Monday, November 12, 2007

Who's Buying Sprint?

The rumor mill is awash with Google buying Sprint. With the ousting of the CEO, the horrible quarterlies, the Clearwire split, and its underutilized network, many shareholders probably wish it would get purchased. Gary Kim says that this is just bankers floating a balloon (since bankers make out like bandits in these transactions).

  1. Spin off the iDEN network - focusing solely on government, schools and public safety;
  2. The CDMA division should become a Purple Cow with 4G, lots of apps & BYO handsets;
  3. Remember you used to be the # 3 long distance company? You know that pin drop thing?
  4. Start utilizing that Tier 1 Internet backbone!
  5. Create a better store/portal for all the apps that can run on the handsets on your network.
  6. You have Agents that want to sell your stuff --- Help them do that!

But is it worth $50B????

If you are Google, you could:

  1. Buy 700 MHz spectrum for $6B
  2. Work with MOTO, Intel, Cisco/Navini, Ericcson, Nokia, or Clearwire to build out the network from 2009-2011. (Or any combo of those companies) - $2-3B.
  3. Create an open source OSS to allow for open network.
  4. Open network to devices and providers and micro-payments.
  5. Be up and running in 2012.

It would be cheaper to buy Sprint for $50B and sell off the parts you don't need. By 2012, the landscape will look entirely different as the yokes will be off Ma & Pa Bell (ATT & VZ). You need a foothold now. Cable, DBS, VoIP providers, content companies --- are all looking for a Third Pipe. So is the consumer.

UPDATE: Wired story. Another blog post. zdnet's cranky post. Alley Insider on why Google won't buy Sprint. (I don't think anyone actually thinks it will happens, just that it's fanciful to write about on a dull news day to see if the stock can bump. GOOG was down $32 and S down $0.51.

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