Verizon, Sprint, T-Mobile slide following AT&T's guidance


Verizon (VZ -1.5%), Sprint (S -2.2%), and T-Mobile (TMUS -1%) have each closed lower after AT&T guided for no Q2 wireless service revenue growth, and a weak wireless service EBITDA margin.

Investors have already been nervous about the impact a T-Mobile-driven price war stands to have on the top and bottom lines of rivals. AT&T mentioned adoption of its Mobile Share Value plans, which saw price cuts after T-Mobile announced a series of aggressive moves, are pressuring its ARPU.

Verizon, though offering some modest promotions, has generally stuck to a premium pricing strategy; its disappointing Q1 postpaid subscriber adds - 539K net adds with an estimated 95K decline for phones - fueled questions about whether a strategy change is needed. The fact AT&T expects to add 800K+ postpaid subs in Q2 might heighten those concerns.

Sprint has been more aggressive than Verizon, launching its low-cost Framily plans in January and heavily promoting them. But it lost 231K postpaid subs in Q1 as it scrambles to neutralize Verizon/AT&T's 4G coverage leads.

One encouraging AT&T datapoint: The carrier expects ~2/3 of postpaid smartphone subs to be on subsidy-free Mobile Share Value plans by year's end. Both AT&T and peers have made slashing subsidy spend a priority.

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Comments (4)
  • rjnhawaii
    , contributor
    Comments (203) | Send Message
     
    ATT also thinks U-verse works as well as Verizon's FiOS!

     

    2 wire copper v. fttp
    3 Jun 2014, 04:56 PM Reply Like
  • BTinSF
    , contributor
    Comments (310) | Send Message
     
    In urban areas, FiOS is roughly the same as U-verse technologically. In large apartment buildings such as mine, in both cases the fiber comes into the basement or to the curb outside and from there it's coaxial cable to my apartment. You really only get a direct fiber connection if you live in a single family home that's wired for it.
    4 Jun 2014, 03:05 AM Reply Like
  • U2A Ventures
    , contributor
    Comments (335) | Send Message
     
    the move is to buy S here on the dip for a short term trade I think
    3 Jun 2014, 06:40 PM Reply Like
  • Nbk62ar
    , contributor
    Comments (4) | Send Message
     
    Definitely, look at the high call buying for June, July, August. Merger any day now.
    4 Jun 2014, 12:33 PM Reply Like
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