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Sprint's Fall - Big Unforeseen Consequences; Impact on Wireless Industry; Takeover Possibilities; Fixing It

Boschulte Schnee Group LLC
March 15, 2008
170 Pages - SKU: BSL1696441

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Sprint has become a loose cannonball on the deck of the U.S. wireless industry. Its decline may appear to favor the larger incumbents, however, Sprint’s drastic fall could have a number of unintended consequences that dramatically reshape the U.S. wireless industry.

"Sprint’s Fall" provides a thorough analysis of where this potential catastrophe could lead. It examines the implications of a possible takeover of Sprint - who could do it and the financial viability. It provides an intensive analysis of Sprint’s pivotal role in WiMAX and how WiMAX development could be affected by Sprint’s problems. It projects the future returns from this new development as well as the optimal strategies for Sprint to pursue. The study explains how Sprint can still be turned around: It dissects the exact moves that the new management is making and is likely to make in the future. It zeroes in on where management is moving in the right direction and pivotal mistakes it is already committing.

CHAPTER 1 -- SUMMARY OF CONCLUSIONS: Overview - Sprint's Strategy Dilemma; Sprint's Immediate Issues; The Wireless Industry's Big Two Facing Challenges; A New Direction for Sprint; Valuation Potential -- If Fixed Timing; Unforseen Consequences of Sprint's Fall
CHAPTER 2: DETERIORATION SINCE THE NEXTEL MERGER: New CEO: New Era?; How Sprint Created The Mess; Sprint - Pre-Nextel Merger; Nextel - Pre-Merger; Nextel - The Pre-Merger Outstanding Issues; The Merger - Motivations and Positioning; Evaluating The Merger; Sprint Subscriber Growth - Since Merger; Record Since Merger - Wireless Earnings
CHAPTER 3: COMPARISON TO THE BIG TWO: Comparison to Verizon and AT&T Subscriber Growth; Comparison To Verizon and AT&T Earnings; Other Subscriber Metrics - ARPU, Churn; Data Revenue Growth; Plant and Capex Growth; Comparison to Verizon and AT&T Plant and Capex Growth; Metrics Comparing Sprint, Verizon, AT&T Recent Performance and Growth Rates; Comparison To Verizon and AT&T: Product And Service Offerings; Handhelds; Services
CHAPTER 4: PINPOINTING AND FIXING THE PROBLEM: The CDMA And iDEN Core Business Of Sprint; Business Integration; Rebanding And Network Integration; End Game For iDEN (Nextel) Base; Integration Issues - Where Sprint Is Today; New Growth Strategy - QChat Plus ("Push To; Growth Strategy - The New "Push To" Market; Distribution And Marketing; Future of Nextel Connect Distribution; Customer Service, Back Office; Network Integration - iDEN/CDMA; Network Integration - Competition
CHAPTER 5: FIXING THE CORE BUSINESS - METRICS: Subscriber Growth; Pricing (ARPU), Customer Acquisition and Retention Costs, Churn, Capex; Margin Improvement; Cash Flow Outlook
CHAPTER 6: WIMAX - EVALUATING SPRINT'S POSITION: Overview of WiMAX Alternatives; Keeping WiMAX - The Issues; Background: Wireless Industry - Important Considerations; WiMAX - Status; Sprint's Resources For Doing WiMAX; Is Keeping WiMAX Compatible With Fixing the Core Business?; WiMAX - Resources Required; Risks
CHAPTER 7: WIMAX - SPRINT'S OPTIONS: Develop WiMAX Internally - How To Develop Compatibility With Core; Spin-off to Shareholders; Likely Value Creation - Complete Spin-off; Spinco Management And Control; Spinco Financing; Keep Spectrum Drop WiMAX Plans; Sell WiMAX Operation; Merge WiMAX Operation (including New Entity); Value Creation Analysis: WiMAX in the U.S. - Next Five Years; Evaluation of Sprint's WiMAX Alternatives; Conclusions Regarding WiMAX Alternatives
CHAPTER 8: TAKEOVER POTENTIAL: The Case For A Takeover Of Sprint; Management Team; Value of the Core Business; Potential Takeover Candidates - Industry Companies; Potential Takeover Candidates - Financial Parties; Projections of Core Results And Valuation; Projections of WiMAX Results and Valuation; Combining Core And WiMAX Projections; Valuation of Sprint Wireless Assets; Long Distance Operations; Future of Boost Mobile - Value of Prepaid, Low End Strategy; Competitive Comparisons to Boost; Conclusions On Boost
Charts, Diagrams Figures and Tables: Chart 1-1. Sprint - Gross Adds by Category and Quarter, 6/06-12/07; Table 1-1. Sprint - Gross Adds by Category and Quarter 6/06-12/07; Table 1-2. US Mobile Subscriber Growth 2000-07; Table 1-3. Verizon, AT&T, Sprint Individual Plans; Table 1-4. Mobile Data/Content Use, By Category 1/07; Table 1-5. Sprint, Verizon, AT&T - Data Revenue 2006-07; Table 1-6. Wireless Only Households (HHs); Table 1-7. Major Wireless Challenges & Likely Impacts; Table 1-8. Summary Forecast 2008-2010; Chart 1-2 Sprint Strategies vs. Big Two: Past, Present, Future; Table 1-9. Sprint: Faster vs. Slower Recovery Scenario; Table 1-10. WiMAX Results - Positive Scenario - Year Five; Table 2-1. Sprint - Pre-Nextel Merger, 1H 2005; Table 2-2. Sprint Wireless 1H 2005 vs. 1H 2004; Table 2-3. Nextel Pre-Merger, 1H 2005 vs. 1H 2004; Table 2-4. Nextel Pre-Merger Key Issues and Solutions; Table 2-5. Sprint - Nextel Comparison; Table 2-6. Unique to Sprint - Management Challenges Not Faced by Cingular (AT&T) or Verizon; Table 2-7. Sprint Nextel 2.5GHz Spectrum Holdings; Table2-8. Sprint Subscriber Growth Q3 '05 - Q3 '07; Table 2-9. Sprint Subscriber Base Growth 3Q '05 vs. 3Q '07 & 4Q '07; Table 2-10. Sprint Pro Forma Financial Results Q3 '05 - Q3 '07; Table 2-11. Sprint Growth Q3 '05 - Q3 '07; Table 2-12. Sprint Margin Analysis Q3 '05 - Q3 '07; Table 3-1. Sprint, Verizon Wireless, AT&T Mobility Subscriber Growth 2005-9/07; Table 3-2. Sprint, Verizon Wireless, AT&T Mobility Subscriber % Growth 2005-9/07; Table 3-3. Sprint, Verizon Wireless, AT&T Mobility P&L 2005-9/07; Table 3-4. Sprint, Verizon Wireless, AT&T Mobility Growth Rates 2006 vs. 2005 9 Mos. 2007 vs. 9 Mos. 2006; Table 3-5. Sprint, Verizon Wireless, AT&T Mobility Margin Analysis 2005-9/07; Table 3-6. Sprint, Verizon WL, AT&T Mob. - ARPU and Churn 2006 9 Mos. '07; Table 3-7. Sprint, Verizon WL, AT&T Mob. - Data Revenue 2006 9 Mos. '07; Table 3-8. Sprint - Company-wide - PPE, Capex, Depreciation Data 2005-9/07; Table 3-9. Sprint, Verizon WL, AT&T Mob. - PPE, Capex, Depreciation Data 2005- 9/07; Table 3-10. Sprint, Verizon WL, AT&T Mob. - Revenue, Operating Income, OIBDA as a % of Net Plant, 2005- 9 Mos. '07; Table 3-11. Sprint, Verizon WL, AT&T Mob. - Revenue, Operating Income, OIBDA Growth (Year-to-Year Period) and as a % of Capex, 2006 - 9 Mos. '07; Table 3-12. Categories of Products and Services; Table 3-13. Sprint, Verizon, AT&T Handhelds, By Price; Chart 3-1. Sprint Singly Everything Plan; Table 3-14. Sprint Individual Plans; Table 3-15. Verizon, AT&T, Sprint Individual Plans; Table 3-16. Sprint Family Plans; Table 3-17. Verizon, AT&T, Sprint Family Plans; Table 3-18. Sprint Boost Prepaid Plans; Table 3-19. Verizon, AT&T, Sprint Prepaid Plans; Table 3-20. Sprint Boost Mobile - Phones Offered; Table 3-21. Sprint Data Plans; Table 3-22 Sprint Messaging Plans; Table 3-23. Verizon PDA and Smartphone Plans - Email and Messaging; Table 3-24. AT&T Data/Messaging Plans; Table 3-25. Sprint Power Vision Packs; Table 3-26. Sprint Content/Media Services; Table 3-27. Verizon V Cast Plans; Table 3-28. AT&T Content/Media Offerings; Table 3-29. Verizon Business Plans; Table 3-30. AT&T Business Data Plans; Table 4-1. Rebanding (Nextel Deal With FCC); Figure 4-1. Push-to-Talk (PTT) Technology Alternatives - Genre A - 2005-2008; Figure 4-2. Push-to-Talk (PTT) Technology Alternatives - Genre B - 2005-2008; Table 4-2. Genre (B) - PTT Products and Status; Table 4-3. iDEN Replacement Technology What/When/Who Chart; Table 4-4. Sprint Distribution Channel Assessments; Table 4-5. Sprint Status of Unified Billing Project; Table 5-1. U.S. Mobile Subscriber Growth 2000-07; Table 5-2. Sprint Free Cash Flow - Consolidated; Table 5-3. Sprint Wireless Preliminary Projection 2006-2010; Table 5-4. Sprint Wireless Optimistic Preliminary Projection 2006-2010; Diagram 6-1. Sprint - WiMAX Alternatives; Table 6-1. Sprint 2008 - WiMAX Developments; Table 6-2. Sprint Nextel 2.5GHz Spectrum Holdings; Table 6-3. Sprint 2.5GHz Spectrum Breakdown; Table 6-4. 4G Technology Alternatives Considered By Sprint; Table 6-5. Sprint WiMAX Ecosystem; Table 6-6. Sprint WiMAX Capex Estimates; Table 6-7. Sprint WiMAX Capex Breakdown; Table 6-8. Sprint WiMAX 2007-08 Buildout Elements; Figure 6-1. Sprint-Clearwire Proposed Geographic Split (Sprint in White); Table 6-9. WiMAX Risks and Evaluation; Figure 7-1. Sprint Slide On WiMAX Growth Strategy (8/07); Diagram 7-1. Sprint WiMAX-CDMA Business/Network Progression; Table 7-1. Clearwire Valuations and Operating Data; Table 7-2. Spinco Valuation Parameters; Table 7-3. Management Issues, Sprint/Spinco; Table 7-4. Sprint & Nextel 2.5 GHz Holdings; Table 7-5. 2.5 GHz Spectrum Pricing 2000-2006; Table 7-6. Recent Spectrum Sales/Transactions; Table 7-7. Pricing of Sprint Spectrum On a Sale; Table 7-8. Sprint Sale of WiMAX; Table 7-9. 4G Technology Alternatives; Table 7-10. WiMAX Results - Comparison of Two Models - Year Five; Table 7-11. WiMAX Alternatives: Outlook and Risks; Table 7-12. WiMAX Alternatives Potential Returns to Shareholders; Table 7-13. Sprint - Keeping WiMAX vs. Spin-off: 5-Year Outlook; Chart 8-1. Sprint Top Management Team; Table 8-1. Sprint Current Valuation of Core Business; Table 8-2. Google - Telecom Initiatives; Table 8-3. Sprint Wireless Preliminary Projection 2006-2010; Table 8-4. Sprint Estimated (2010) Compared to VZ, T and AT; Table 8-5. Sprint Core Valuation Assumptions - 2010; Table 8-6. WiMAX Projected Results, Years 3-5; Table 8-7. Projected Valuation of Sprint 2012 - Favorable & Unfavorable Cases; Table 8-8. Sprint - Summary Estimated Wireless Asset Values 3/08; Table 8-9. Sprint - Breakdown of Summary Estimated Wireless Asset Values 3/08; Table 8-10. Sprint LD Operations 2005-9/30/07; Table 8-11. Sprint LD Compared to Level 3, Qwest and Global Crossing - Summary Results; Table 8-12. Sprint LD - Comparison to Level 3, Metrics; Table 8-13. Boost Compared To Other Prepaid Carriers

Sprint's Fall - Big Unforeseen Consequences; Impact on Wireless Industry; Takeover Possibilities; Fixing It

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