Fri, Oct. 23, 10:42 AM
- AOL (VZ +0.7%) has closed its $248M deal for Millennial Media (NYSE:MM) after 80% of shareholders tendered shares by the midnight deadline.
- Millennial's now a wholly owned subsidiary and has stopped trading on the NYSE. Adding the company gives a boost to AOL's ONE ad network and, AOL says, "adds an incredibly talented team of mobile-first experts, many of whom will take on leadership and integral roles at AOL Platforms."
- Nine Millennial Media execs are taking roles at AOL, though CEO Michael Barrett departed the company.
- Previously: AOL/Verizon buying Millennial Media for $248M (Sep. 03 2015)
Wed, Oct. 21, 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)
Tue, Oct. 20, 11:27 PM
- Richard Plepler, CEO of HBO (NYSE:TWX), had talked nicely in the spring about whether the launch of stand-alone service HBO Now would antagonize the network's longtime cable partners: "We see this as an expansion of the pie, not cannibalistic at all of our current business."
- Now he's speaking a little more directly: “If you’re Brian [Roberts, CEO of Comcast (NASDAQ:CMCSA)] and you have 6M broadband subs, why would you not bundle HBO and share that revenue with us? Why would you give up that real estate and not be paid for it? I don’t understand it," Plepler said tonight in a keynote in Laguna Beach, Calif.
- Comcast, along with to-be-merged Charter (NASDAQ:CHTR) and Time Warner Cable (NYSE:TWC), don't offer HBO Now. Cablevision (NYSE:CVC) and Verizon (NYSE:VZ) do.
- In comments reported by Variety, Plepler went after distributors who were leaving money on the table: “Some of our partners are not as skilled at that, and I think that’s myopic on their part,” he said.
- Previously: HBO CEO: Direct streaming a play for millennials (Mar. 31 2015)
- Previously: HBO-Apple deal a year in the making; cable partners still a challenge (Mar. 09 2015)
Tue, Oct. 20, 2:46 PM
- Verizon (NYSE:VZ) is up 1.4% after this morning's earnings beat in which it grew subscribers -- though mitigated by repricing that is sweeping the industry as companies move to device installments. Average revenue per account and wireless service revenue did decline slightly.
- With wireless service maturing, the company is starting to invest in the market for eyeballs, with data its "next big growth engine," analyst Craig Moffett notes: "Verizon is turning its attention to its vast trove of information about the comings and goings of its 100M wireless users ... Their goal is to reinvent the advertising business."
- The launch of its video service Go90 is a step toward that, though Verizon was mum today about the number of signups. On the company's earnings call, CFO Fran Shammo did say "We are starting to see a number of encouraging revisits to the platform on a daily basis" to check on a pair of its exclusive shows, Top Five Live and Betch.
- Of course, looking at Verizon's results has also gotten more complicated with new device installment accounting that lets them book more revenue for hardware up front -- and get a bigger margin boost from new subscribers.
- Asked about whether the company might reconsider leasing with a couple of competitors pushing it aggressively, Shammo said: "I am not interested in a rental program. We are not seeing any impact from those programs from the competitors in our base."
- Previously: Verizon up 0.7%; grows earnings, adds 1.3M postpaid subs (Oct. 20 2015)
Tue, Oct. 20, 9:11 AM
- Verizon (NYSE:VZ) is up 0.7% premarket following the release of Q3 results where it grew earnings substantially and added 1.3M postpaid subscribers amid hot competition.
- Unsurprisingly, though, average revenue per account came under pressure in an environment where wireless firms scrambled to discount plans to win iPhone users.
- Revenues by segment: Service revenues, $28.9B (down 0.8%); wireless equipment, $4.29B (up 73.1%). Revenues from AOL are included; excluding AOL, revenues would have grown 3.1%.
- Added 1.3M net retail postpaid connections; churn fell 7 bps to 0.93%. Total retail connections were 110.8M, with 105M total retail postpaid connections. ARPA fell to $152.38 from Q2's $153.73 and a year-ago $161.24.
- In wireline, 114K FiOS Internet net additions and 42K FiOS video net adds, both up Q/Q and up 7.2% and 5% Y/Y respectively.
- Cash flow from operations rose to $28.4B from a year-ago $23.2B.
- Press Release
Tue, Oct. 20, 7:32 AM
Mon, Oct. 19, 5:30 PM
Fri, Oct. 16, 7:02 PM
- Customer dissatisfaction with copper-based broadband is a threat for firms like AT&T (NYSE:T) and CenturyLink (NYSE:CTL), Morgan Stanley says, noting a ripe opportunity for cable companies.
- Though cable firms (CMCSA, CHTR, TWC, Cox) dominate broadband already, there's upside for them if they target providers of DSL, IPTV and even satellite broadcasters like DirecTV and Dish Network (NASDAQ:DISH) which resell DSL service.
- The conclusions are based on Morgan Stanley's August-September survey of homes on broadband and TV services.
- Cable customers got faster speeds on average -- 38 Mbps, vs. 21 Mbps for DSL -- and "U-verse and AT&T DSL had especially weak satisfaction results, and satellite pay-TV subscribers' broadband satisfaction fell materially year over year."
- Meanwhile, FiOS (NYSE:VZ) customers were happier and saw nearly 30 Mbps service on average.
Fri, Oct. 16, 5:07 PM
- The FCC is probing four companies -- AT&T (T +1%), Verizon (VZ +0.1%), CenturyLink (CTL -0.7%) and Frontier Communications (FTR -1.9%) -- over terms they set for business broadband, the dedicated mission-critical lines that make everything from schools to ATMs work.
- That's a $20B market, and competitors including Sprint (NYSE:S), Level 3 (NYSE:LVLT) and Cogent (NASDAQ:CCOI), along with Amazon.com and others, are complaining about unfair lock-ups with large early termination fees.
- The FCC has found "potentially unjust and unreasonable practices" that rise to the level of an investigation. It says the four companies it's probing use plans with “a complicated web of all-or-nothing bundling, loyalty and term commitments, complex enforcing penalties” and other provisions, and asked them to respond by Dec. 18.
- In a mailed statement, industry group USTelecom (of which the four companies are members) says the investigation is a "rear-view mirror" approach. “Although the FCC says that it wants to be a data-driven agency, promote facilities-based competition, and incent broadband investment, it just can’t seem to get beyond its telephone-era mindset when it comes to regulating 20th century legacy services," says USTelecom President Walter McCormick.
Fri, Oct. 16, 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).
Wed, Oct. 14, 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.
Tue, Oct. 13, 10:00 PM
- In Cowen's new look at telecoms, it took up the issue of how telecom service providers face their struggles with cloud computing.
- Many providers have struggled as newcomers to the business, analyst Gregory Williams wrote. Investors have pressured CenturyLink (NYSE:CTL) to sell its hosting business -- it bought data-center operator Savvis for $2.5B -- but "management remains adamant that the colocation/hosting business is a key differentiator and integral growth driver of the story."
- Wireless leaders have the same issues, he says. "It would not be surprising for Verizon (NYSE:VZ) and/or AT&T (NYSE:T) to sell some or all of its nonstrategic (and underperforming) colo/hosting business assets ... At a recent sell-side event, Verizon management acknowledged that its Terremark assets served a specific niche effectively (enterprise/gov't security and manageability) but cannot compare to more comprehensive cloud assets in the marketplace."
- Verizon bought Terremark for $1.4B four years ago.
- Previously: Frontier Communications +2% as Cowen praises dividend, launches at Buy (Oct. 13 2015)
Tue, Oct. 13, 6:30 PM
- Amid a lengthy labor dispute, the Communications Workers of America has launched new TV ads slamming Verizon (NYSE:VZ) with New York City's audit of the carrier's FiOS rollout.
- The audit, which Verizon disputed, found that Verizon had failed to meet a 2008 promise to deliver its high-speed network to everyone in the city who wanted it.
- The CWA ads say that New Yorkers "in Bed-Stuy, the Bronx and neighborhoods in between" have been asking for FiOS "and getting the runaround."
- It's all to add pressure ahead of a City Council hearing on Wednesday that will listen to residents, the city adminstration and Verizon.
- CWA workers had voted to approve a strike this summer. The union also said Verizon was refusing to fix broken landlines, instead steering customers to its wireless Voice Link service. "It's pure nonsense to say we're abandoning our copper networks," Verizon had replied in June.
- Previously: NYC criticizes slow Verizon fiber rollout (Jun. 17 2015)
- Previously: Union accuses Verizon of leaving landlines broken (Jun. 09 2015)
Mon, Oct. 12, 2:16 PM
- Evercore adds its voice to the chorus that says Verizon (NYSE:VZ) has the lead on AT&T (NYSE:T) to build out FirstNet, the government's planned public-safety wireless broadband network.
- FirstNet's board is reportedly looking at only "national deployment" offers from companies that respond to a request for proposals due out by year-end -- which means it likely won't be split among the big four wireless firms.
- The project, focused on emergency first responders, is expected to cost $20B-$30B, and states can opt out of it.
- "Verizon already has a rural partnership program — which allows rural carriers to use Verizon's 700 MHz spectrum in building out their markets with LTE," notes Evercore's Jonathan Schildkraut.
Thu, Oct. 8, 2:55 PM
- Following on a Sprint move to raise the price of its unlimited data plan by $10/month, Verizon (VZ +0.4%) says it's hiking the price of its grandfathered unlimited-data plans by $20/month.
- That's set to take effect Nov. 15, though those on a two-year unlimited-data contract will get to see their rates play out.
- The move is likely a not too subtle nudge toward the company's tiered plans for those who still have unlimited data. Verizon says "most of our customers (99%)" aren't on unlimited plans.
Fri, Oct. 2, 8:41 PM
- Verizon (NYSE:VZ) has gone live with its Go90 mobile video service, and today the app jumped into the No. 14 spot in iOS Entertainment.
- That's a spot well behind Netflix and Hulu, but ahead of Comcast's Xfinity TV Go and HBO Now.
- The company planned an $80M marketing blitz to support the launch, and says it has a content library of 8,000 titles and 35 exclusive original series.
- The app is free to all, meaning advertising will be the moneymaker -- and so the quality of content will be king. Go90 got more than $50M in ad commitments including an upfront deal with its exclusive agency partner Publicis Groupe (OTCQX:PUBGY +1.4%).
- With few long-form shows at the moment, Go90 is competing less with OTT services like Netflix, Hulu or HBO Now, and more with YouTube, Snapchat and other Webby services.
- Jefferies noted after meeting with AOL's Tim Armstrong that Verizon wants to grow into a "leading scaled OTT provider serving millions of customers while also becoming a top 3 player in the mobile advertising marketplace."
Verizon Communications Inc is a provider of communications, information and entertainment products and services to consumers, businesses and governmental agencies. Its two segments are Wireless and Wireline.
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