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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. 16, 2015, 7:46 AM
- The latest 13F from Berkshire Hathaway (BRK.A, BRK.B) shows a new 59.3M share stake in AT&T (NYSE:T), and the GM stake taken up to 50M shares from 41M. At least part, if not all of the T stake is the result of shares received in the DirecTV merger.
- Phillips 66 (NYSE:PSX) is up to 61.5M shares from about 30M; Kraft Heinz (NASDAQ:KHC) 325.6M shares from zero; Suncor (NYSE:SU) 30M shares from 23.3M, John Malone (LMCK, LMCA) a total of about 24M shares from about 13M.
- Buffett trimmed his Wal-Mart (NYSE:WMT) position to 56.2M shares from 58.3M.
- AT&T +1.4% premarket
Nov. 13, 2015, 6:49 PM
- Along with a price hike for its unlimited wireless phone plans on Sunday, Verizon (VZ -1.3%) is bringing back activation fees, instituting a $20 charge for new lines of service.
- The carrier had waived the fees just a few months ago when it abandoned phone subsidies and service contracts; they were $40 at the time for customers who signed two-year deals.
- AT&T (T -1.1%) charges a $15 fee for devices sold through its installment program, or $45 for a two-year contract or purchased device.
- Verizon is raising the price of its unlimited data plan by $20/month on Sunday, a move in line with recent ones by its competitors. Sprint (S +0.7%) raised its own unlimited data plan by $10/month at the end of September.
- At least Verizon waited until after T-Mobile's (TMUS +2%) "Un-carrier X" event to drop the news; T-Mo's John Legere is fond of lambasting competitors for broad line activation charges, though every carrier has one somewhere.
Oct. 22, 2015, 4:22 PM
- AT&T (NYSE:T) is up 2.2% after hours following a third quarter where it beat EPS consensus, but missed revenue expectations that it yesterday called "inflated," and raised its earnings outlook for the full year.
- Revenues were up 19% Y/Y to $39.1B mainly due to the DirecTV acquisition. The company said it looked like analysts who expected $40.4B were counting the DirecTV deal for the full month of July, rather than from July 25 -- from where it said it was permitted to count revenue under GAAP.
- It pointed to solid gains in domestic wireless (2.5M net adds) and a positive move under DirecTV (26,000 domestic net adds), as well as 192K IP broadband net adds.
- Cash from operations came to $10.8B and free cash flow was $5.5B.
- For the full year, AT&T now sees EPS in the range of $2.68-$2.74, above consensus of $2.64, and free cash flow of $15B or better.
- Conference call coming at 4:30 p.m. ET.
- Previously: AT&T slips to session low, saying consensus for Q3 'inflated' (Oct. 21 2015)
Oct. 21, 2015, 3:38 PM
- AT&T (NYSE:T) shares -- up in the morning and flat at midday -- slipped 0.7% as the company says the consensus estimates for its Q3 are "inflated," according to Dow Jones.
- The company's point is that analysts are including DirecTV for the full month of July, while it will only report results from the satellite acquisition since July 25.
- Capital IQ consensus is expecting EPS of $0.68 on revenues of $40.39B for the quarter.
- The company is set to release earnings after the close tomorrow, with a 4:30 p.m. ET conference call scheduled.
- Updated: From AT&T's statement -- “Under GAAP we are only allowed to include revenue beginning July 25 so current consolidated revenue consensus estimates are inflated ... This is a one-time variance as analysts sort through some of the normal modeling of an acquisition ... It is clear many revenue estimates for DirecTV include the full month of July."
- Previously: Ahead of earnings, AT&T sets reporting segments, Venezuela writedown (Oct. 15 2015)
- Previously: AT&T details closure of DirecTV deal (Jul. 24 2015)
Oct. 16, 2015, 5:07 PM
- The FCC is probing four companies -- AT&T (T +1%), Verizon (VZ +0.1%), CenturyLink (CTL -0.7%) and Frontier Communications (FTR -1.9%) -- over terms they set for business broadband, the dedicated mission-critical lines that make everything from schools to ATMs work.
- That's a $20B market, and competitors including Sprint (NYSE:S), Level 3 (NYSE:LVLT) and Cogent (NASDAQ:CCOI), along with Amazon.com and others, are complaining about unfair lock-ups with large early termination fees.
- The FCC has found "potentially unjust and unreasonable practices" that rise to the level of an investigation. It says the four companies it's probing use plans with “a complicated web of all-or-nothing bundling, loyalty and term commitments, complex enforcing penalties” and other provisions, and asked them to respond by Dec. 18.
- In a mailed statement, industry group USTelecom (of which the four companies are members) says the investigation is a "rear-view mirror" approach. “Although the FCC says that it wants to be a data-driven agency, promote facilities-based competition, and incent broadband investment, it just can’t seem to get beyond its telephone-era mindset when it comes to regulating 20th century legacy services," says USTelecom President Walter McCormick.
Oct. 16, 2015, 10:33 AM
- A review of U.S. wireless operators has Nomura making AT&T (T +0.9%) and T-Mobile (TMUS +2.1%) its top picks, with a more subdued outlook on Verizon (VZ, flat) and Sprint (S -1.1%).
- The firm has Buy ratings on T and TMUS, and is Neutral on VZ and S.
- The companies' reactions to a modest growth future vary widely, says Jeffrey Kvaal. Verizon and AT&T are taking two radically different paths into video, while Sprint and T-Mobile go after share gain -- helped by the fact that the incumbents are unlikely to lower their prices.
- DirecTV synergies should more than offset some share loss at AT&T, and the firm faces modest video subscriber erosion, he says. Meanwhile, T-Mobile should be able to maintain share gains and EBITDA expansion with its aggressive approach.
- As for Verizon, "visibility beyond a sideways 2016 is limited," and Sprint continues to face a balance sheet strain though its improving network and pricing models have put it "on the brink of a true revival story."
- Price targets: For AT&T, $39 (closed yesterday at $33.49, 16.5% implied upside); for T-Mobile, $48 (closed yesterday at $39.94, 20% implied upside); for Verizon, $47 (closed yesterday at $44.67, 5% implied upside); for Sprint, $4 (closed yesterday at $4.27).
Oct. 14, 2015, 8:05 PM
- While Dish Network has taken a firm stance against the merger of Charter (CHTR -2.2%) and Time Warner Cable (TWC -0.9%), AT&T (NYSE:T) tells the FCC it's not opposed, but does want "careful scrutiny" on the subject of online video.
- The agency needs to "review the transaction carefully and consider the impact of cable consolidation and coordination on emerging competition," AT&T said in its letter.
- Dish Network yesterday filed a petition to deny the merger on public interest grounds.
- Charter's approach to TWC may be different than a failed attempt by Comcast, but "the Commission must ensure that the cable industry cannot use coordination to replicate the same mega-cable threat to competition." It pointed to John Malone, Charter's biggest shareholder, who has active interests in media and content firms.
- Previously: Dish Network files FCC petition to deny Charter-TWC merger (Oct. 13 2015)
- Previously: FCC review of Charter-TWC deal turns to broadband effects (Oct. 13 2015)
- Previously: NAB calls to suspend Charter-TWC deal review until broadcast rule reform (Oct. 12 2015)
Oct. 14, 2015, 3:04 PM
- T-Mobile (TMUS -1.6%) has brought back its 10 GB four-line family plan in what may be a harbinger of the wireless war heating up for the holidays.
- The plan -- $120/month for four lines, 10 GB of data -- is reminiscent of more aggressive plans ended this summer, from Verizon ($80 for 10 GB) and T-Mobile ($100 for 10 GB).
- Quieter AT&T (T -0.2%), meanwhile, "seems to be taking a more passive strategy, with a distinct focus on subscriber retention, ARPU (average revenue per user) preservation and setting the stage for growth and cross leverage opportunities as it integrates the DirecTV asset," says Barclays' Amir Rozwadowski.
- Including tablets, Rozwadowski is forecasting that Verizon (VZ -0.7%) will add 1.15M postpaid subscribers this quarter, followed by T-Mobile (1.07M), AT&T (300K) and Sprint (S -2.9%) with 270K.
- Verizon is first up among quarterly reporters next Tuesday.
Oct. 8, 2015, 3:13 PM
- AT&T (T +0.7%) and T-Mobile (TMUS -1.9%) have agreed to swap PCS and AWS-1 spectrum licenses around the U.S., according to FCC filings -- a move that should bring more service efficiency.
- The deal is pending FCC approval. Some major markets involved include Phoenix, Minneapolis, Boston, and Austin-San Antonio.
- The blocks are being swapped in identical amounts, so each carrier's total holdings will be unchanged -- but the ability to work in bigger contiguous blocks means greater efficiency for both, including a coveted 15+15 and 20+20 Wideband LTE offering that T-Mobile had hoped to provide.
Sep. 30, 2015, 5:15 PM
- Sprint (S +2.7%) is going to kick up the cost of its unlimited data plan, formerly $60/month, to $70/month, showing that unlimited data plans may be testing sustainability at the wireless carriers.
- That's still the best U.S. postpaid deal for that plan, and current customers will be grandfathered in at the $60/month rate. The price changes for new customers Oct. 16.
- T-Mobile (TMUS +0.6%) sells an unlimited data plan for $80/month, and AT&T (T +1.5%) and Verizon (VZ -0.1%) don't offer one.
- Sprint CEO Marcelo Claure has alluded to the strain of unlimited data, as well as wishes to bump customers toward the tiered data plans.
- Earlier, Sprint pursued limiting video download speeds, but has removed such restrictions as customers pushed back.
Sep. 22, 2015, 12:46 PM
- Traffic checks of U.S. wireless carriers by Pacific Crest's Michael Bowen show slowness for the leaders and some momentum for challengers.
- Verizon (VZ -1%) was "slow" and AT&T (T -0.9%) "somewhat weak" in the past month heading into a key iPhone announcement. Verizon saw a lower amount of pre-orders for the iPhone and was coming off a data plan re-sizing; AT&T is lower-key about pushing phone upgrades, though tablet promotions are going well and customers are responding to DirecTV bundles.
- Meanwhile, promotions are bearing fruit at T-Mobile (TMUS -1.9%) and Sprint (S -1%). T-Mobile traffic was "strong," Bowen says, with employees optimistic about iPhone pre-orders and new financing plans. Meanwhile, most Sprint stores met or beat August goals and expect the same for September, as the "iPhone forever" leasing plan is showing strong demand.
Sep. 15, 2015, 4:49 PM
- AT&T (T +0.9%) and Verizon (VZ +1.6%) have both said they're amping up their footprint in Best Buy stores, meaning more products and more service.
- Verizon's begun its expansion already, and plans to have 100 locations done by month's end. The areas are "geared to showcase connected lifestyles – such as wearable tech, computing on the go and connected home – and the devices and plans that make these lifestyles a reality," said Verizon's John Colaiuti.
- Both companies plan to have expanded their new approaches to all 250 stores by the end of 2015.
- Meanwhile, in a review of U.S. wireless firms, Morgan Stanley has reiterated its Overweight rating on Verizon, and an Equal Weight rating on AT&T.
Sep. 2, 2015, 11:39 AM
- Needing a good network to pursue further growth in Mexico, but "light-years away from it," Telefonica (TEF -2.2%) says it's open to deals with competitors there, including America Movil (AMX -0.1%) and AT&T (T +0.6%).
- Technical improvements could hinge on a possible deal with America Movil's tower spinoff Telesites, if it makes its infrastructure available. Combined creation of infrastructure is also a possibility.
- AT&T has been working on its deal to rent towers from Telesites, which holds 11,000 towers in the country.
- Telefonica has an "obligation" to explore possible deals, said COO Jose Maria Alvarez-Pallete. “We still have a lot of work to do in Mexico, but for the first time we have elements” for growth.
- Previously: Telefonica: Brazil recession 'won't change our plans' (Aug. 31 2015)
Sep. 2, 2015, 7:58 AM
- The 11% decline from a late June high provides a near-term value opportunity, say Goldman Sachs, upgrading AT&T (NYSE:T) to Buy.
- The current price doesn't reflect improved dividend coverage with upside potential from DTV merger-related synergies, breathing room in wireless after Verizon backed off some of its aggressive promotions, and too-low consensus EPS estimates for 2016 (h/t Dominic Chu).
- Shares +1.5% premarket
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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