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Sprint (S -2.5%) opens lower thanks to a downgrade to Underperform from Baird, which is worried...

Sprint (S -2.5%) opens lower thanks to a downgrade to Underperform from Baird, which is worried about competition. Meanwhile, MetroPCS (PCS -6.5%) which tumbled yesterday after the terms of the T-Mobile merger failed to go over well, is falling more following a downgrade to Reduce from Nomura, which doesn't see T-Mobile fixing the carrier's problems. Mobile analyst Henry Wang agrees. "Being No. 4 in this very competitive market is no fun ... AT&T and Verizon can better procure the handsets that people want, and keep costs down as well."
Comments (5)
  • jt380
    , contributor
    Comments (72) | Send Message
     
    " ... AT&T and Verizon can better procure the handsets that people want, and keep costs down as well."

     

    AT&T and Verizon are the two most expensive cell carriers, there is no keeping the cost down at all. What is this tomfoolery?!?
    4 Oct 2012, 10:14 AM Reply Like
  • SA Editor Eric Jhonsa
    , contributor
    Comments (853) | Send Message
     
    I think he's talking about their operating costs, not their pricing.
    4 Oct 2012, 10:17 AM Reply Like
  • jt380
    , contributor
    Comments (72) | Send Message
     
    Ah, that would makes sense. Thanks
    4 Oct 2012, 10:20 AM Reply Like
  • brianguy
    , contributor
    Comments (25) | Send Message
     
    indeed, the wireless provider first has to decide how much they are going to pay the manufacturer (e.g. Apple, Samsung). VZ and ATT have better negotiating power in this realm, which helps keep their costs down (think, increased margins per handset / new contract), and also get a bit more exclusivity with non-Apple makers like Samsung and LG.

     

    however, Sprint has done pretty well in this dept with what they've got. but VZ and ATT are likely still buying their handsets wholesale for the best price, vs. what T-mobile, MetroPCS, or S would pay. that's part of the reason you often see slightly better phones for $99 or $199 from the 2 big boys than you would from the other guys.
    4 Oct 2012, 12:53 PM Reply Like
  • Matt-Man
    , contributor
    Comments (552) | Send Message
     
    Handset cost for TMO has been high as they used to use quite special frequency for 3G called AWS. AWS was not used by ATT or Verizon for 3G.

     

    Now AWS frequency is being used for LTE as well, however also ATT and Verizon (and MetroPCS) will be using same AWS for LTE.

     

    So finally TMO has same handsets available for their 4G as the big boys.
    4 Oct 2012, 11:01 PM Reply Like
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