T-Mobile US, Inc.NASDAQ
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
Mar. 6, 2014, 1:49 PM
- "I don’t want to insist on [U.S. mobile] consolidation, but I don’t want to rule it out," says Deutsche Telekom (DTEGY, DTEGF) CEO Tim Hoettges.
- The remarks come after Hoettges reportedly told DT's board he considers a sale of 67%-owned T-Mobile USA (TMUS -1.8%) unlikely in the near-term, given regulatory opposition to a bid from Sprint (S -3.6%) and parent SoftBank (SFTBF, SFTBY).
- Citing T-Mobile USA's aggressive investments, DT now expects its 2015 free cash flow to only be up "slightly" from 2014 levels. The carrier previously forecast 2015 FCF to rise to €6B ($8.3B) after hitting €4.2B ($5.8B) in 2014.
- Sources tell Bloomberg Hoettges is now "taking a long-term view in the U.S.," and is focused on converting more of T-Mobile's giant prepaid base into postpaid subs.
- DT shares fell 3.6% in Frankfurt. Both T-Mobile and Sprint are selling off in U.S. trading.
- More on Sprint/T-Mobile
Mar. 5, 2014, 4:03 PM
- Deutsche Telekom (DTEGY, DTEGF) Tim Hoettges says a sale of 67%-owned T-Mobile USA (TMUS +0.1%) is unlikely anytime soon. T-Mobile and Sprint (S -0.5%) have both moved moderately lower in response.
- The WSJ reported yesterday SoftBank's (SFTBF, SFTBY) Masayoshi Son plans to mount a PR campaign to convince skeptical businesses and policy makers regarding the value of a Sprint/T-Mobile merger.
- Sprint/SoftBank have been widely reported to be lining up financing for a T-Mobile bid.
Mar. 4, 2014, 2:02 PM
- With FCC/DOJ regulators strongly suggesting they'll oppose any attempt by Sprint (S +3.1%) to merge with T-Mobile USA (TMUS +3.6%), SoftBank's (SFTBF, SFTBY) Masayoshi Son "plans to appeal directly to the U.S. business community and policy makers" to convince them the deal would be good for customers, the WSJ reports.
- Crucial to Son's effort: Convincing his audience Verizon and AT&T currently have a de facto U.S. mobile duopoly, one that Sprint and T-Mobile can't challenge independently.
- Likely to hurt his cause: T-Mobile is now rapidly adding postpaid subs (after losing them for years) with the help of innovative pricing schemes, and regulators reportedly fear a Sprint merger could affect T-Mobile's "maverick" status within the industry.
- Sprint and T-Mobile are both outperforming today. Son plans to make a major presentation on March 11 at the Chamber of Commerce in Washington D.C.
- More on Sprint/T-Mobile
Feb. 12, 2014, 10:20 AM
- Deutsche's Brett Feldman has upgraded Sprint (S +1.4%) to Buy following yesterday's Q4 report, albeit while leaving his PT unchanged at $9.25. He cites Sprint's spectrum advantage (presumably a reference to its high-frequency assets following the Clearwire deal), and the carrier's 2-year EBITDA growth outlook.
- However, Feldman still expects major subscriber losses in 1H14, followed by "a return to modest growth" once Sprint's Network Vision 4G initiative is finished. He's also skeptical a T-Mobile USA (TMUS +0.4%) deal will happen in light of regulatory concerns.
- But while regulators continue signaling their skepticism, SoftBank's (SFTBF) Masayoshi Son appears undeterred in his quest to merge the #3 and #4 U.S. U.S. mobile carriers. Son tells the WSJ it would be "a dream within a dream" to challenge Verizon and AT&T without the scale provided by an acquisition. "I can't settle for No. 3 or No.2. It's my personality."
- Recent WSJ and Bloomberg reports suggested Sprint/SoftBank are weighing their options in the wake of recent DOJ/FCC comments.
Feb. 10, 2014, 3:07 AM
- Sprint (S) is rethinking its attempt to buy T-Mobile US (TMUS) from Deutsche Telekom (DTEGF) after the Justice Department and the FCC expressed skepticism that the acquisition would be allowed, the WSJ reports.
- Sprint could still try to purchase T-Mobile, but executives will take their time in order to refine their strategy and antitrust arguments.
Feb. 6, 2014, 11:16 AM
- After rallying yesterday on a report Sprint (S -6.1%) is close to lining up $45B in financing for a T-Mobile USA (TMUS -5.4%) bid, Sprint and T-Mobile are selling off following a Bloomberg report stating FCC/DOJ regulators have "resisted the concept" of a merger between the carriers in preliminary talks with SoftBank's (SFTBF) Masayoshi Son, and that Son and Sprint's Dan Hesse now "plan to decide in the next few weeks whether to move ahead on a bid."
- Bloomberg adds Deutsche Telekom (DTEGY) has asked Son to "gauge regulatory sentiment" towards a merger, and that Son and DT's perception of regulatory feedback will "determine their next steps."
- In addition, SoftBank and DT are reportedly at odds over the breakup fee for any deal - SoftBank wants a small one on account of regulatory risks, DT feels differently.
- FCC and DOJ officials have already suggested they're skeptical about backing a merger between the #3 and #4 U.S. mobile carriers. While Sprint might argue the carriers need to merge to effectively compete against Verizon/AT&T, T-Mobile's recent share gains bring that claim into question.
- More on Sprint/T-Mobile
Feb. 5, 2014, 2:20 PM
- Sources tell dealReporter Sprint (S +6.5%) is close to obtaining $45B in financing for a T-Mobile USA (TMUS +3.9%) bid. Both Sprint and T-Mobile shares have spiked higher in response.
- The WSJ previously reported Sprint has received proposals from at least two banks for a bid that would value T-Mobile's equity at $31B. In addition to the financing needed to acquire Deutsche Telekom's (DTEGY) 67% T-Mobile equity stake, Sprint and parent SoftBank (SFTBF) will need funds to cover (and potentially refinance) T-Mobile's $20B debt load.
- The report comes as DOJ/FCC officials continue taking a skeptical view of a deal that stands to reduce the number of nationwide U.S. carriers to three.
Feb. 4, 2014, 3:57 AM
- Federal Communications Commission Chairman Tom Wheeler yesterday expressed skepticism about the possibility of Sprint (S) acquiring T-Mobile US (TMUS), Reuters reports. Wheeler made his feelings known during a meeting with Sprint Chairman Masayoshi Son and CEO Dan Hesse.
- Wheeler echoed comments that antitrust chief William Baer made last week, when the latter gave long odds that mergers between any two of the four largest cellular carriers would receive regulatory authorization.
- However, Wheeler also said he would keep an open mind about the prospective deal.
- Sprint argues that it needs to merge with T-Mobile US so that it can challenge the dominance of Verizon and AT&T.
Jan. 28, 2014, 6:44 PM
- The WSJ reports Sprint (S) CEO Dan Hesse and SoftBank (SFTBF, SFTBY) chief Masayoshi Son met DOJ officials this month regarding a possible T-Mobile USA (TMUS) bid, and were told a deal would be viewed "with skepticism."
- The paper adds SoftBank and T-Mobile USA parent Deutsche Telekom (DTEGY, DTEGF) have been talking about a deal, but are still "working through remaining issues" such as the size of the deal's breakup fee (Son reportedly is pushing for a small one) and whether Sprint or T-Mobile's brand would be retained.
- Both the DOJ and FCC have been expected to show intense scrutiny of a merger that would lower the number of nationwide U.S. carriers to three, and feature a carrier that has been upending the U.S. mobile industry with new promotions and pricing schemes.
- TMUS -1.7% AH.
- More on Sprint/T-Mobile
Jan. 27, 2014, 1:48 PM
- During a Bloomberg TV interview, outspoken T-Mobile USA (TMUS -0.1%) CEO John Legere provided fresh hints his firm is open to merging with Sprint (S +6.5%).
- Legere: "We all need better scale and capability ... The question starts to be: How do you take the maverick and supercharge it? We either need more spectrum and capability and a lot more investment, or we need consolidation."
- Sprint and parent SoftBank (SFTBF, SFTBY) have been widely reported to be lining up financing to acquire Deutsche Telekom's (DTEGF, DTEGY) 67% T-Mobile USA stake. But regulators might object to a tie-up, particularly given T-Mobile's efforts to shake up the U.S. mobile industry via aggressive/novel pricing schemes.
- Separately, Sprint announces it has expanded its 4G LTE network to cover 40 more markets, including Milwaukee and Salt Lake City. Sprint, which is trying to neutralize Verizon and AT&T's LTE coverage leads, now offers LTE in 340 markets.
Jan. 19, 2014, 1:21 AM
- SoftBank (SFTBF) and Deutsche Telekom (DTEGF) are attempting to resolve obstacles to Sprint's (S) possible acquisition of the German carrier's 67% holding in T-Mobile USA (TMUS), Bloomberg reports.
- Such obstacles include much cash and stock SoftBank will pay - Deutsche Telekom wants the whole deal to be in cash - how Sprint and T-Mobile would be integrated, and the size of a break-up fee.
- Softbank is looking to borrow $20B to finance the deal, which could value T-Mobile at $31B vs its market capitalization of $26B. Sprint would take on the debt.
- More Sprint / T-Mobile deal.
Jan. 16, 2014, 5:20 PM
- The WSJ reports Sprint (S) has "received proposals from at least two banks" for financing a T-Mobile USA (TMUS) bid, and envisions valuing T-Mobile's equity at $31B (compares favorably to a current market cap of $26B).
- Financing, of course, is only one of several challenges Sprint would face in merging with T-Mobile. The company and parent SoftBank (SFTBF) would have to negotiate a deal for Deutsche Telekom's (DTEGY, DTEGF) 67% T-Mobile stake. They would also have to win the blessing of FCC/DOJ regulators who seem to prefer having four nationwide carriers around, and appear to be pleased with T-Mobile's aggressive pricing.
- There's also the matter of Dish (DISH -2.2%), which reportedly won't stand idly if Sprint bids for T-Mobile, and could have much less trouble winning the blessing of regulators.
- In addition to acquiring Deutsche's T-Mobile stake, Sprint may need to backstop a possible refinancing of ~$20B worth of T-Mobile deal.
- S +2.8% AH. TMUS +2.3%.
Dec. 26, 2013, 12:24 PM
- Wells Fargo has raised its Sprint (S +3.1%) valuation range to $11-$11.75 from $7.75-$8.25, and predicts ongoing reports of a Sprint/SoftBank bid for T-Mobile USA (TMUS +0.7%) will continue to bolster shares.
- The firm also thinks the value of Sprint's spectrum (increased by the Clearwire acquisition) helps create a base for shares, and notes a T-Mobile deal would produce major cost savings.
- Meanwhile, Reuters observes the Obama Administration has taken a skeptical view towards consolidation between major carriers and pay-TV providers, something that could stand in the way of a Sprint/T-Mobile deal.
- New FCC chairman Tom Wheeler recently stated his organization has a responsibility to "protect competition that exists and promote competition in those areas where it doesn't." Likewise, DOJ antitrust attorney William Baer has said the Department "believes it is essential to maintain vigilance against any lessening of the intensity of competitive market forces."
Dec. 24, 2013, 1:33 PM
- The Nikkei reports SoftBank (SFTBF, SFTBY) is "in the final stages of talks" with Deutsche Telekom (DTEGY, DTEGF) regarding a deal in which 78%-owned Sprint (S -0.2%) would acquire Deutsche's 67% stake in T-Mobile USA (TMUS +1%). Sources add the deal could happen as soon as next spring, and could be worth more than ¥2T ($19.2B).
- A ¥2T price tag for Deutsche's T-Mobile USA stake would translate into a $28.7B valuation for the #4 U.S. mobile carrier. T-Mobile USA, whose shares have risen sharply thanks to Sprint M&A rumors, currently has a market cap of $25.5B.
- SoftBank CEO Masayoshi Son has reportedly been busy lining up financing for a T-Mobile USA bid, which is bound to be intensely scrutinized by regulators. Reuters has reported Dish (DISH +1.1%) is also thinking of bidding for T-Mobile, and wouldn't stand idly if Sprint made a move.
Dec. 20, 2013, 4:20 PM
- Bloomberg has joined the WSJ in reporting Sprint (S +6.7%) is trying to obtain financing for a T-Mobile USA (TMUS +4.7%) bid from six banks, and provides additional details.
- Bloomberg's sources indicate SoftBank (SFTBF) CEO Masayoshi Son has personally talked with banks about obtaining ~$20B in financing. His goal: To buy Deutsche Telekom's (DTEGY) 67% stake in T-Mobile in an all-cash deal.
- At the same time, Sprint's management is said to be "reluctant" to deal with integrating Sprint and T-Mobile's incompatible 3G networks; Sprint uses the EV-DO air interface, while T-Mobile uses W-CDMA/HSPA. But with SoftBank owning 78% of Sprint, their objections may be rendered moot.
- Also: With regulatory approval of a Sprint/T-Mobile deal far from certain, Son reportedly wants to avoid agreeing to a large breakup fee. AT&T had to pay a $7B breakup fee to T-Mobile two years ago.
- Separately, T-Mobile has scheduled a Jan. 8 CES event where it will reveal the fourth part of its "un-carrier" strategy. Part one involved the elimination of phone subsidies and contracts in favor of monthly phone installment plans; part two involved the launch of T-Mobile's Jump smartphone upgrade plans; and part three brought cheap global data roaming and international talk/text plans.
Dec. 20, 2013, 12:08 PM
- The WSJ reports at least six banks are working on financing proposals for a Sprint (S +3%) bid for T-Mobile USA (TMUS +0.7%). Sprint, whose shares jumped a week ago when the paper first reported the carrier is thinking of making an offer for its smaller rival, is now up 16% since the initial report arrived.
- Financing or not, close regulatory scrutiny of a proposed merger between the third and fourth-largest U.S. mobile carriers is a given. JPMorgan noted yesterday a Dish (DISH +1.6%) bid for T-Mobile (TMUS +0.7%), also reportedly being weighed, would have much less trouble being cleared by regulators.