Sprint's Dangerous Assumptions
John Zhang • 47 Comments
John Zhang • 47 Comments
Softbank Vs. Mr. Market On Sprint: Place Your Bets
Ted Barac • 16 Comments
Ted Barac • 16 Comments
Sprint's Dangerous Assumptions
John Zhang • 47 Comments
John Zhang • 47 Comments
Mon, Jan. 11, 9:06 AM
- With the unlimited data plan slowly dying among U.S. wireless providers, AT&T (NYSE:T) is bringing it back -- but as a promotion to boost its TV business.
- Shares are up 0.5% in premarket action.
- The company is offering its first chance in five years to sign up for unlimited wireless data, provided customers commit to DirecTV or U-verse.
- Subscribers can get the wireless plan for $100/month, with additional smartphones at $40. A fourth smartphone can be added for no extra cost.
- The move hints at a response to T-Mobile (NASDAQ:TMUS), which has made video streaming free on its wireless platform via a "Binge On" promotion, as well as to Verizon's (NYSE:VZ) Go90 video service. AT&T confirms it "plans to launch a wide-range of new video entertainment options later this year."
- Sprint (NYSE:S), along with T-Mobile, still offers an unlimited option, though it raised its price on the plan in September. AT&T raised prices on its grandfathered unlimited plans in November, following Verizon's increase in October.
Thu, Jan. 7, 4:50 PM
- An afternoon rout helped push Sprint (NYSE:S) down 6.7% -- now just 8% over its 52-week low of $3.10 -- the opposite direction from T-Mobile (TMUS +1.2%), again today the only one of the big four wireless providers to gain.
- Shareholders might take heed of Bernstein's latest report on the area, which says that even with the interest floated by cable companies, satellite firms and foreign entrants, Sprint and T-Mobile are more likely to rekindle merger talks with each other than anyone else.
- Most observers have thought that after a failed run in 2014, any new merger talks would wait until a new presidential administration, and indeed: "The prospect of a Sprint/T-Mobile merger — the only transaction that can materially affect the mobile sector's structure, conduct, and performance — will remain an overhang throughout most of the year," says Bernstein's Paul de Sa.
- What's more, he writes, "We think major, irreversible strategic moves (for example, a massive network investment by Sprint or the sale of a majority stake of T-Mobile or Sprint to another owner, such as Dish Network (DISH -2.1%) or cable) is unlikely to occur" until there's more clarity about a possible merger between the two.
- Such a deal has "by far" the largest cost and revenue synergies of the possible transactions, he says.
Wed, Jan. 6, 4:29 PM
- With a market stuck in the mire today after FOMC minutes showed a "close call" on its rate hike decision, Sprint (NYSE:S) was the only member of the big four wireless providers to finish in positive ground, up 0.3%.
- The company today said it was extending its expiring aggressive half-off promotion for another month, through Feb. 11. It'll continue offering 50% off standard plans for switchers from AT&T, Verizon and T-Mobile, and paying up to $650/line in switching fees. The response "has been oustanding," says CEO Marcelo Claure.
- Meanwhile, it looks like Sprint may be about to become the latest carrier to ditch two-year contracts and device subsidies. An insider report says after a Friday deadline, customers would only be able to pay full retail price on devices or finance them via installment programs.
Tue, Jan. 5, 3:49 AM
- New York City will begin this month replacing thousands of pay phones with free Wi-Fi hot spots that will sit atop a 9.5-foot tall box featuring electronic advertising screens and an Android tablet that can be used to place free phone calls.
- The $200M project, called LinkNYC, is being run by CityBridge, a joint venture between three tech companies: Qualcomm (NASDAQ:QCOM), CIVIQ Smartscapes, and Intersection (which has backing from Alphabet).
- "Free abundant Wi-Fi at those speeds could give people living in NYC, the country's largest market, a reason to spend less on wireless data services from carriers such as Verizon (NYSE:VZ) and AT&T (NYSE:T)," said Craig Moffett, senior research analyst at MoffettNathanson.
Sun, Jan. 3, 9:16 AM
- When the Centers for Disease Control and Prevention published new guidelines 18 months ago regarding the radiation risk from cellphones, it used unusually bold language: "We recommend caution in cellphone use."
- Within weeks, though, the CDC reversed course. It no longer recommended caution, and deleted a passage specifically addressing potential risks for children.
- Mainstream scientific consensus currently holds that there is little to no evidence that cellphone signals raise the risk of brain cancer or other health problems. Nevertheless, more than 500 pages of internal records obtained by NYT, along with interviews with former agency officials, reveal a debate and some disagreement among scientists and health agencies about what guidance to give as the use of mobile devices skyrockets.
- Related tickers: NOK, AAPL, BBRY, MSI, SNE, VZ, TMUS, T, S, OTC:SSNLF, OTC:HTCXF, OTCPK:ZTCOF, OTCPK:ZTCOY
Dec. 31, 2015, 5:13 PM
- T-Mobile (TMUS -1.6%) ended the year as the big winner among the U.S. wireless big four, finishing up 45% for 2015. AT&T was the only other to gain, and was up 2.4% for the year.
- Looking ahead, T-Mobile is already hoping to make a splash in the FCC's broadcast incentive auction of wireless airwaves, with CEO John Legere looking to be a "winner."
- "The lowband spectrum auctions will be the most important in recent U.S. history and will shape the future of the wireless industry for decades to come," Legere writes. "I predict that T-Mobile will walk away a winner."
- AT&T (T -1%) and Verizon (VZ -1.2%) will have more money to spend in the auction, but likely less interest, as both built their LTE networks on "beachfront" 700 MHz spectrum.
- Wells Fargo, though, has predicted that AT&T will spend the most (along with Verizon spending the least) in the sale. Sprint (S -0.3%; down 12.8% this year) has said it will sit it out.
Dec. 23, 2015, 3:03 AM
- Shortly after Marcelo Claure became chief executive of Sprint (NYSE:S) last year, he paid a small team of consultants at least $25M for advice to design a network quality plan that was largely never used, WSJ reports.
- The sum raised eyebrows among Sprint managers, and was eventually ended by Chairman Masayoshi Son, because of the contract price and the latter disagreed with many of the recommendations.
- Sprint, which hasn't reported annual profit since 2006, has been borrowing to sustain its cash use and had its junk credit rating lowered by Moody's in September.
Dec. 16, 2015, 3:05 PM
- Sprint (NYSE:S) has risen to a day's high, up 4.5%, as the post-FOMC market has picked up, but also after this afternoon's latest in the wireless industry's cavalcade of promos: a free TV.
- The carrier is offering a 32-inch Samsung LED TV with qualifying purchase/leases of Samsung Galaxy smartphones, in a one-week promotion ending Christmas Eve. It's available for switchers and existing customers who upgrade or add a line.
- That's atop the company's 50%-off promotion, still going on through Jan. 7.
Dec. 15, 2015, 4:09 PM
- Holiday trolling is still in vogue in the battle between Sprint (S +0.3%) and T-Mobile (TMUS +4.5%), as Sprint chief Marcelo Claure is sending a gift to competing employees with a special message.
- The company sent gift baskets with coffee, candy and snacks to T-Mobile employees with a card saying that while the two companies usually try to take business from each other, it's the season for giving.
- But an additional card with the basket says "Let's Move Forward. Together," and provides a link to Sprint's sales careers website.
- T-Mobile employees were told to throw out the baskets and avoid sharing on social media.
- Sprint's recent half-off promotion could be gaining it some 50,000 customers from T-Mobile alone this quarter, Jefferies analysts estimate.
Dec. 14, 2015, 3:39 PM
- Sprint (NYSE:S) is off 3.6% and still hanging in December doldrums after the company this weekend named its third chief marketing officer in less than a year and a half.
- Roger Solé is taking over for Kevin Crull, who will lead one of the four geographic regions in the carrier's new organizational structure. Crull had assumed the position in May.l
- Solé had joined Sprint from Brazil's TIM Participaçöes, and was leading Sprint's efforts in acquisition marketing and marketing to the carrier's Hispanic customers.
- Among Sprint's struggles with cash burn and customer acquisition, marketing has been unsettled in the past 18 months as it has rapidly changed approaches and campaigns in an effort to stem losses.
- Shares have fallen 20% since hitting $4.46 on Nov. 18.
- Previously: Sprint restructuring: Four regional hubs, uniting sales channels (Nov. 13 2015)
Dec. 8, 2015, 3:16 PM
- A full 42 California government entities have joined a lawsuit against the big four U.S. wireless providers -- AT&T (T -1.8%), Verizon (VZ -1%), T-Mobile (TMUS +1.2%) and Sprint (S +3.2%) -- alleging that they overcharged government customers by more than $100M.
- The entities, which include Sacramento and Los Angeles Counties and the University of California Regents, say the four have ignored cost-saving requirements that are in their contracts with state and local government customers.
- The companies were required to determine the lowest-cost plan and provide that; failing to do so meant that the plaintiffs missed out on 20-30% cost reductions, the suit argues.
Dec. 7, 2015, 7:34 PM
- With a hot holiday season ahead, Verizon (NYSE:VZ) has surpassed AT&T (NYSE:T) as the wireless industry's top advertising spender for November.
- Of a total $189.3M placing TV commercials, Verizon spent about $1.2M more than AT&T, for about 21.1% of the total, FierceWireless/iSpot.tv say.
- Those two were ahead of T-Mobile (NASDAQ:TMUS). Meanwhile, Cricket Wireless, AT&T's prepaid brand, was the fourth-largest spender, putting big-four member Sprint (NYSE:S) in fifth place -- with about half of its spending going to its new half-off promotion.
Dec. 7, 2015, 6:47 PM
- A serious courtship between America's No. 3 and No. 4 wireless providers went sour in 2014 after the government made it clear it wanted four players, and since then merger speculation (particularly among suffering Sprint shareholders) has held that any new move wuold have to wait for a new administration.
- But what if the relationship could be rekindled earlier? Overtures toward wireless service from Comcast (CMCSA -0.6%), or other cable firms yet to express interest, could allow for a union between T-Mobile (TMUS +3.2%) and Sprint (S +2.8%) while maintaining the desired competitive players.
- Comcast started a process that would let it resell Verizon airwaves and acknowledged it was testing a service for a launch sometimes in the future. One catalyst could be a heavy bid into the March spectrum auction.
- "It seems clear that Sprint is playing for time, presumably to try again to merge with T-Mobile in 2017-18 under a new administration," says analyst Crag Moffett. "By then, Comcast will likely have bought spectrum in the TV broadcast auction, making it plausible to argue that a Sprint/T-Mobile combination can be called a five-to-four merger, not a four-to-three."
- Several outcomes are yet possible, though, and not all favor Sprint: Comcast could use an auction bid as a precursor for its own T-Mobile buyout; firms like Alphabet or Amazon.com could buy spectrum; or private investor Chamath Palihapitiya could succeed in an audacious plan to bid billions of dollars in the auction to create a new player called Rama.
- Previously: Comcast: Testing wireless service, but in no hurry to launch (Oct. 27 2015)
Dec. 2, 2015, 3:42 PM
- It won't be the most surprising development, but Moody's is forecasting that wireless price wars will prevent real expansion in industry margins in the coming year.
- The firm estimates revenues (including equipment) to grow 3-4% overall, but that EBITDA margins will expand about 1%.
- In a bid to steal customers from the top two -- AT&T (T -0.4%) and Verizon (VZ -1.4%) -- Sprint (S -2.1%) and T-Mobile (TMUS -0.9%) have been pushing aggressive promotions, from Sprint resurrecting a "cut your bill in half" idea to T-Mobile dangling $200 in front of Sprint switchers.
- AT&T won't be chasing customers this season, says Jefferies' Mike McCormack -- the company believes the subscriber base it's losing is coming from "mostly lower-value postpaid subscribers and prepaid," he says.
Nov. 25, 2015, 7:23 PM
- Wells Fargo has picked its winners in March's FCC broadcast incentive auction for wireless spectrum -- and it figures AT&T (T +0.2%) will dominate bidding that should total $30B-$35B.
- Analysts at the bank predict up to $10B spending coming from the telecom giant for a nationwide block of 2x10 MHz airwaves.
- T-Mobile (TMUS -3.7%) -- which has been signaling aggressive moves in the auction -- will be second, with $8B spent, the analysts said, while Verizon (VZ -0.6%) should be last with $5B in bids. Sprint (S -1.8%) has already said it's sitting this one out.
- While AT&T backtracked a bit on pledges to spend $9B while it was digesting DirecTV (NASDAQ:DTV), the analysts think the benefits of a nationwide block may signal higher spending from the company.
- Verizon, meanwhile, has credit to spend up to $10B, but probably won't: "Similar to what T has said publicly and based on our conversations with spectrum experts, we look for VZ to contribute in a meaningful way if 2x10MHz bands are made available."
- Previously: T-Mobile -2.2% as it pledges $200 for each Sprint line that switches (Nov. 25 2015)
- Previously: SoftBank spending: Arora on investment universe, Sprint worries (Nov. 24 2015)
Nov. 25, 2015, 10:20 AM
- It's been nearly straight down out of the open for T-Mobile (NASDAQ:TMUS), down 2.2% after it announced a special "holiday gift" for Sprint (S -0.5%) customers: $200 to switch carriers.
- That's on top of the up to $650 T-Mobile is offering to cover early termination fees and phone payment balances, and it's $200 for each line switched.
- "I cannot think of any wireless customers in more desperate need of some holiday cheer than those Sprint customers still hanging on over there," said T-Mobile CEO John Legere. "Those poor people have put up with the nation's slowest and smallest LTE network, and their carrier throwing out a deal-of-the-month for everyone except them."
- The deal includes switching any Sprint number (postpaid, prepaid, Boost or Virgin Mobile) to a T-Mobile Simple Choice postpaid plan. It's effective starting Thursday.
- Legere promised additional "gifts" coming to Verizon and AT&T customers over the next few weeks.
Sprint Corp. operates as a communication company, which offers a comprehensive range of wireless and wire line communications products and services to consumers, businesses and government users. The company operates through two segments: Wireless and Wireline. The Wireless segment offers... More
Industry: Wireless Communications
Country: United States
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