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Dec. 15, 2015, 1:06 PM
- CenturyLink (CTL +3.5%) -- and to a lesser extent, Frontier Communications (FTR -0.4%), Verizon (VZ +0.6%) and AT&T (T +0.8%) -- could see upside with Congress looking at renewing a capex tax break for industries including telecommunications.
- UBS analyst John Hodulik sees legislators pursuing a retroactive 2015 extension of bonus depreciation, which lets companies deduct half the cost of some capital equipment purchases immediately, and which would boost free cash flow. Legislators could also extend the deal into 2016 or beyond as well.
- "We believe CenturyLink would be the largest beneficiary" of that extension, Hodulik says, with free cash flow rising 44% after its tax bill drops from an expected $1B to around $350M.
- Other companies would benefit as well: Frontier's free cash flow would rise about 19%, while AT&T and Verizon could see gains of 11% each if the break gets a retroactive extension.
Dec. 15, 2015, 10:33 AM
- Verizon (NYSE:VZ) is trailing the broad market, -0.2%, after BTIG Research downgrades it to Neutral, from Buy.
- Wireless margins have soared to record levels of near 56% from under 50% last year, the firm notes, raising the question of whether its best times are in the rear-view mirror.
- Verizon shares are flat over the past year and down 2.1% over the past three months.
Dec. 14, 2015, 5:41 PM
Dec. 9, 2015, 4:26 PM
- Starting with a test beginning in the coming days, Verizon (NYSE:VZ) will begin offering content that doesn't count against a user's data cap, as a result of it being sponsored by a third party. A larger commercial launch is due in Q1.
- VP Marni Walden: "The capabilities we’ve built allow us to break down any byte that is carried across our network and have all or a portion of that sponsored," Critics have argued sponsored content creates an uneven playing field for those companies that can't afford it. Defenders assert the concept is fundamentally similar to toll-free calling.
- AT&T has been testing its own sponsored content solution for some time. T-Mobile, meanwhile, lets users consume a slew of music and (more recently) video services without having the activity count against their data caps; the company isn't paid by content providers for doing so.
- Allot (NASDAQ:ALLT) provides deep packet inspection (DPI) systems that allow carriers to set unique policies for different types of content traveling over their networks. Its shares rose 4.6% today, possibly aided by a bullish Tuesday afternoon column from SA author Cobia Capital Management.
Dec. 8, 2015, 3:43 PM
- Backing up his CFO's comments at the UBS investor conference yesterday, Verizon (NYSE:VZ) chief Lowell McAdam today confirmed the carrier would explore buying Yahoo's (NASDAQ:YHOO) Internet business if it decided to sell.
- “We’d look at it like anything else,” McAdam said, while noting it's still not clear what Yahoo's board has planned.
- Verizon is one of many telecom/media firms linked (by the companies themselves or analysts) to a possible purchase of Yahoo's core; In Verizon's case, there's some strategic fit in Yahoo's content and tech business (like ad-tech company BrightRoll), though also hurdles (the biggest being the tax implications of Yahoo's Alibaba (NYSE:BABA) stake).
- Previously: Verizon expresses interest in Yahoo (Dec. 07 2015)
- Previously: Media companies linked to circling pack around Yahoo Internet business (Dec. 02 2015)
- Related: Verizon-Yahoo Tie-Up? (Dec. 08 2015)
Dec. 8, 2015, 3:16 PM
- A full 42 California government entities have joined a lawsuit against the big four U.S. wireless providers -- AT&T (T -1.8%), Verizon (VZ -1%), T-Mobile (TMUS +1.2%) and Sprint (S +3.2%) -- alleging that they overcharged government customers by more than $100M.
- The entities, which include Sacramento and Los Angeles Counties and the University of California Regents, say the four have ignored cost-saving requirements that are in their contracts with state and local government customers.
- The companies were required to determine the lowest-cost plan and provide that; failing to do so meant that the plaintiffs missed out on 20-30% cost reductions, the suit argues.
Dec. 8, 2015, 1:15 PM
- AT&T (T -1.1%) is joining the club, planning a mobile entertainment service of its own to catch up to ambitious plans from pipe-owning competitors.
- At the UBS investor conference, CEO Randall Stephenson pointed to 30M homes without pay TV subs in outlining hopes to offer an over-the-top video bundle for people without a satellite subscription.
- He said January was the launch time frame for a package with "mobile stacked content together with a really robust wireless asset."
- Verizon (NYSE:VZ) launched its Go90 service in beta in September promising hours of free content to users regardless of mobile service, and was live at the beginning of October.
- The DirecTV move has made it possible for AT&T, Stephenson explained. "You go down the premium content channels" -- HBO, Showtime, Starz, A&E, et al. -- "we got the stacking rights and mobile rights ... This is about the best over-the-top portfolio of content I believe in the United States."
- In his talk, he also mentioned that there's "a little pressure" on the company's video subscriber numbers with some people migrating from U-verse to DirecTV, but AT&T still has "a shot" at Q4 growth and "for sure, as we move into the first quarter, we will have TV subscriptions growing."
- Previously: Verizon's Go90 video service enters app charts after wide launch (Oct. 02 2015)
Dec. 8, 2015, 10:14 AM
- AOL (VZ -1%) has laid off about another 100 employees -- most of which were in its declining Membership (dial-up) area.
- About two-thirds were in the Membership division while the rest came from cross-company functions including marketing and advertising that weren't tied to a specific AOL brand; that operations layer is expected to shrink as the company emphasizes specific businesses.
- Just prior to its acquisition by Verizon early this year, AOL reported that Membership accounted for about $182.6M in revenues, around 30%, though an Internet subscriptions business has a heavy overlap with Verizon functions.
Dec. 7, 2015, 7:34 PM
- With a hot holiday season ahead, Verizon (NYSE:VZ) has surpassed AT&T (NYSE:T) as the wireless industry's top advertising spender for November.
- Of a total $189.3M placing TV commercials, Verizon spent about $1.2M more than AT&T, for about 21.1% of the total, FierceWireless/iSpot.tv say.
- Those two were ahead of T-Mobile (NASDAQ:TMUS). Meanwhile, Cricket Wireless, AT&T's prepaid brand, was the fourth-largest spender, putting big-four member Sprint (NYSE:S) in fifth place -- with about half of its spending going to its new half-off promotion.
Dec. 7, 2015, 9:14 AM| Dec. 7, 2015, 9:14 AM | 27 Comments
Dec. 3, 2015, 8:04 PM
- Another week brought more promotions (at least in holiday shopping season) for U.S. wireless carriers fighting for customers.
- Verizon (VZ -0.8%) today offered 2 GB of bonus data for new phones added or upgraded on its larger data buckets (XL or XXL, in the company's clothing-size parlance). The deal is good just through Jan. 6.
- The data's shareable with devices on the plan, but tablets/connected devices alone aren't eligible to be added/upgraded for the deal.
- Meanwhile, T-Mobile's (TMUS -3.3%) target of the day is AT&T (T -1.4%); it's offering those customers an iPhone bargain (128 GB model for the price of the 16 GB model) and half off financed in-store accessories (focused on speakers, headphones, smartwatches, fitness trackers).
- T-Mobile says the iPhone deal represents a $200 value, given back via bill credit. Its deal is available Dec. 4 through Dec. 13.
Dec. 3, 2015, 3:31 PM
- Frontier Communications (FTR -0.5%) has won its approval from the California Public Utilities Commission for its $10.5B acquisition of Verizon's (VZ -1.3%) wireline operations in the state.
- It had gotten a favorable signal from the PUC early last month. Frontier has received the other approvals for its takeover of the operations, which include telephony, broadband and video considering the included FiOS network.
- CEO Daniel McCarthy said the company was looking forward to the finish, now expected by the end of March: "We will transition our revenue to a more diversified mix, improve our growth prospects, create sustainable value for our shareholders and provide a great experience for our new Frontier customers in California, Florida and Texas."
- Previously: Frontier Communications +2.4% as California wireline purchase moves ahead (Nov. 09 2015)
Dec. 3, 2015, 1:30 PM
Dec. 2, 2015, 9:42 PM
- While speculation about buyers for Yahoo's (NASDAQ:YHOO) core Internet business is focused on private equity, Yahoo's evolution as a media company means a number of media/telecom firms are in play for all or part of the business.
- A sale of the core business might not happen -- it's not the main purpose of Yahoo's meeting -- but on the other hand, a transaction would certainly value it at more than where it is locked up in Yahoo, which may be less than zero because of the investments in Alibaba and Yahoo Japan.
- Estimates vary widely on the Internet business' value, from just under $2B to as much as near $4B. Comcast (NASDAQ:CMCSA) could have room for that after it failed to acquire Time Warner Cable; it's been spreading out investments in a number of media and Internet companies this year, and it could lump in Yahoo's properties with its own Xfinity online video.
- Like Verizon (NYSE:VZ), another potential Yahoo Internet suitor, Comcast has also been shoring up its ad-tech bona fides with some 2015 acquisitions. Verizon could use Yahoo's data to present a better competitive face to Google and Facebook, though it would have redundancies to deal with.
- Other companies like News Corp. (NWS, NWSA) or Time Inc. (NYSE:TIME) may be more interested in some pieces of Yahoo's business rather than the whole. SunTrust analyst Robert Peck even considers AT&T (NYSE:T) and Walt Disney (NYSE:DIS) prospective buyers; Disney for tapping the data to market theme parts and movies, and AT&T trying to match up better against the Verizon/AOL combo.
- Previously: FT: P-E firms show interest in Yahoo's core business (updated) (Dec. 02 2015)
Dec. 2, 2015, 3:42 PM
- It won't be the most surprising development, but Moody's is forecasting that wireless price wars will prevent real expansion in industry margins in the coming year.
- The firm estimates revenues (including equipment) to grow 3-4% overall, but that EBITDA margins will expand about 1%.
- In a bid to steal customers from the top two -- AT&T (T -0.4%) and Verizon (VZ -1.4%) -- Sprint (S -2.1%) and T-Mobile (TMUS -0.9%) have been pushing aggressive promotions, from Sprint resurrecting a "cut your bill in half" idea to T-Mobile dangling $200 in front of Sprint switchers.
- AT&T won't be chasing customers this season, says Jefferies' Mike McCormack -- the company believes the subscriber base it's losing is coming from "mostly lower-value postpaid subscribers and prepaid," he says.
Dec. 2, 2015, 1:44 PM
- At least three unnamed P-E firms have explored buying Yahoo's (YHOO +6.5%) core Internet business in recent months, the FT reports. No formal talks have been held.
- The paper joins the WSJ in reporting Yahoo's board is exploring the sale of the core business this week amid tax concerns regarding the planned Alibaba stake spinoff. The business, pressured by display ad share loss and tough search competition from Google/Bing, had 2014 revenue (ex-TAC) $4.4B and op. income of $755M. Thanks in part to the restructuring of the Microsoft search deal, Q3 revenue fell 8% Y/Y to $1B.
- Re/code, for its part, downplays the WSJ's report. Though it says Yahoo's board will mull the status of the Alibaba spinoff following pressure from Starboard Value to sell the core business instead, it adds the spinoff remains set for early January for the time being, and that a CEO has been selected.
- The site also states Yahoo, which was recently reported to have hired McKinsey to help decide which businesses to keep/shutter, plans to "unload a number of units and cut resources to others also remaining in place."
- Yahoo remains sharply higher in response to the WSJ's report. Shares are still down 29% YTD.
- Update: Sources tell the WSJ Verizon (NYSE:VZ) and InterActiveCorp (NASDAQ:IACI) are among the companies that would "likely explore a purchase" of core Yahoo. P-E firm TPG Capital has reportedly "looked at buying media properties within Yahoo."
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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