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Dec. 17, 2015, 4:50 PM
- As part of a deal declared to be an expansion of the companies' "long-term strategic relationship," AT&T (NYSE:T) is "transitioning" its managed app and managed hosting services unit to IBM. Big Blue will also acquire equipment and floor space access in AT&T data centers supporting the business. (Press Release)
- Once the deal closes, IBM will deliver the manged app/hosting services currently provided by AT&T. The offerings will be "aligned" with IBM's cloud services portfolio.
- No details have been given yet about the deal's revenue impact, or about how much (if any) money is changing hands. It follows a Q3 in which IBM's global tech services revenue fell 10% Y/Y to $7.9B, and its global business services revenue 13% to $4.2B, amid cloud and forex pressures. The company is already a notable player in the managed app and hosting markets; its SoftLayer unit participates in the latter.
- Within its Business Solutions segment, AT&T's fixed strategic services revenue (has included hosting, Ethernet, cloud, VPN, and security services) rose 12.6% Y/Y in Q3 to $2.76B. That helped offset an 8.7% drop in legacy voice/data service revenue to $4.5B.
Dec. 17, 2015, 1:02 PM
- With new net neutrality rules in place since early this year, the FCC says it's calling on Internet service providers to discuss their innovative data policies -- with what seems like a focus on growing use of traffic exemptions from data caps.
- The agency sent letters to Comcast (NASDAQ:CMCSA), AT&T (NYSE:T) and T-Mobile (NASDAQ:TMUS) asking them to come in and "have a discussion with us" about their approaches to data service.
- FCC Chairman Tom Wheeler surprisingly weighed in on T-Mobile's "Binge On" free video streaming as "highly innovative and highly competitive." And Comcast's Stream TV service wouldn't count use of Comcast services against that company's data caps, while AT&T has a similar approach via content partnerships.
- So-called "zero rating" involves companies exempting certain kinds of traffic from data limits, but has drawn some criticism from observers arguing that it amounts to another form of paid traffic prioritization.
- Previously: FCC chairman: T-Mobile video initiative 'highly competitive' (Nov. 19 2015)
Dec. 15, 2015, 1:06 PM
- CenturyLink (CTL +3.5%) -- and to a lesser extent, Frontier Communications (FTR -0.4%), Verizon (VZ +0.6%) and AT&T (T +0.8%) -- could see upside with Congress looking at renewing a capex tax break for industries including telecommunications.
- UBS analyst John Hodulik sees legislators pursuing a retroactive 2015 extension of bonus depreciation, which lets companies deduct half the cost of some capital equipment purchases immediately, and which would boost free cash flow. Legislators could also extend the deal into 2016 or beyond as well.
- "We believe CenturyLink would be the largest beneficiary" of that extension, Hodulik says, with free cash flow rising 44% after its tax bill drops from an expected $1B to around $350M.
- Other companies would benefit as well: Frontier's free cash flow would rise about 19%, while AT&T and Verizon could see gains of 11% each if the break gets a retroactive extension.
Dec. 14, 2015, 4:12 PM
- AT&T (T +1.3%) is raising prices on its U-verse services, passing along higher delivery and programming costs to consumers in 2016 (and also adding juice to its efforts to push customers to its lower-cost DirecTV platform).
- Monthly rates for its U-family and U-family All In packages will rise by $2/month. Other plans will see increases of $3 (U100, U200, U200 All In, U200 Latino and U200 Latino All In) or $4/month (its U300, U400 and U450 plans).
- Non-DVR TV receivers will cost $1/month extra as well, along with increases in the Broadcast TV surcharge, among other fee bumps.
- Earlier, the carrier announced its latest holiday smartphone promotion, a buy-one get-one offer for Samsung Galaxy S6 or iPhone 6s (with some heavy conditions).
Dec. 14, 2015, 10:43 AM
- The Supreme Court has handed a win to DirecTV (T +0.5%), freeing it from a class-action suit in California by backing its arbitration clauses.
- The California case concerns early termination fees. U.S. Justices ruled 6-3 that company contracts prohibit customers from joining together in class-action suits, and that federal law trumps state law on the matter.
- A California appeals court (and later its Supreme Court) had ruled in favor of the subscribers, since state law prohibits agreements waiving rights to bring a class action.
- The U.S. Supreme Court said California law is pre-empted by the Federal Arbitration Act, allowing companies to require one-on-one arbitration of complaints.
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. 8, 2015, 1:15 PM
- AT&T (T -1.1%) is joining the club, planning a mobile entertainment service of its own to catch up to ambitious plans from pipe-owning competitors.
- At the UBS investor conference, CEO Randall Stephenson pointed to 30M homes without pay TV subs in outlining hopes to offer an over-the-top video bundle for people without a satellite subscription.
- He said January was the launch time frame for a package with "mobile stacked content together with a really robust wireless asset."
- Verizon (NYSE:VZ) launched its Go90 service in beta in September promising hours of free content to users regardless of mobile service, and was live at the beginning of October.
- The DirecTV move has made it possible for AT&T, Stephenson explained. "You go down the premium content channels" -- HBO, Showtime, Starz, A&E, et al. -- "we got the stacking rights and mobile rights ... This is about the best over-the-top portfolio of content I believe in the United States."
- In his talk, he also mentioned that there's "a little pressure" on the company's video subscriber numbers with some people migrating from U-verse to DirecTV, but AT&T still has "a shot" at Q4 growth and "for sure, as we move into the first quarter, we will have TV subscriptions growing."
- Previously: Verizon's Go90 video service enters app charts after wide launch (Oct. 02 2015)
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, 3:17 PM
- AT&T (T +0.4%) is planning a gigabit Internet launch in 38 more metropolitan areas, which would bring its GigaPower offering to 56 total.
- The company says it's present in 20 of the biggest metros with a new launch in Los Angeles and West Palm Beach, Fla.
- Also included in the new launch are Oakland, Sacramento, San Diego, San Francisco and San Jose, Calif.; Indianapolis; Louisville; Detroit; Cleveland and Columbus, Ohio; Oklahoma City; Memphis, Tenn.; and Milwaukee, Wis., among others.
Dec. 4, 2015, 6:30 PM
- Communications Workers of America employees at AT&T (T +3.1%) have ratified a four-year deal with AT&T Southeast wireline operations, the company says.
- Employees also ratified deals on two other contracts in the region, covering AT&T Billing and Utility Operations.
- The new deals replace ones that expired in August, and run now through Aug. 2019. They cover about 24,000 union-represented employees in nine states.
- Previously: AT&T, CWA come to terms on southeast wireline contracts (Oct. 20 2015)
Dec. 3, 2015, 8:04 PM
- Another week brought more promotions (at least in holiday shopping season) for U.S. wireless carriers fighting for customers.
- Verizon (VZ -0.8%) today offered 2 GB of bonus data for new phones added or upgraded on its larger data buckets (XL or XXL, in the company's clothing-size parlance). The deal is good just through Jan. 6.
- The data's shareable with devices on the plan, but tablets/connected devices alone aren't eligible to be added/upgraded for the deal.
- Meanwhile, T-Mobile's (TMUS -3.3%) target of the day is AT&T (T -1.4%); it's offering those customers an iPhone bargain (128 GB model for the price of the 16 GB model) and half off financed in-store accessories (focused on speakers, headphones, smartwatches, fitness trackers).
- T-Mobile says the iPhone deal represents a $200 value, given back via bill credit. Its deal is available Dec. 4 through Dec. 13.
Dec. 3, 2015, 7:40 PM
- An ongoing carriage dispute between Tegna (NYSE:TGNA) and AT&T (NYSE:T) means that U-verse and DirecTV subscribers could lose nearly 50 local stations at midnight.
- The increasingly common situation has some standard responses: Tegna stations are posting on their sites that "Unfortunately, in its recent merger with AT&T, DirecTV promised its Wall Street investors to cut $2 billion from its investment in programming like ours. It is our sincere hope that DirecTV puts its customers ahead of Wall Street."
- DirecTV says that it intends to keep Tegna stations in the lineup, but: "Tegna is threatening to block [the station] from reaching your home unless they receive a significant increase in their current fees -- just to let you keep watching shows that remain available for free over-the-air."
- Earlier, Tegna completed its acquisition of three Sander Media stations -- in Portland, Ore; Louisville, Ky.; and Tucson, Ariz. -- after getting FCC approval.
Dec. 2, 2015, 9:58 PM
- With a successful acquisition in the rear-view mirror, AT&T (NYSE:T) is getting closer to plans for a phase-out of the branding of DirecTV (NASDAQ:DTV) as it looks ahead to consolidating its video services.
- The company will drop the "Now part of the AT&T family" text, and add its globe logo to its U-verse service as well as next to the DirecTV name on those offerings.
- One day, though, it will likely consolidate in one name -- perhaps closer to 2017 or 2018, when AT&T plans to merge U-verse and DirecTV into one platform.
- Prior to the acquisition, DirecTV spent heavily on branding its name -- about $355M on measured media spent last year, compared to U-verse's $84M -- but branding expert Allen Adamson thinks there's only one possible outcome: “They’re going to win or lose based on AT&T."
Dec. 2, 2015, 9:42 PM
- While speculation about buyers for Yahoo's (NASDAQ:YHOO) core Internet business is focused on private equity, Yahoo's evolution as a media company means a number of media/telecom firms are in play for all or part of the business.
- A sale of the core business might not happen -- it's not the main purpose of Yahoo's meeting -- but on the other hand, a transaction would certainly value it at more than where it is locked up in Yahoo, which may be less than zero because of the investments in Alibaba and Yahoo Japan.
- Estimates vary widely on the Internet business' value, from just under $2B to as much as near $4B. Comcast (NASDAQ:CMCSA) could have room for that after it failed to acquire Time Warner Cable; it's been spreading out investments in a number of media and Internet companies this year, and it could lump in Yahoo's properties with its own Xfinity online video.
- Like Verizon (NYSE:VZ), another potential Yahoo Internet suitor, Comcast has also been shoring up its ad-tech bona fides with some 2015 acquisitions. Verizon could use Yahoo's data to present a better competitive face to Google and Facebook, though it would have redundancies to deal with.
- Other companies like News Corp. (NWS, NWSA) or Time Inc. (NYSE:TIME) may be more interested in some pieces of Yahoo's business rather than the whole. SunTrust analyst Robert Peck even considers AT&T (NYSE:T) and Walt Disney (NYSE:DIS) prospective buyers; Disney for tapping the data to market theme parts and movies, and AT&T trying to match up better against the Verizon/AOL combo.
- Previously: FT: P-E firms show interest in Yahoo's core business (updated) (Dec. 02 2015)
Dec. 2, 2015, 5:29 PM
- Industry veteran John Dwyer is moving over to take over Cricket Wireless (NYSE:T) as its new president.
- He's replacing Jennifer Van Buskirk, who's moving on to lead AT&T's Northeast Region.
- Dwyer had previously worked with AT&T Mobile and Business Solutions, as well as at Cingular Wireless and Pacific Bell Mobile Services. He'll oversee both everyday operations and long-term strategy at Cricket.
- The prepaid brand was back in the news yesterday after it committed to take over as sole advertiser on an episode of Family Guy on Turner's Adult Swim.
- Previously: Cricket taking sole advertiser spot on 'Family Guy' episode (Dec. 01 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.
AT&T Inc, through its subsidiaries and affiliates, provides wireless and wireline telecommunications services in the United States and internationally. The Company has three reportable segments: Wireless, Wireline, and Other.
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