Wed, Nov. 25, 7:23 PM
- Wells Fargo has picked its winners in March's FCC broadcast incentive auction for wireless spectrum -- and it figures AT&T (T +0.2%) will dominate bidding that should total $30B-$35B.
- Analysts at the bank predict up to $10B spending coming from the telecom giant for a nationwide block of 2x10 MHz airwaves.
- T-Mobile (TMUS -3.7%) -- which has been signaling aggressive moves in the auction -- will be second, with $8B spent, the analysts said, while Verizon (VZ -0.6%) should be last with $5B in bids. Sprint (S -1.8%) has already said it's sitting this one out.
- While AT&T backtracked a bit on pledges to spend $9B while it was digesting DirecTV (NASDAQ:DTV), the analysts think the benefits of a nationwide block may signal higher spending from the company.
- Verizon, meanwhile, has credit to spend up to $10B, but probably won't: "Similar to what T has said publicly and based on our conversations with spectrum experts, we look for VZ to contribute in a meaningful way if 2x10MHz bands are made available."
- Previously: T-Mobile -2.2% as it pledges $200 for each Sprint line that switches (Nov. 25 2015)
- Previously: SoftBank spending: Arora on investment universe, Sprint worries (Nov. 24 2015)
Fri, Nov. 13, 6:49 PM
- Along with a price hike for its unlimited wireless phone plans on Sunday, Verizon (VZ -1.3%) is bringing back activation fees, instituting a $20 charge for new lines of service.
- The carrier had waived the fees just a few months ago when it abandoned phone subsidies and service contracts; they were $40 at the time for customers who signed two-year deals.
- AT&T (T -1.1%) charges a $15 fee for devices sold through its installment program, or $45 for a two-year contract or purchased device.
- Verizon is raising the price of its unlimited data plan by $20/month on Sunday, a move in line with recent ones by its competitors. Sprint (S +0.7%) raised its own unlimited data plan by $10/month at the end of September.
- At least Verizon waited until after T-Mobile's (TMUS +2%) "Un-carrier X" event to drop the news; T-Mo's John Legere is fond of lambasting competitors for broad line activation charges, though every carrier has one somewhere.
Fri, Nov. 6, 1:14 PM
- Verizon (NYSE:VZ) shares that were off as much as 2% are rebounding, now down just 1.1%, as Reuters reports that the carrier is exploring a sale of enterprise assets worth up to $10B.
- The move would be a refocus on core business, unloading its data center unit Terremark as well as the former MCI, which provides wireline/Internet for large business customers. Verizon had acquired MCI for $8.4B in 2006.
- Those businesses are suffering in comparison with more nimble cloud competitors amid heavy price competition.
- Citigroup is advising Verizon on a possible sale and CenturyLink (NYSE:CTL) was a bidder earlier this year, sources said. Verizon had prevailed over Qwest (now part of CenturyLink) in the battle to acquire MCI.
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.
Wed, Sep. 30, 5:15 PM
- Sprint (S +2.7%) is going to kick up the cost of its unlimited data plan, formerly $60/month, to $70/month, showing that unlimited data plans may be testing sustainability at the wireless carriers.
- That's still the best U.S. postpaid deal for that plan, and current customers will be grandfathered in at the $60/month rate. The price changes for new customers Oct. 16.
- T-Mobile (TMUS +0.6%) sells an unlimited data plan for $80/month, and AT&T (T +1.5%) and Verizon (VZ -0.1%) don't offer one.
- Sprint CEO Marcelo Claure has alluded to the strain of unlimited data, as well as wishes to bump customers toward the tiered data plans.
- Earlier, Sprint pursued limiting video download speeds, but has removed such restrictions as customers pushed back.
Tue, Sep. 22, 12:46 PM
- Traffic checks of U.S. wireless carriers by Pacific Crest's Michael Bowen show slowness for the leaders and some momentum for challengers.
- Verizon (VZ -1%) was "slow" and AT&T (T -0.9%) "somewhat weak" in the past month heading into a key iPhone announcement. Verizon saw a lower amount of pre-orders for the iPhone and was coming off a data plan re-sizing; AT&T is lower-key about pushing phone upgrades, though tablet promotions are going well and customers are responding to DirecTV bundles.
- Meanwhile, promotions are bearing fruit at T-Mobile (TMUS -1.9%) and Sprint (S -1%). T-Mobile traffic was "strong," Bowen says, with employees optimistic about iPhone pre-orders and new financing plans. Meanwhile, most Sprint stores met or beat August goals and expect the same for September, as the "iPhone forever" leasing plan is showing strong demand.
Mon, Sep. 21, 8:33 PM
- Verizon (VZ +0.5%) could go for a lease of Dish Network's (DISH +2.4%) valuable spectrum haul by the end of this year, analysts at New Street Research believe.
- At Goldman Sachs' Communacopia conference last week, Verizon chief Lowell McAdam signaled that the company would be interested in talking with Dish about the airwaves, including a megabytes-for-spectrum swap. "Verizon seemed to shift their tone on Dish's spectrum last week, which we think potentially sets up a transaction between now and year end," writes New Street.
- The analysts think it would be difficult for Verizon to pay cash for the lease considering its debt. They believe Dish's spectrum is worth $63B, with the AWS-3 and AWS-4 airwaves worth $53B in themselves.
- The timing of the deal could be accelerated by a likely quiet period that the FCC could impose over spectrum negotiation, from the end of this year until mid-2016.
- The FCC is planning a broadcast incentive spectrum auction for March 29.
Fri, Sep. 18, 5:43 PM
- Along with delivering expectations of strong customer growth, T-Mobile (TMUS -1.5%) CEO John Legere said the company would aggressively take part in the upcoming broadcast incentive spectrum auction.
- Legere also didn't disappoint when it came to talking down competitors, predicting failure for Verizon's (VZ -1.4%) freshly launching mobile video service.
- "I do think this Go90 could be the biggest debacle," he said at Goldman Sachs' Communacopia. "I mean it's right up there with the Amazon Fire phone, the Facebook phone, you remember that?"
- Another Legere trademark: Opining on consolidation that could include T-Mobile. "You really believe that the Comcast (CMCSA -1.8%) future in wireless is to be an MVNO with Verizon? I mean, give me a break. ... The timing of when the cable players come into the wireless phase — it's purely determined by who blinks first."
- Previously: T-Mobile up as Legere sees 'significant' Q3 customer growth (Sep. 18 2015)
- Previously: Verizon's McAdam: Earnings plateau in 2016, then off to races (Sep. 17 2015)
- Previously: Verizon rolling out Go90 video service in beta program (Sep. 08 2015)
Thu, Sep. 17, 4:11 PM
- Earnings growth may be a ways off for Verizon (NYSE:VZ) -- more from a company transformation than any pressure from competitors, says CEO Lowell McAdam.
- "I see a plateauing, if you will, between '15 and '16," McAdam said at Goldman Sachs' Communacopia conference. "And then I see '17, we move back into the growth trajectory."
- Much of that expectation had been baked in by analysts, but the stock fell 2.3% today just the same.
- He attributed the flatness to digesting change at Verizon: the rise of equipment installment plans ("a big shift from service revenue to total revenue ... the banks have been very supportive of it, but it changes the profile of your cash flows"), the sale of wirelines to Frontier to focus on the Northeast, and its moves with the Go90 video service and acquisitions of AOL and Millennial Media.
- The wireline operations in California, Florida and Texas were "very profitable properties for us and they will do well with Frontier, but we thought we needed to move those into someone else's hands so that we can focus on that Northeast corridor."
Thu, Sep. 17, 1:20 PM
- Dish Network (NASDAQ:DISH) is up 3.7% amid news that it's getting extra time from the FCC on the dispute over its $3B in wireless spectrum auction discounts.
- The FCC had released an order denying the discounts to Dish in August. The agency is giving Dish until Oct. 1 to submit payment or a credit letter, after Dish noted "new and complex business issues" in asking for extra time.
- There's been a hint of buyout chatter around the satellite broadcaster; meanwhile, Verizon's (NYSE:VZ) Lowell McAdam says they'll talk to Dish about spectrum but not buying the whole company.
- Previously: FCC votes to deny Dish Network $3.3B in small-business credit (Aug. 17 2015)
- Previously: Dish's Ergen: May not keep spectrum haul if discounts denied (Aug. 05 2015)
Tue, Sep. 15, 4:49 PM
- AT&T (T +0.9%) and Verizon (VZ +1.6%) have both said they're amping up their footprint in Best Buy stores, meaning more products and more service.
- Verizon's begun its expansion already, and plans to have 100 locations done by month's end. The areas are "geared to showcase connected lifestyles – such as wearable tech, computing on the go and connected home – and the devices and plans that make these lifestyles a reality," said Verizon's John Colaiuti.
- Both companies plan to have expanded their new approaches to all 250 stores by the end of 2015.
- Meanwhile, in a review of U.S. wireless firms, Morgan Stanley has reiterated its Overweight rating on Verizon, and an Equal Weight rating on AT&T.
Thu, Sep. 10, 4:43 PM
- Cablevision Systems (CVC -2.7%) is up more than 32% YTD, but Citigroup's sticking to its "contrarian" view that its movement of late is based on unlikely acquisition hopes.
- The firm's Jason Bazinet has a $21 price target on the shares along with a Sell rating. Shares closed today at $27.29 -- an implied downside of 23%.
- The stock's performance, he says, may be due to investor hopes that Altice (OTCPK:ATCEY) -- the french telecom that acquired Suddenlink -- could snap up Cablevision. But Citigroup thinks a target of the FiOS/wireline business of Cablevision competitor Verizon (NYSE:VZ) is far more likely.
- Without a sale, though, he figures fair value at $18/share for Cablevision, vs. $34/share with a sale.
- That's due to the firm's 25% probability of an Altice acquisition: "In effect, if Altice acquires Cablevision, we see $6 upside to the stock. But, if Altice acquires Verizon [wirelines], we see $10 downside in Cablevision's shares. That's a risk-reward we don't find attractive." In any case, CVC won't trade sideways, he says, with some kind of sale likely eventually.
- Previously: Cablevision up 7.2% as buy-minded Drahi drops name (Jul. 10 2015)
- Previously: Cablevision up 11% following Altice/Suddenlink tie-up (May. 20 2015)
Tue, Sep. 8, 9:17 PM
- Verizon's (VZ +2.4%) Go90 app is rolling out in beta, promising hours of free video content to users no matter their wireless subscriber -- and also stoking hopes of getting subscribers hooked on still-expensive mobile data.
- Video streaming in 4G takes up about 350 MB/hour, which would eat up the allotment in Verizon's smallest plan (1 GB) in no time.
- A successful launch will also mean a chance to sell millennial-focused advertising, though the service will not use ad-tech from AOL (at least, not yet; the AOL purchase was considered a key part of any upcoming video service).
- Verizon has no plans to offer a subscription-based Go90, though it may grow from being only a mobile app to TV-connected platforms.
- Previously: Verizon announces ambitious 5G timetable; to start field tests next year (Sep. 08 2015)
Thu, Sep. 3, 9:15 AM
- Less than two months after TechCrunch reported a deal could happen, Verizon-owned (NYSE:VZ) AOL has announced it's acquiring mobile ad network owner Millennial Media (NYSE:MM) for $1.75/share, or $248M. The price represents a 30.6% premium to Millennial's Wednesday close, but is still well below a 52-week high of $2.40, and over 90% below Millennial's 2012 highs.
- The deal expands AOL's supply-side (publisher-facing) mobile ad footprint, including within international markets. Millennial claims over 65K apps are on its platform, and that it has over 800M "proprietary, anonymous user profiles" for ad targeting. It follows AOL's display ad deal with Microsoft, and comes ahead of the launch of Verizon's Go90 mobile video service.
- For Millennial, the deal provides an exit for a company that has been losing mobile ad share to the likes of Google, Facebook, Apple, and Twitter. It's expected to close this fall.
- MM +30% to $1.74.
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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