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Gerard Hallaren, CFA  

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  • AT&T: The Mobile Pricing War Is Less Than A Threat Than You Might Think [View article]
    Thanks for your article, good work in both markets.

    I measure combined postpaid service and hardware revenue per user per month. It is a somewhat inaccurate gauge because, T-Mobile and Sprint get a higher portion of their revenue from prepaid than do AT&T and Verizon. Prepaid revenue tends to have a higher hardware content than postpaid does. However, the error is consistent and thus can help identify the trend.

    Based on this calculation in Q4/2014, the industry weighted average service and hardware revenue per sub was $104.07, up $11.54 or 12.4% sequentially. Verizon was the big percentage gainer at +18.7%, T-Mobile was up 18.3%, Sprint was plus 12.2% and AT&T was relatively flat at 0.5%.

    Because of lower gross addition volumes typical in Q1, I expect flattish Service & Hardware Average Revenue Per User and in AT&T's case I expect it to be down. This has more to do with the seasonal drop off in new subscribers in Q1 than Q4. Expect the uptrend to be more obvious in Q2 and Q3.

    BTW: Sprint and T-Mobile have both confirmed that their average combined service and hardware bill is higher than in the past. To me, this makes sense. The carriers are now charging full price for hardware where they used to subsidize 40% to 60% and with lower service prices (to reflect the end of the hardware subsidy) consumers are buying more of the less expensive service.
    Apr 20, 2015. 11:11 AM | 1 Like Like |Link to Comment
  • Is It Time To Speculate On Sprint? [View article]
    TRADE2TRAVEL1: I am not upside down in my Sprint investment. On a pure share price basis I am up 1 cent against my average cost. Then add proceeds from calls written (without giving up a share) and you would find the position nicely profitable.

    What do you mean when you say a "title clearer." Were you thinking a trifle clearer? What can I clarify for you. Are you still confused about retention and churn? If not, would you kindly acknowledge that what I wrote was accurate? or, has this all been too much for you and you plan a career change out of telecom?
    Apr 19, 2015. 09:13 PM | 1 Like Like |Link to Comment
  • Is It Time To Speculate On Sprint? [View article]
    Trade2Travel1 -- I absolutely agree with you. TMUS is not churning 40% and AT&T or Verizon are not churning 25%. Nowhere in my post does it assert anything like what you think you read.

    My post is about retention, not churn. In disparaging my post as "not Accurate at all," you did not even notice that I did not use the word churn. Churn is (usually) monthly statistic based on the total customer base. Retention only examines those customers up for renewal.

    If this is new to you or confusing, you may want to consider changing industries. Conversely, you might impress your bosses by asking about retention in a conversation about churn.
    Apr 19, 2015. 02:45 PM | 1 Like Like |Link to Comment
  • Is It Time To Speculate On Sprint? [View article]
    If I thought this was true, I'd be doing a happy dance of joy. 24% leaving, means 76% are staying. AT&T and Verizon retain about 75% of their customers. Sprint and T-Mobile bounce around from the mid 40%s to about 60%.
    Apr 18, 2015. 05:29 PM | Likes Like |Link to Comment
  • Is It Time To Speculate On Sprint? [View article]
    The best way to get out of a hole is to stop digging. Sprint has stopped digging and is starting what will be a long climb.

    The interesting thing about these ratings is that the statistical difference between 96.3 and 98.6 doesn't matter to most consumers. The difference between Sprint's 79.5 and Verizon's 93.9 is HUGE. In my hometown, Denver, Sprint's data service is miles better than anyone else. At work in Greenville, Sprint has improved to be comparable to the leaders. But that is VERY recent.
    Apr 13, 2015. 09:33 AM | 2 Likes Like |Link to Comment
  • Is It Time To Speculate On Sprint? [View article]
    agree -- you might like to see this root metrics report comparing Sprint's network to others in my home town. http://bit.ly/1Crozqi
    Apr 10, 2015. 02:14 PM | 2 Likes Like |Link to Comment
  • Is It Time To Speculate On Sprint? [View article]
    I am trying to rationalize the same as you. Personally, I don't know of a cheaper stock and am long Sprint. At some point, I think people will get excited. The subscriber numbers are improving and Sprint has about the same amount of spectrum as AT&T and Verizon combined.
    Apr 10, 2015. 02:11 PM | 4 Likes Like |Link to Comment
  • Is It Time To Speculate On Sprint? [View article]
    I agree with you, there is not a lot of passion. I think former Sprint CEO, Dan Hesse's inability to execute on his wealth destruction strategy bored analysts. "We will fail if we don't leverage up and buy, PCS or T-Mobile." In the meantime, let us forget we have the largest single band spectrum position in the US. Claure, seems to have panache and good business sense. However, he has not yet "come out" to the street. That may start to change on May 5 when Sprint reports earnings and outlines plans for 2016.
    Apr 10, 2015. 01:31 PM | 2 Likes Like |Link to Comment
  • AT&T And Rooting For Lower Prices [View article]
    You should not be concerned regarding a prolonged period of price drops. Previously, the carriers gave you a phone at a 75% to 90% discount and underwrote the expense with higher (than today) service fees. Now the carriers charge customers for both phones and service. Overall bills are higher. Yes, service fees are lower. Hardware bills exceed the reduction in service. IMHO, this is all good. Telecom analysts are only focused on the network. They do not pay attention to the whole picture.
    Apr 6, 2015. 05:27 PM | Likes Like |Link to Comment
  • What Do 1,750 New Stores Mean For Sprint? [View article]
    You may be right. I thought is got a marked to market and a below the line integration rather than a full consolidation. Where could I find that?
    Apr 2, 2015. 10:33 PM | Likes Like |Link to Comment
  • Did BlackBerry's Profit Come At Too High Of A Cost? [View article]
    Chen clarified his comment to handset profitability to say they have had positive gross profits on handsets for the last 3 or 4 Quarters.
    Mar 29, 2015. 09:09 PM | 6 Likes Like |Link to Comment
  • What Do 1,750 New Stores Mean For Sprint? [View article]
    The big one is that at 80% or more it has to include Spirnt's results in its financial statements. As long as Sprint is making large losses I believe SoftBank will be reluctant to do this.
    Mar 29, 2015. 09:07 PM | Likes Like |Link to Comment
  • What Do 1,750 New Stores Mean For Sprint? [View article]
    BTW -- you might want to check out Sprint’s new WPaaS (Workplace as a Service) This is a soup to nuts business offering, likely BES based. $200/user/month.
    Mar 23, 2015. 02:42 PM | Likes Like |Link to Comment
  • What Do 1,750 New Stores Mean For Sprint? [View article]
    We all think of this stuff differently and that is the beauty of SA. My primary fear is that SoftBank will use its control to the detriment of other Sprint Shareholders. There are an abundance of control provisions granting minority shareholders what seem to be a very good rights package in the context of controlled companies. This is hardwired in my thinking.

    You may also recall that following the close, SoftBank made open market purchases of roughly 72MM shares at an average price of $6.69 to get to just under 80% from the 78% they got on the deal.

    Personally, I have no recollection of any restrictions on SoftBank selling Sprint shares. A VERY quick review of the closing 8K yielded nothing about selling restrictions. If SoftBank dropped below 50% ownership they lose a lot of rights. There are also some negative consequences if SoftBank goes over 80%.
    Mar 23, 2015. 02:28 PM | Likes Like |Link to Comment
  • Sprint: Don't Follow Executives Into Stock [View article]
    What is in SoftBank's portfolio that you believe is not successful besides Sprint?
    Mar 16, 2015. 09:07 PM | Likes Like |Link to Comment
COMMENTS STATS
310 Comments
318 Likes