
Here is an analogy comparing towers to houses: You can buy a house just for you at $1,500.00 in expenses per month. If you decide to rent out part of your house, you could charge $1,000.00 rent per person you share it with. IF you keep expanding on your house each time someone else wants to live there, you cut your expenses and soon you make a profit.
Conclusion: Sprint is no longer a home owner- they just rent their home and can no longer enjoy the benefits of owning their property, and their long-term net worth is now lower because they couldn't take a mortgage out on it if they needed to down the road.
Huh? How is the article inaccurate? He doesn't even mention a word about location or impact on signal for the consumer. You made up the problem all on your own.
firsy