Thu, Jun. 4, 10:40 AM
- Dish Network (DISH +5.9%) and T-Mobile (TMUS +4.6%) are on the rise this morning -- and Sprint (NYSE:S) is down 4.2% -- in the wake of reports that Dish and T-Mobile are talking merger.
- It's not the first time the two have been linked by observers due to strategic sense: T-Mobile needs spectrum and Dish Network has it, and Dish needs growth and broadband service that T-Mobile could provide as AT&T and DirecTV near the closing of their merger. (Though the broadband isn't a perfect fit.)
- T-Mobile has been amassing wireless spectrum, and while Dish's Charlie Ergen has been circumspect as recently as this week about what the company would do with it, one thing he's made clear is that the company didn't plan to start a wireless network from scratch.
- A deal may take some time in coming, in part because of its size -- both companies have $30B-plus market caps -- and the fact that the FCC prohibits strategic talks during spectrum auctions, leaving a window before the broadcast incentive auction for discussions.
- Sprint, meanwhile, is trading down on fears that it could be left out in the cold, having a potential merger with T-Mobile dematerialize last year, and subscriber momentum that is likely to see it passed by T-Mo to fall to the fourth-largest carrier in the U.S., with a cash burn problem to boot.
Thu, Jun. 4, 9:14 AM
Wed, Jun. 3, 10:06 PM
- Dish Network (NASDAQ:DISH) and T-Mobile (NYSE:TMUS) are in talks to merge, The Wall Street Journal is reporting -- in what would be the latest chess move in a huge consolidation game playing out across media and telecom.
- The two aren't far apart about the resulting company's look: Dish's Charlie Ergen would become chairman and T-Mobile's John Legere the CEO.
- Talks are in the "formative stage" and so price and cash/stock mix are undetermined.
- Previously: T-Mobile -0.6% as Macquarie downgrades on M&A skepticism (May. 27 2015)
- Previously: T-Mobile keeps fanning Dish partnership flames (Mar. 06 2015)
Tue, Jun. 2, 6:46 PM
- Mogul John Malone floated an interesting idea today: Forget Sprint and T-Mobile -- the wireless industry could get its third major alternative to Verizon and AT&T (NYSE:T) with the merger of Charter Communications (CHTR -1.6%) and Time Warner Cable (TWC -0.9%).
- Malone was speaking at his various Liberty companies' annual meetings and noted that in 2012, the cable consortium SpectrumCo got an option to participate in a wireless MVNO service with Verizon (NYSE:VZ) after the wireless firm bought $3.9B in frequencies.
- Charter wasn't in SpectrumCo then, but merger partners TWC and Bright House are. “The concept that Comcast, a greatly enlarged Charter and Cox could together offer a WiFi-optimized connectivity service with a default to a Verizon MVNO is an interesting concept," Malone said.
- He thinks "there's very little dirty underwear" left to be found in a regulatory review of Charter-TWC after the past year's scrutiny.
- Also of interest regarding Charter capex and the dividend: “Everybody's going to say, ‘Oh he’s spending too much capital,’ but I think the end result with be worth it ... To a large degree we’re betting on Tom Rutledge and his team to wake up a sleepy cable company that was treading water in all honesty for a while and trying to satisfy shareholder pressures with buybacks and dividends as opposed to putting the money into having a competitive service offering.”
- Malone company shares today: LMCA -0.1%; LMCB flat; LMCK flat; LTRPA -0.9%; LTRPB +2.2%; QVCA +0.8%; LBRDA +0.1%; OTCQB:LBRDB flat; LBRDK -0.1%.
Thu, May 28, 3:50 PM
- The FCC is close to rejecting T-Mobile's (TMUS -0.9%) push for more spectrum set-asides in next year's government auction -- expected to be the biggest yet -- and siding with market leaders AT&T (T -0.5%) and Verizon (NYSE:VZ), Reuters reports.
- The agency already has some set-aside planned, but T-Mobile has been aggressively lobbying for more (40 MHz of an expected 70-80 MHz reserved for smaller carriers like T-Mobile and Sprint (S -1.6%), rather than 30 MHz).
- Sources tell Reuters the panel's thinking is that an adequate amount is being set aside, and that frequent swing vote Jessica Rosenworcel looks disinclined to rethink the current plan.
- Previously: Analyst: Risky to bend auction rules too much for Sprint, T-Mobile (May. 14 2015)
- Previously: T-Mobile, Sprint gambling on increasing spectrum set-aside (Apr. 09 2015)
Wed, May 27, 11:13 AM
- T-Mobile (NYSE:TMUS) is off 0.6% as Macquarie downgrades shares to Neutral, from Outperform, on concerns that it could get diluted by a share sale from its parent Deutsche Telekom (OTCQX:DTEGY) if timely mergers don't come around.
- One speculated partner is Dish Network (NASDAQ:DISH), which has been gathering wireless spectrum despite offering no mobile services.
- T-Mobile's hit Macquarie's target price of $38, the analysts note, and while a move up from around $32 seems to be based on M&A speculation, "We have been down this road before with TMUS and recommend investors take profits at current levels."
- "We feel the risk/reward is now fairly balanced," says Macquarie's Kevin Smithen, "with a potential DISH bid at $41-$42 fully priced into the stock when adjusting for a lengthy regulatory approval process and potentially adverse reaction to Dish Networks' share price on a merger announcement."
- Smithen also pointed out T-Mobile has done "two dilutive equity-convert financings over the past 18 months at low prices, with Deutsche Telekom not participating in either offering," so if a Dish tie-up doesn't pan out, DT may not wait around for another go with Sprint.
Thu, May 21, 5:11 AM
- Deutsche Telkom (OTCQX:DTEGY) will consider any partner that can improve profitability of its U.S. operations, its chief executive said at the company's annual shareholders meeting.
- "It is our duty to go on improving the return on T-Mobile (NYSE:TMUS). If we find a partner who will help us to do so, we will obviously consider it," Tim Hoettges announced.
- Deutsche Telekom last year tried to sell T-Mobile to Sprint, but the bid was dropped after regulatory resistance.
Thu, May 14, 7:00 PM
- Bigger set-asides of spectrum for Sprint (NYSE:S) and T-Mobile (NYSE:TMUS) would risk ruining the upcoming broadcast incentive auction, says Recon Analytics' Roger Entner.
- Smaller competitors have asked for rules that limit how much spectrum giants AT&T (NYSE:T) and Verizon (NYSE:VZ) could bid in, but that risks ire from television broadcasters who will be on the receiving end of the bids, he says: "The fewer the restrictions, the smaller the set-asides, the more revenue will be generated during the auction."
- T-Mobile and Sprint have enough spectrum, so he suggests a better idea is a 20 MHz set-aside for small rural operators. The FCC is reserving 30 MHz of an expected 70-80 MHz; opponents want a 40 MHz set-aside.
Fri, May 8, 10:52 PM
- T-Mobile (NYSE:TMUS) and BlackBerry (NASDAQ:BBRY) had a public falling-out over the past year and a half -- but that was before the Un-Carrier got business religion. So the two are partnering again, with the carrier launching a BlackBerry Classic beginning next week.
- The device will sell for $440. While T-Mobile continued to support BlackBerry devices, it hasn't sold one in almost two years.
- BlackBerry CEO John Chen was there when T-Mobile started inducing customers to ditch their BlackBerrys for iPhones, and when he cut off their licensing agreement last April, he said "Regretfully, at this time, our strategies are not complementary." So what's the new stance?
- "A year ago, I couldn't have imagined this. But if being at the helm of BlackBerry has taught me anything, it's that a lot can change in a year," he writes. "And that two strong-willed executives who say what we think ... can meet on common ground."
- T-Mobile CEO Legere, for his part, took off his pink gear -- temporarily -- to dress in basic black.
- Previously: A shaky marriage officially ends: BlackBerry won't renew T-Mobile deal (Apr. 02 2014)
Tue, Apr. 28, 8:42 PM
- During T-Mobile's (NYSE:TMUS) Q1 earnings call, colorful CEO John Legere took another opportunity to hint at the tie-up that increasingly seems to be in the company's future: with a cableco that offers broadband.
- Just days after FCC opposition killed the Comcast-TWC merger, Legere pointed to the need to counterbalance AT&T (NYSE:T) and Verizon (NYSE:VZ), which combine wireless service with broadband offerings and even TV business.
- Regulators seem to be opposed to cable-cable deals, and wireless-wireless deals like aborted plans for a Sprint (NYSE:S) merger with T-Mobile -- but Legere notes a natural fit may occur across industries: "The tangential players are touching mobile players in a way that makes a go-to-market strategy."
- Analyst Craig Moffett urges caution, as regulators might already see the two industries as competition. "Wireless broadband is clearly the FCC's best hope for a counter to cable's wired advantage. They might decide that they aren't ready to allow a combination like that."
- Possible cable suitors: CMCSA, TWC, CHTR, CVC
- After earnings today, TMUS -0.3%.
- Related: T-Mobile US (TMUS) Q1 2015 Results - Earnings Call Transcript (Apr. 28 2015)
- Previously: T-Mobile grows Q1 revenues 13%, adds 1.8M subscribers (Apr. 28 2015)
- Previously: T-Mobile keeps fanning Dish partnership flames (Mar. 06 2015)
Tue, Apr. 28, 9:47 AM
- T-Mobile (NYSE:TMUS) opened 0.2% to the upside after posting revenue that grew 13% and beat expectations and logged its eighth straight quarter of 1M net subscriber additions.
- Adjusted EBITDA of $1.388B (up 27.6%) missed expectations of $1.397B.
- In subscriber numbers, the company posted 1.8M total net subscriber adds (1.1M branded postpaid net adds, 1M branded postpaid phone net adds). The company's expecting to capture all industry subscriber growth for Q1. Branded postpaid churn is down 17 bps to 1.3% (down 43 bps from Q4).
- Branded postpaid ARPU was down 3.8% sequentially to $46.43. Excluding a net revenue deferral tied to Data Stash, it declined 1.2% sequentially and 5.5% from the prior year.
- The company's raising its subscriber guidance for 2015, to 3.5M branded postpaid net adds (up from 3M). It's keeping its target for adjusted EBITDA of $6.8B-$7.2B, in line with expectations.
- Earnings call livestream at 10 a.m. ET.
- Q1 press release
Tue, Apr. 28, 7:34 AM
Mon, Apr. 27, 7:34 PM
- T-Mobile (NYSE:TMUS) reports earnings Tuesday morning and it's likely going to be the only major U.S. wireless firm to actually add postpaid subscribers, Goldman Sachs says.
- Revenues are expected to rise 12%, a contrast to AT&T and Verizon, where wireless service revenues dropped in Q1.
- As necessary as it is, the sub growth could "pressure Q1 EBITDA and EBITDA margins," says Evercore's Jonathan Schildkraut. T-Mobile had forecast postpaid subscriber adds of 2.2M-3.2M.
- Consensus expectations have the company losing $0.04/share (losing $0.10/share on a GAAP basis) on $7.7B in revenues. EBITDA is expected at $1.4B.
Mon, Apr. 27, 6:11 PM
- A few months after Dish Network (NASDAQ:DISH) made the surprise bids in the FCC's AWS-3 wireless spectrum auction, the FCC may reject the company's $3.3B in small-business discounts it sought, The Wall Street Journal reports.
- The discounts have been unapproved since the auction. Competing bidders including T-Mobile (NYSE:TMUS), AT&T (NYSE:T) and Verizon (NYSE:VZ) -- along with FCC commissioner Ajit Pai -- raised loud complaints about Dish's use of two designated entities, SNR Wireless and Northstar Wireless, to bid for $13.3B in spectrum but pay only $10B.
- FCC Chairman Tom Wheeler reportedly told his staff after the auction that something didn't "smell right." Both Dish Network and its partner in Northstar Wireless stuck up for the practice.
- If the discounts are rejected, the small companies would have to pay back the discounts or risk losing the licenses.
Fri, Apr. 24, 8:34 AM
- After a late Thursday board meeting, Comcast (NASDAQ:CMCSA) has confirmed it's dropping its $45B plan to acquire Time Warner Cable (NYSE:TWC) -- a stunning reversal of a 15-month plan, which got less stunning as hurdles began to mount in recent weeks.
- "Today, we move on," says Comcast CEO Brian Roberts. "Of course, we would have liked to bring our great products to new cities, but we structured this deal so that if the government didn't agree, we could walk away." It's a cheap walk-away for Comcast, which had no breakup fee in the deal.
- What next? Consolidation is still likely in a deeply uncompetitive industry. Other companies are now officially front and center in pursuit of TWC, notably John Malone's Charter Communications (NASDAQ:CHTR), which could re-launch its own failed effort. CHTR-TWC would have 16.5M broadband subscribers together, less than Comcast's 22M.
- Charter's deal with Comcast aimed at divestment and easing the Comcast-TWC transaction also blows up. What about Charter's deal to acquire Bright House?
- As for Comcast, it could take its stored-up momentum outside of cable -- to someone like Netflix (NASDAQ:NFLX), as BTIG's Rich Greenfield hints? Or to a telecom like T-Mobile (NYSE:TMUS)?
- Updated: Time Warner Cable statement. "We have always believed that Time Warner Cable is a one-of-a-kind asset," says Chairman and CEO Robert D. Marcus. "We are strong and getting stronger."
Wed, Apr. 22, 8:29 PM
- Google's Project Fi wireless MVNO (mobile virtual network operator) service will piggyback on the networks of Sprint (S +2%) and T-Mobile (TMUS +2.2%) when it's not using Wi-Fi to route calls and data -- and while traffic is better than "no traffic," analysts at Cowen and Evercore say it won't mean much benefit for the two wireless firms.
- Colby Synesael of Cowen says that financial gains will be limited for the two (and for Google): It's all about Google trying to shape the market in ways that might eventually pay off. The offer is "compelling" on price and technology and could make a monetary difference if device support grows, but it's more likely about carriers making Fi's practices mainstream, he says.
- On price, the data giveback and international aspects of Fi could pressure AT&T (NYSE:T), Sprint and Verizon (NYSE:VZ) to follow suit, Synesael writes.
- Evercore's Jonathan Schildkraut found the announcement in line with expectations, though "we also would not rule out a potential relationship between GOOG and the MSOs' Wi-Fi networks as another way to dis-intermediate the traditional carrier," he writes. "Not as Bad as Expected for T and VZ. We view the higher than expected toll to get on the network ($20) as likely better for carriers than anticipated."
- Previously: Google launches Fi mobile service - $20/month for voice/text, $10 per GB (Apr. 22 2015)
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T-Mobile US Inc provideswireless communication servicesin the postpaid, prepaid, and wholesale markets.The Company's products and services includevoice, messaging, data services,wireless devices, smartphones and other mobile communication devices.
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