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
Yesterday, 10:08 AM
- T-Mobile (TMUS -0.5%) is extending a summer travel promotion and granting customers free international data until the new year.
- The carrier is offering high-speed data at no charge through South America and 19 European countries through Dec. 31.
- The plan -- an extension of a promotion that the carrier set up for the Rio Olympics -- doesn't allow for tethering another device to the connection, though.
- T-Mobile customers can already use their phones in Mexico and Canada as they do in the U.S.
Thu, Sep. 22, 12:02 PM
- Asked about announcements earlier at the Communacopia Conference regarding Comcast's (NASDAQ:CMCSA) and now Charter's (CHTR +0.6%) entries into wireless service, T-Mobile (TMUS +1.3%) COO Mike Sievert was sanguine: "Things in cable happen at the pace of cable."
- "We think it's great," he says. "If you're a T-Mobile shareholder it's hard to figure out how it could go badly for you," he says, pointing to T-Mobile's focus. If the companies come in and take customers, that's a market of not four but six carriers "in a world where T-Mobile is highly efficacious" at mobile. "Let's say they stumble, but they still believe in the vision of convergence. Also good. Or if they lose interest, and take their toys and go home ... also good."
- T-Mobile earlier this week released preliminary Q3 subscriber results that said it added 753,000 branded postpaid phone subs. Any benefit from the new iPhone 7? "Most of the benefit of the switching is in Q4, because we don't report the add until the phone ships to the customer, and most of the shipments are after Oct. 1," Sievert said. The company's free iPhone 7 trade-in promotion is ending Sunday, they said.
- Separately, the company suffered a significant overnight outage of its data service. It confirmed issues at 3:31 a.m. ET, and said service was back at 5:47 a.m.
Thu, Sep. 22, 11:31 AM
- The move to unlimited data service is the beginning of a "radical simplification" of the offer at T-Mobile (TMUS +0.5%), Chief Operating Officer Mike Sievert tells the Goldman Sachs Communacopia Conference.
- And still a differentiator, despite the resurgence of unlimited plans, he says: "At Verizon (VZ +0.4%), they're sticking somewhere between 'No' and 'Hell No' on unlimited."
- T-Mobile One, the company's recently announced "Un-carrier" move doing away with data buckets, is essentially a "monthly subscription to the Internet," and that has cost-cutting implications for them. "A third of our calls into our [customer care] centers are about the bill ... What if there was no bill? Because everybody has one simple monthly subscription and they've gone ahead and put it on autopay?" Autopay is on 20% of plans, CFO Braxton Carter says, and the company hopes to double that.
- Sievert contrasted the company's focus vs. larger, "convergence"-oriented rivals like AT&T (T +0.8%): "They're moving on; they're talking about other things, it's DirecTV, it's Mexico."
- Earlier at the conference, AT&T said it would zero-rate streaming service DirecTV Now and aggressively price it. "They must be overcome with jealousy about how [Verizon's] Go90's going!" Sievert laughs. "I'm here to tell you: We'll zero-rate DirecTV Now on T-Mobile, happy to pre-announce that."
Tue, Sep. 20, 2:57 PM
- With wireless subscription growth slowing overall, the "try harder" guys each say they're stealing each other's customers.
- T-Mobile (TMUS -2.8%) and Sprint (S -5.9%) said today they're taking subscribers from their small competitor, and thus presenting a tougher challenge to industry leaders AT&T and Verizon.
- They can't both be 100% right, though time may tell. T-Mobile provided a preliminary update, while Sprint will release official results at the end of the quarter.
- In its update, T-Mobile said it added about 753,000 branded postpaid phone subs in Q3 so far -- pacing below last year's Q3 gain of 1.1M with just a couple of weeks left, but ahead of Q2 in branded postpaid phone and prepaid net adds.
- To be fair, T-Mobile (a standout in industry subscriber growth in recent quarters) says it's taking customers from everyone this quarter: 250,000 postpaid phone and prepaid net customer adds from Verizon (VZ +0.3%), and 400,000 from AT&T (T -0.1%), to go along with 300,000 from Sprint.
- T-Mobile will provide a business update in a presentation to Goldman Sachs' Communacopia Conference Thursday at 10:30 a.m. ET.
- Previously: Sprint's Claure: All employees tied to turnaround; Five-year plan on track (Sep. 20 2016)
Fri, Sep. 16, 4:03 PM
- A California appeals court has given a win to San Francisco, upholding a decision for the city against T-Mobile (TMUS -1.3%), Crown Castle (CCI -1.2%) and EsteNet over where small cells are placed (and how good they look).
- The trial court had initially ruled against the plaintiffs, saying the city could use permits in order to prohibit specific installments of small cells for aesthetic reasons. The appeals court upheld that verdict.
- A 2011 ordinance calls for permits before installing wireless facilities in the public right of way; T-Mobile had argued that that conflicted with state public utility code allowing building lines on public roads and highways "in such manner and at such points as not to incommode the public use.”
- An explosion in small cell usage has resulted in growing conflicts with wireless providers in some cities around the country. The FCC may come to intervene, using rules originally developed for larger-scale cell towers.
Tue, Sep. 13, 9:50 AM
- T-Mobile (TMUS -1%) has paced to its new smartphone sales record with the initial days of preordering for the iPhone 7 and iPhone 7 Plus.
- The company didn't release total sales figures but said the phone set a single-day record for any smartphone on Friday, and over its first four days, the pre-orders were about four times more than the next most popular iPhone.
- Pre-orders began Sept. 9, and the phones will be available in T-Mobile stores Friday. Prepaid customers on MetroPCS will be able to get the new iPhones starting Sept. 23.
- Sprint (S -1.5%), meanwhile, said that in its first three days, preorders of the iPhone 7 and Plus are up more than 375% over last year.
Fri, Sep. 9, 5:57 PM
- "Wireless clouds are starting to gather," UBS says in a report noting that historically high margins for U.S. wireless carriers may have peaked, with negative impact coming as soon as next year.
- U.S. wireless firms have posted record profits for three years as carriers -- AT&T (T -3.6%), Verizon (VZ -3.3%), T-Mobile (TMUS -4.4%) and Sprint (S -2.2%) -- outpaced other global regions in average revenue per user, churn, EBITDA and margins.
- But three factors will conspire to depress EBITDA growth, UBS says: the decline of the margin accounting boost from the switch to equipment installment pricing; rising churn as phone replacement cycles shorten; and falling ARPU as carriers are forced to keep cutting data costs. "While it's hard to gauge the impact of recent price changes on ARPU, one thing is for sure, carriers are providing more value for the same price, lowering the inherent yield of additional data usage.”
- The firm's top pick in the sector is still T-Mobile, based on customer acquisition, but it notes that AT&T's diversification and bundling via DirecTV puts it in a good position.
Mon, Aug. 29, 2:57 PM
- T-Mobile (TMUS +2%) earned an upgrade to Outperform from Wells Fargo, with its "primary focus" on cash flow.
- The carrier is approaching a "hockey stick" move in free cash flow generation, analyst Jennifer Fritzsche says, with no ill effect from spectrum spending in FCC auctions.
- Wells has a $54 price target on T-Mobile, implying 15% upside from today's price.
- She sees $1B in free cash flow in fiscal 2016, followed by $2.6B in F2017 and $3.7B in F2018. That's on a base assumption the company spends $7B on spectrum, but in her model even if the company spends $8.3B, it would still mean almost $3/share in FCF in 2017.
- Fritzsche's top pick in the sector is still Sprint ("We still can give a longer catalyst list for Sprint"), though the firm expects both Sprint (S +1.5%) and T-Mobile stock to do well based on different metrics.
Mon, Aug. 29, 11:14 AM
- Buffeted by some criticism over its all-unlimited data move, T-Mobile (TMUS +1.8%) has issued changes to the new T-Mobile One plans with T-Mobile One Plus, with the plans launching five days sooner, this Thursday.
- Following criticism of its tethering speed, T-Mobile says it's upgraded hotspot speed on its standard plan to 3G, from a planned 2G. In addition, while mainline customers will get unlimited video "optimized" at 480p, the company will offer HD "day passes" for $3/day, allowing customers to stream unlimited HD video in a 24-hour period. Those passes will arrive in October.
- Targeted at its heavier-use customers, the T-Mobile One Plus plans will offer unlimited 4G LTE hotspot data, unlimited HD day passes, and double the speed when abroad (3G), for $25 more per line (over the $70/month for the one-line plan).
- The quick tweaks are part of T-Mobile's "Shut up and Listen" approach, says CEO John Legere -- "I’ve said it before and I’ll say it again – the best way to run your company is to shut up, listen to your customers, and then do what they say!" -- but no doubt T-Mobile was also giving a listen to Sprint (S +0.4%), which had created a high-end data-hungry version of its unlimited plan on Friday.
Wed, Aug. 24, 7:50 PM
- The first benchmark has been hit for closing the FCC's broadcast incentive spectrum auction, but the second benchmark will be a harder task.
- Bids have reached $16.3B after 15 rounds in the forward auction, which began last week as a second phase following an earlier reverse auction.
- That's exceeded the $15.9B total the FCC set as the first benchmark for closing -- but the other benchmark is $88.38B, which the FCC needs to pay broadcasters who set that price in the reverse auction as well as cover costs.
- There's still time, particularly with the price on the blocks rising by 5% a day, John Eggerton notes. But falling short of the $88.38B could mean reopening reverse auction rounds and a completion delayed into next year.
- Spectrum players: VZ, T, TMUS, S, DISH, SBGI, EVC, CMCSA, CHTR, NXST, CBS, MEG
Fri, Aug. 19, 1:03 PM
- The FCC has gathered a "strike force" of companies in telecommunications and technology to try to put an end to the "scourge" of unsolicited automated phone calls.
- The agency holds its first meeting today with its "Robocall Strike Force," a coalition that includes AT&T (NYSE:T), Verizon (NYSE:VZ), T-Mobile (NASDAQ:TMUS), Frontier Communications (NASDAQ:FTR) and Comcast (NASDAQ:CMCSA) along with tech partners in Alphabet, Apple, and Microsoft -- more than 30 companies in all.
- AT&T chief Randall Stephenson is serving as the group's chairman. It will provide a report by Oct. 19 on how to get new tools and solutions into consumers' hands.
- Currently, the FCC doesn't require providers to offer blocking and filtering tools for robocalls, but has strongly urged them to make tools available for free to customers.
- "It's vital that carriers move quickly to offer robocall blocking tools," Wheeler says. "This scourge must stop."
Thu, Aug. 18, 10:44 AM
- With T-Mobile (TMUS +0.7%) declaring an "end to data plans" in its new unlimited-plan push today, Sprint (NYSE:S) is hitting back with an "Unlimited Freedom" plan: Unlimited talk, text and data for $60/month, $10 cheaper than the one-line price at T-Mobile.
- Sprint's new unlimited plan costs $100/month for two lines (vs. $120 for the two lines in T-Mobile's new plan).
- Unveiled in a "tweetstorm" from Sprint chief Marcelo Claure, the plan nominally costs the same for four lines as T-Mobile's ($160). Also like T-Mobile, it promises "optimization" for streaming video, gaming and music -- the notorious data hogs of modern mobile phone usage.
- Sprint was said to be working on a revamp of its unlimited-data offering when news came of a surprise conference call from T-Mobile this morning, at which it introduced its all-in plan.
- Naturally, the dueling plans were accompanied by Twitter sniping between Sprint's Claure and T-Mobile's combative CEO John Legere. "Sounds like a crappy plan to me," Claure tweeted in response to T-Mobile's news, while Legere replied "It takes 5 mins to copy-paste... and a lot longer to build the right network." Food for thought as observers mull whether a peaceful merger is possible.
Thu, Aug. 18, 9:50 AM
- T-Mobile (TMUS -0.3%) used a surprise conference call today to unveil its "Un-carrier 12" move, an "end to data plans" with a single unlimited-data offer price.
- T-Mobile One is the company's move to get a single unlimited-LTE price in front of all customers. It costs $70/month for a first line, with a second at $50 and other lines at $20, meaning a family of four pays $40/line so long as they select autopay (with a $5/month/line surcharge without autopay).
- In a first, tablets are included on the unlimited-data plan for just $20 per tablet per month.
- The "catch" is that, in an outgrowth of the company's Music Freedom and Binge On offerings, video is unlimited just at standard definition; upgrading the video to HD costs another $25/month. And the new plan includes mobile hotstpot usage, but at 2G speeds.
- The company's also duplicating its fair-use policy from its Simple Choice plans, where users who use more than 26 GB of high-speed data per month (the top 3% of users) may see speeds throttled after that.
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, Aug. 16, 10:26 AM
- A major FCC auction of wireless airwaves just entered its second phase.
- The forward auction in the FCC's broadcast incentive spectrum sale has begun, with Comcast (CMCSA -0.1%) and Dish Network (DISH -0.8%) among those joining the usual spectrum suspects: AT&T (T -0.9%), Verizon (VZ -0.6%), and T-Mobile (TMUS +0.1%), but not Sprint (S +0.4%), which is sitting this out. Of about 100 parties eligible to bid, 62 have been certified by the FCC.
- That follows the reverse auction, where broadcasters set up blocks of spectrum they'll be selling to be reallocated for wireless carrier use.
- This phase represents a challenge, now that the reverse auction's price has been set at $86.4B. With costs, the FCC needs to raise $88B; if the forward auction doesn't reach that height, the reverse auction will need to be reopened to lower its price, which would also cut spectrum sold -- and likely drag the entire process into 2017.
- Broadcast players: SBGI, EVC, NXST, CBS, MEG
- Previously: Next phase of FCC spectrum auction likely to start mid-July (Jul. 01 2016)