T-Mobile Momentum Remains: Accumulate Before Next Leg Higher
Alpha Gen Capital
Alpha Gen Capital
T-Mobile's Reinvigorated Brand And Momentum Accelerates
Alpha Gen Capital
Alpha Gen Capital
T-Mobile: On The Path To Threatening AT&T And Verizon For Dominance In Wireless
Alpha Gen Capital • 10 Comments
Alpha Gen Capital • 10 Comments
Oct. 27, 2015, 9:19 AM
- T-Mobile (NASDAQ:TMUS) is off 1.7% premarket after missing expectations with Q3 results despite more solid subscriber growth.
- The company swung to a profit with net income of $138M that came to $0.15/share and revenues of $7.85B missed by $440M despite growing nearly 7%. Service revenues were up 11% along with the customer growth. EBITDA of $1.9B grew 42% but missed an expected $1.93B.
- The company yet again raised guidance for subscribers after 2.3M net customer adds. It added 1.1M branded postpaid net subscribers (843K branded postpaid phone net adds), along with 595K branded prepaid net adds. Branded postpaid phone churn was down 18 basis points to 1.46%.
- It's guiding to add 3.8M-4.2M postpaid users for the full year, up from previous guidance for 3.4M-3.9M.
- As with other companies in the price war, branded postpaid average revenue per user was under pressure, falling 3.7% Y/Y to $47.99.
- Conference call to come at 10 a.m. ET (YouTube, webcast)
Oct. 27, 2015, 7:42 AM
- T-Mobile US (NASDAQ:TMUS): Q3 EPS of $0.15 may not be comparable to consensus of $0.30.
- Revenue of $7.85B (+6.8% Y/Y) misses by $440M.
Oct. 26, 2015, 5:30 PM
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Oct. 21, 2015, 4:18 PM
- Comcast (CMCSA -0.7%) is inching toward introducing its own wireless service, triggering part of a 2012 airwaves deal that lets it resell Verizon's (NYSE:VZ) service, Bloomberg reports.
- Verizon CFO Fran Shammo said during the company's earnings call yesterday that unnamed cable companies had said they'd execute their right to resell Verizon airwaves as part of the deal where Verizon bought spectrum from a cable consortium.
- Bloomberg says that Comcast plans a hybrid cellular/Wi-Fi service, not unlike Google's Project Fi and which would draw on Comcast's network of Wi-Fi hotspots that may be 10M strong.
- With notification of Verizon, Comcast could start a market trial within six months and offer it commercially by this time next year.
- Good for T-Mobile (TMUS -1.2%) either way? The carrier comes up in rumors about a Comcast merger -- though Comcast denied them earlier this year -- but in any cast, a Comcast entry would press the big two of AT&T (NYSE:T) and Verizon more. “This will be bad for the carriers, with the possible exception of T-Mobile, and good for cable,” says New Street Research's Jonathan Chaplin.
- And T-Mobile chief John Legere has been not-too-subtly dropping lines about a merger with his company: "You really believe that the Comcast future in wireless is to be an MVNO with Verizon? I mean, give me a break."
- Previously: Legere: T-Mobile will bid in auction; Verizon video a 'debacle' (Sep. 18 2015)
- Previously: Comcast source denies interest in T-Mobile purchase (Jun. 17 2015)
Oct. 20, 2015, 11:57 AM
- Deutsche Telekom (OTCQX:DTEGY +2.8%) is working with Credit Suisse on a possible sale of its Dutch unit, T-Mobile Netherlands, that could bring up to €5B ($5.7B), Bloomberg reports.
- That would be 7-8 times the unit's EBITDA, which last year was €630M on revenues of €1.55B.
- Deutsche Telekom gets more than two-thirds of revenues from Germany and the U.S., so a sale of its Dutch unit could bring funds to cut debt ahead of what could be an aggressive move for spectrum by T-Mobile U.S. (TMUS -1.2%) in the spring.
- In an acquisition-rich environment, bidders could include John Malone and Liberty Global (LBTYA -1.4%) as well as private equity. Liberty Global bought Belgium's Base from KPN for $1.4B in April.
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. 16, 2015, 9:43 AM
- T-Mobile (NYSE:TMUS) is transferring its listing from the NYSE to Nasdaq effective after the close Oct. 26.
- Its symbol will continue to be TMUS for the common stock, and TMUSP for preferred stock.
- T-Mobile expects the move will be seamless for current shareholders.
- Shares are up 1.6% today; YTD the stock has appreciated 50.5%.
- Previously: T-Mobile in pole position as smaller carriers start bailing out of auction (Oct. 15 2015)
- Previously: T-Mobile brings back popular family-plan promotion (Oct. 14 2015)
Oct. 15, 2015, 7:59 PM
- With Sprint skipping out of the next spectrum auction, and smaller wireless carriers likely to do the same, it's T-Mobile (NYSE:TMUS) that could see its way clear to amassing some valuable airwaves and strengthening its position against the big two, Marguerite Reardon says.
- The smaller carriers lobbied hard for reserved spectrum in the auction, and now they're standing aside, which might give T-Mobile the go-ahead to scoop it up. There will be 30 MHz of spectrum set aside, less than the 40 MHz that T-Mobile and Sprint were lobbying for.
- Smaller carriers, particularly rural operators, may not be able to tie up millions of dollars for the few years it would take for the airwaves to transition from broadcasters to wireless use, she says.
- The prospect of surprise bidders still looms -- particularly what will happen with Dish Network (NASDAQ:DISH), which is playing its cards (as usual) close to the chest. Cable operators might make their move as well.
- Related: With everyone paid up, the FCC has granted all the AWS-3 licenses.
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.
Oct. 7, 2015, 4:06 PM
- A number of lawsuits are hitting T-Mobile (TMUS -0.6%) and Experian (OTCQX:EXPGY +1.9%) after a data breach at Experian exposed personal data of 15M people, including T-Mobile customers and applicants.
- At least five lawsuits against the two are seeking class-action status, and a sixth lawsuit is targeting only Experian.
- Intruders took data including names, addresses, contact numbers and social security numbers in the breach, which was revealed last Thursday, and T-Mobile said people who submitted credit applications from Sept. 1, 2013 to Sept. 16, 2015, were affected.
- One complaint notes the personal data is already for sale online.
Oct. 2, 2015, 2:59 PM
- AT&T (T -0.4%) has a letter in to the FCC noting that while it awaits a waiver from the FCC to offer Wi-Fi calling services -- a more notable service deficiency with the advent of Apple's iOS9 -- Sprint (S +4%) and T-Mobile (TMUS +0.1%), along with Google's Project Fi, are offering such services without such a waiver.
- AT&T had planned to offer Wi-Fi calling in September, but filed a waiver related to TTY support regulations (as such assistance for the hearing- and speech-impaired can be tricky to provide over some Wi-Fi). The agency hasn't provided such a waiver yet, "even while our competitors provide those services in defiance of the commission's rules," AT&T writes.
- The carrier is pressing for a granted waiver "without further delay."
Oct. 1, 2015, 5:28 PM
- T-Mobile (NYSE:TMUS) CFO Braxton Carter backed up previous statements by CEO John Legere, saying the company has enough money to get spectrum in next year's broadcast incentive auction sufficient to cover the rest of the country in LTE.
- That will cost $1B to $1.5B, Carter says. "We're very optimistic that we can do very well; at a minimum what we want to do is complete the U.S. low-band footprint."
- The company will be disciplined, though, as "We don't have the balance sheet" of AT&T and Verizon. It'll also look at getting more 700 MHz spectrum to go along with 600 MHz spectrum in the auction.
- He also thinks "brilliant strategist" Charlie Ergen of Dish Network "will play in the auction, but he's not going to have the firepower that he had before" after a $3.3B discount was denied.
- Meanwhile, T-Mobile said that a data breach at Experian (OTCQX:EXPGY) has exposed credit applications of about 15M people, including applicants for T-Mobile services, over the past two years. The records included encrypted fields with SSN and government ID numbers as well as other credit information.
- Previously: WSJ: Dish affiliates returning some auctioned wireless spectrum (Oct. 01 2015)
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. 28, 2015, 7:55 PM
- Sprint (S -7.3%) confirmed that (as expected) it won't take part in the FCC's broadcast incentive auction for wireless spectrum next March -- a move that should suit T-Mobile's (NYSE:TMUS) John Legere just fine, as he's vocally argued for low-band access.
- "Sprint has the spectrum it needs to deploy its network architecture of the future," said CEO Marcelo Claure in his statement. The company's already densifying the network and pursuing techniques like carrier aggregation to unlock potential in its 2.5 GHz position.
- The auction, for prized low-band airwaves that will help with indoor penetration and rural areas, won't be cheap -- so skipping it should make a major difference to cash burn, a vital issue for Sprint.
- After an August run to $5.19, fueled by SoftBank's share purchases, shares are back under $4, at $3.98 (down 21.5% since Aug. 28).
- Previously: Sprint's Claure: Turnaround is taking hold with customer, network growth (Sep. 17 2015)
- Previously: Wells Fargo: T-Mobile, Sprint get edge with new iPhone financing approach (Sep. 10 2015)
Sep. 24, 2015, 7:24 PM
- With wireless carriers fighting over new iPhone deals seemingly every few hours, Verizon (NYSE:VZ) is responding to the scrum with Sprint and T-Mobile and now offering customers a program to upgrade their iPhone annually.
- So long as users have paid off at least half their device's cost and turn in their current device, they'll be eligible to upgrade each year without waiting for their contract to end.
- "If you’re not interested in upgrading, you still have the option to pay your phone off in 24 low monthly payments," Verizon says in its release, warning about "surprise balloon payments" with competitors.
- Customers who pre-ordered the iPhone 6s or 6s Plus under Verizon's Device Payment installment option are automatically enrolled.
- Earlier, T-Mobile (NYSE:TMUS) introduced an iPhone lease plan as low as $5/month, and Sprint (NYSE:S) responded with an all-night number crunch to create today's $1/month lease plan.
- In after-hours action: VZ +0.1%; S -0.2%; TMUS unchanged.
T-Mobile US, Inc. provides mobile communications services under the T-Mobile, MetroPCS, and GoSmart brands in the U.S., Puerto Rico, and the U.S. Virgin Islands. It offers postpaid and prepaid wireless voice, messaging and data services, and wholesale wireless services. The company also provides... More
Industry: Wireless Communications
Country: United States
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