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Today, 2:35 PM
- Sprint (S +7.2%) is partnering with Niantic to turn its more than 10.5K U.S. locations into PokeStops and Gyms, beginning Dec. 12.
- As for sector consolidation, yesterday's meeting between Softbank's chief and Trump, and Softbank's (OTCPK:SFTBY +5.7%) promised $50B U.S. investment could foreshadow a Sprint/T-Mobile (TMUS +3.9%) merger, says Oppenheimer's Tim Horan.
- The objective of a tie-up between the two, says Horan, would be "quad-play offering" to attack cable's "triple-play." T-Mobile, he says, is the "king maker" in the process thanks to its combined spectrum portfolio.
- Look for Comcast (CMCSA +0.6%) or Charter (CHTR +3%) to make competing bids, but they'd have to be big numbers to win out over Sprint.
- Source: Bloomberg
Wed, Nov. 16, 6:56 PM
- With consolidation fever sweeping the media and telecom industries, Deutsche Telekom (OTCQX:DTEGY -0.4%) is playing coy about selling its interest in T-Mobile U.S. (TMUS -1.4%) -- even if T-Mobile chief John Legere has enthusiastically talked up the idea of partnering up in quarterly calls.
- "We are not in the mood of selling the business. We are not in the mood of: 'Oh where is the partner we need?' " CEO Tim Hoettges told the Morgan Stanley conference in Barcelona.
- But he's keeping an eye on the Trump administration as it takes shape and looking for any regulatory changes. The company's last two attempts to sell T-Mobile got tied up by government watchdogs, and since then T-Mobile has pulled off a recovery: It's almost as big as DT's German business.
- "All of this is helping us to be open and try to improve our situation," he says. "I am not afraid about whether a (pure) mobile player can survive in this environment. If there are any options, we are going to consider."
Tue, Nov. 15, 4:43 PM
- Conversations about Sprint (S +3.2%) and T-Mobile (TMUS +1%) getting together in a merger, to combine their struggles against the top two wireless providers, are running into one problem, according to Citi: The two upstarts aren't struggling as much as before.
- Operational rebounds at Sprint and T-Mobile will make for a harder case before regulators who would have to be persuaded to sign off, the firm says. An attempt to merge in 2014 was denied by authorities.
- "We think Sprint and T-Mobile are more likely than not to reconsider a merger scenario, but the (TV spectrum) auction, other strategic options, and regulatory complexities may slow down any attempt during 2017," writes analyst Michael Rollins.
- T-Mobile led the big four carriers with 851,000 net adds in branded postpaid phones, and added 684,000 net subs in branded prepaid to boot. Sprint, meanwhile, added 347,000 net postpaid phone subs in a rebound quarter.
- "We come back to an essential issue that we believe hurt the companies' prospects for consolidation in the last go-around -- if it's not broken, why fix it?" Rollins says.
Thu, Nov. 10, 12:11 PM
- With telecom consolidation making up one of the post-election storylines in the U.S. -- in particular, whether a new administration changes the calculus for a merger at U.S. unit T-Mobile (NASDAQ:TMUS) -- Deutsche Telekom (OTCQX:DTEGY -2%) says it's too early to tell whether a Trump administration would be positive for M&A.
- "The market reacted heavily," said DT CEO Tim Hoettges after T-Mobile stock hit an all-time high (it's now backed off 2.8%).
- A deal to combine T-Mobile with Sprint (S -0.9%) was nixed by regulators two years ago.
- DT will keep an open mind, and believes a U.S. mobile merger would be "huge," but "It is just far too early to speculate what the new administration would look like," Hoettges says.
- Earlier, Deutsche Telekom met expectations with its Q3 results largely due to performance at T-Mobile.
Wed, Nov. 9, 11:34 AM
- While Time Warner is trading lower as investors digest a slimmer chance of a buyout by AT&T under a Trump administration, Sprint (NYSE:S) -- a company long thought to again become a merger prospect after a change in the White House -- is up 12.5% and hitting two-year highs today.
- Its oft-discussed merger matchup partner, T-Mobile (NASDAQ:TMUS) is up 3.8%.
- Meanwhile, changes are likely coming to the FCC, Wells Fargo argues: It will at least be more conservative, if not working under new leadership soon; expecting Chairman Tom Wheeler to stay a full term is "no longer realistic."
- "If the rhetoric of those surrounding Trump’s campaign rings true, we can expect a Republican FCC to make a big push to roll back some of the regulations put in place under President Obama such as the Title II/Net Neutrality rules," writes analyst Jennifer Fritzsche. "There may also be a push to roll back some or all of what the FCC just did on privacy."
- "It’s unclear whether Chairman Wheeler will be able to act on the open items related to Business Data Services or set top box reform before he departs and if he does not, some suggest a Republican FCC will reverse course on these two items. There is also a big question on how a Trump FCC will view transactions including the recently announced T/TWX merger and the LVLT/CTL transaction."
- LVLT +0.4%; CTL +0.5%. TWX -1%. Names tied to net neutrality: T, VZ, CMCSA, CHTR, OTCPK:ATCEY, CTL, FTR, CCOI, DISH.
Wed, Oct. 26, 3:20 PM
- With AT&T beginning a long journey to acquire Time Warner, is T-Mobile (TMUS +0.7%) the next big acquisition target in the media/telecom space? Analysts are talking up the carrier's prospects after it logged another successful quarter.
- For its part, T-Mobile has been and still is "very interested" in strategic options, COO Mike Sievert says.
- "The takeout target over the next 12 months has got to be T-Mobile," says New Street Research's Spencer Kurn, noting potential suitors in Comcast (NASDAQ:CMCSA) -- which is exercising a clause with Verizon to launch MVNO service -- as well as Dish Network (NASDAQ:DISH) and America Movil (NYSE:AMX).
- Dish has a lot of spectrum but no wireless business -- and it's lost a potential buyer in AT&T, which now has its hands full with Time Warner, notes BTIG's Walt Piecyk.
- Rival Sprint (S -1.8%) could be a takeover target as well, as CEO Marcelo Claure noted "we've had a lot of bankers placing more calls than usual over the weekend" in yesterday's earnings call.
Wed, Aug. 17, 1:32 PM
- Detailing its report on new merger chatter around Sprint (S -1.5%) and T-Mobile (TMUS +0.5%), Bloomberg notes that Masayoshi Son -- the mogul at the head of SoftBank (OTCPK:SFTBY -2.3%) who abandoned a merger bid before -- will likely try the combination again if he thinks a new head of the FCC is amenable.
- That agency head holds key power, with the threat of putting such a proposed deal into an administrative hearing, which would postpone action indefinitely. A similar threat caused Comcast to drop its proposed takeover of Time Warner Cable. Son has indicated he would legally challenge any Justice Dept. opposition.
- Shares of Sprint and T-Mobile made positive moves of 3% and 2.5% respectively in the span of a few minutes before pulling back.
- Son could pursue the argument that Sprint will never be a legitimate fourth competitor in the market alone, but that may not fly, says Public Knowledge's Gene Kimmelman. “You would need to see a pretty significant reversal of fortunes across both companies -- Sprint and T-Mobile -- for the antitrust enforcers to change their views ... You’d have to see a clear demonstration of a company in jeopardy.”
- A Trump administration, though, could mean "a whole new ball game" with companies like Sprint rolling the dice, Kimmelman says.
- “The rule of thumb is that Democratic administrations will allow an industry to consolidate down to four players, and Republicans will let an industry go down to three,” says analyst Roger Entner. “Masa has to hope that the next president’s name is Donald."
- Talks between the two companies are forbidden as of now, with the FCC's broadcast incentive spectrum auction going on (and looking more likely to run into 2017).
Wed, Aug. 17, 12:44 PM
- Sprint (NYSE:S), down nearly 3% on the day, made a midday spike back to the flat line on yet another resurgence of merger rumors -- though, just like that, the spike is gone and Sprint is off 1.8% again.
- Bloomberg is saying that Masayoshi Son of Sprint owner SoftBank (OTCPK:SFTBY) is still "holding out hope" to combine Sprint with T-Mobile (TMUS -0.2%) -- which also spiked into positive ground before an immediate pullback.
- Conventional wisdom has it that the previous outbreaks of Sprint/T-Mobile rumors were put to rest with no possibility of a combination at least until a new U.S. presidential administration.
Tue, Mar. 1, 9:38 AM
- T-Mobile (NASDAQ:TMUS) is up 1.2% in early going after Deutsche Telekom (OTCQX:DTEGY) reportedly put any sale of its U.S. arm on ice, with a U.S. election on the way and spectrum auction dead period dead ahead.
- Participants in the FCC's broadcast incentive airwaves auction, set to begin at the end of the month, won't be allowed to talk partnerships or mergers during bidding, which could last for months.
- The German giant will wait for a more favorable environment before looking at another sale.
- After a previous attempt to merge T-Mobile and Sprint (NYSE:S) went awry, consensus formed that the two would need to wait until a new post-Obama administration to give a tie-up another thought.
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.
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)
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.
Sep. 22, 2015, 7:24 PM
- With most observers thinking any theoretical merger between T-Mobile (TMUS -1.1%) and Sprint (S +0.3%) would have to wait until a new U.S. administration (and John Legere saying "Oh yeah ... the only possible coming together of Sprint and T-Mobile is if we pick them up off the sidewalk"), analysts at Evercore say the two could combine network assets.
- It would be a sort of a merger, into a new company (a REIT in particular) that would hold their network resources. Bigger investments at lower cost would come, along with a speedier network once spectrum assets were blended.
- Given up, of course, would be the chance to differentiate, and snipe the rival over network power.
- Combined, the two control 255 MHz of spectrum, more than the 147 MHz at AT&T (T -0.9%) or the 116 MHz of Verizon (VZ -0.9%). A new "NetCo" would rent the network back to the two, as well as possibly others, and support MVNO customers.
- As a final entry in the "pro" column, the analysts note a combined network would make any future merger more headache-free.
Jul. 10, 2015, 6:42 PM
- T-Mobile (TMUS +0.6%) and Dish Network (DISH +2.7%) entered into merger talks last month in a media/telecom industry boiling with consolidation, but who would benefit more from the tie-up?
- Barclays' Amir Rozwadowski (while laboring not to comment on the specific deal) hints that T-Mobile may have the bigger benefit in getting their hands on Dish's spectrum haul.
- More and more of us are consuming mobile video, and that calls for "bigger highways," he says: "When you look at where T-Mobile's need will be -– not over the next one to two years, because they definitely have a strong spectrum portfolio to support themselves -– but when you look at the data bandwidth growth over the next five to 10 years, there is certainly an attractiveness to having more spectrum." (video)
- Asked whether T-Mobile CEO John Legere needs to do a deal after failing to tie up with AT&T or Sprint: "I think the question really is, how much -- grand ideas does he have for the business over the longer term?"
- Last week, analyst Craig Moffett expressed skepticism the deal would go through and that it wasn't about synergies: "Although it was touted as Dish buying T-Mobile, it would really be T-Mobile buying Dish's spectrum through a complicated transaction."
Jul. 8, 2015, 7:25 PM
- On a down day for U.S. markets at large and the sector in particular, Sprint (NYSE:S) still led telecom decliners, -8.3% (its biggest one-day drop in eight months) on a day where NYSE trading was interrupted for more than three hours.
- Analyst Craig Moffett thinks the government may take a different stance than it did before on a merger between Sprint and T-Mobile (NYSE:TMUS) -- if Sprint "really is in severe financial distress, as we think they will be within a relatively short period of time."
- A Sprint/T-Mobile tie-up, though, wouldn't happen until after the next presidential election, if at all, he said.
- Asked about merger talk between T-Mobile and Dish Network (NASDAQ:DISH), meanwhile, Moffett thinks that's "unlikely" and "not about the business synergy between two businesses."
- "Although it was touted as Dish buying T-Mobile, it would really be T-Mobile buying Dish's spectrum through a complicated transaction."
- This spring, Moffett has pointed to cash burn in saying that if T-Mobile goes to another acquirer, "Sprint's in a world of hurt" and running out of good options. "At the current rate of cash burn, the company will run out of cash in a year."
- Previously: T-Mobile and Dish Network: Other options, other suitors (Jun. 12 2015)