Jan. 7, 2014, 6:29 PM
- Showing a clear disregard for both traditional family plans and the English language, Sprint (S) has launched its "Framily" plan, a program that gives groups of 2-10 friends and family members the ability to obtain discounts by signing up together (they're still billed separately). (PR)
- $5/month in savings is provided to each user for every line that's added to a plan, up to a maximum of $30/month. Sprint notes users in a group of 7-10 people would pay just $25/month for unlimited talk/text and 1GB of data. However, users can't obtain phone subsidies along the way.
- Sprint and T-Mobile (TMUS) have become increasingly aggressive with their pricing over the last year, as they pull out all the stops to take share from bigger rivals Verizon (VZ) and AT&T (T).
- AT&T is showing signs it's willing to return fire a bit, but Verizon, by far the biggest U.S. mobile share-gainer in 2013, appears fully committed to its premium pricing strategy.
- T-Mobile's Un-Carrier 4.0 event, expected to feature the launch of a program providing credit that can be used to pay off termination fees, is set for tomorrow.
Jan. 3, 2014, 2:49 PM
- S&P has become the fourth firm to downgrade Sprint (S -4.2%) over the last two days, cutting shares to Sell. Shares are off 7% over the first two trading days of the year, but still up 22% since the first report of a possible T-Mobile USA bid arrived.
- Stifel's Chris King, who downgraded Sprint to Sell this morning, joins many others in expressing skepticism a Sprint/T-Mobile deal will be approved by regulators, given the DOJ's preference to have four nationwide carriers and the DOJ/FCC's likely wish to have T-Mobile remain an independent "maverick" carrier.
- King also argues Sprint "remains at an operational disadvantage to AT&T/Verizon, and thinks the company "will continue to struggle to add a significant number of postpaid subscribers in the near-term."
- Moreover, he believes Sprint's current valuation - 11.1x 2014E EBITDA - "appears extended," even though he does expect margins to rise significantly over the next two years thanks to the shutdown of the Nextel iDEN network and Sprint's Network Vision project (aims to consolidate multiple networks and ramp 4G coverage).
Jan. 3, 2014, 9:32 AM
- Sprint (S -4.1%) has been cut to Sell by Stifel. Cowen and Macquarie downgraded shares yesterday in response to the carrier's big December run-up.
- Infosys (INFY +2.7%) has been upgraded to Overweight by HSBC; FQ3 results are due on Jan. 10.
- Finisar (FNSR +3.3%) has been upgraded to Strong Buy by Raymond James.
- Maxim (MXIM +1.5%) has been upgraded to Outperform by BMO.
- AppliedMicro (AMCC -2.9%) has been cut to Market Perform by BMO.
- Sierra Wireless (SWIR -2.1%) has been cut to Equal Weight by Stephens.
Jan. 2, 2014, 9:42 AM
- Sprint (S -3%) has been cut to Market Perform by Cowen, and to Neutral by Macquarie, following a major run-up fueled in part by T-Mobile M&A hopes.
- T-Mobile (TMUS -1.5%), meanwhile, has been pulled from Goldman's Conviction Buy list. Its shares have taken off in response to reports Sprint and Dish are mulling bids.
- Xilinx (XLNX +1.1%) has been upgraded to Buy by Goldman, and rival Altera (ALTR -1.8%) has cut to Neutral.
- UniPixel (UNXL -4.4%) has been cut to Market Perform by Cowen following the departure of its CEO and COO.
- Intersil (ISIL -4.9%) has been cut to Underweight by Evercore.
- NXP (NXPI -4.3%) and ON Semi (ONNN -4.7%) have been cut to Neutral by Goldman, and fellow chipmaker Analog Devices (ADI -2.5%) has been cut to Sell. ADI has also been cut to Market Perform by Wells Fargo.
Dec. 31, 2013, 11:10 AM
- Six months after Sprint (S +1.6%) shut down its antiquated Nextel iDEN network, a source tells TechCrunch the carrier is looking to reintroduce the Nextel brand to help underpin its business services. Also, Sprint is said to be planning to merge its Boost and Virgin Mobile prepaid brands into a new prepaid brand called Sprint Freedom.
- The Nextel brand's reintroduction is said to be part of a larger push to reel in business users, one that will also feature more streamlined pricing and the promotion of Sprint's high-speed Spark 4G LTE service (available for now in just a few markets). Sprint's share of U.S. corporate/institutional mobile accounts badly trails that of market leaders Verizon and AT&T.
- Sprint has been competing better in the prepaid market, but competition in this space has been intensifying, thanks largely to the T-Mobile/MetroPCS merger and new prepaid offerings from AT&T (about to acquire prepaid carrier Leap Wireless).
Dec. 27, 2013, 4:34 PM
- Jefferies' Mike McCormack notes multiple Web sources indicate T-Mobile USA's (TMUS +1.2%) Jan. 8 "Un-Carrier 4.0" event will involve the launch of a promotion in which the carrier will offer to pay off the early termination fees of consumers switching from rivals and trading in their old phones.
- One report states T-Mobile will offer up to $350 in credit to smartphones users, and $200 in credit to feature phone users.
- McCormack worries T-Mobile is "opening a Pandora's box, leading to intensified competition from larger peers that have better scale and higher profitability." That's a reference to AT&T (T +0.1%) and Verizon (VZ), and perhaps to a lesser extent Sprint (S +8.3%).
- In addition to potentially increasing churn at rival carriers and compelling them to respond with similar promotions, T-Mobile's move could lead rivals to offer early subsidies in an effort to keep customers in the middle of contracts from switching. AT&T and Verizon have been trying hard to reduce subsidy expenses via service plan and policy changes.
- Over the last 10 months, T-Mobile has already eliminated contracts/subsidies in favor of phone installment plans, rolled out a smartphone upgrade program (leading peers to do the same), and launched cheap data roaming and international calling services.
Dec. 27, 2013, 12:07 PM
- Following today's big gains, Sprint (S +8.2%) is up 32% since the WSJ reported on Dec. 13 the carrier and parent SoftBank are weighing a 2014 bid for T-Mobile USA.
- Short-covering could be contributing to Sprint's gains: 12.5% of the carrier's float was shorted as of Dec. 13.
- Shares got a lift yesterday from a Wells Fargo note highlighting the value of Sprint's spectrum, and noting the potential of a T-Mobile deal to product major cost synergies.
- More on Sprint/T-Mobile
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.
Dec. 19, 2013, 2:21 PM
- SandRidge Energy (SD +2.6%) spikes after Leon Cooperman lists it as one of his five favorite stocks, citing the company's "fundamentally improving trend" the market has been slow to recognize; he thinks SD has the potential to double to ~$10.
- The hedge fund manager also likes Sprint (S +3.3%) based on the prospect of a potential consolidation with T-Mobile, the U.K.'s Monitise (MONIF +7.8%) as a play on mobile banking, a re-made SunEdison (SUNE +4.8%) which is spinning off its money-losing semiconductor business, and Brazilian healthcare provider Qualicorp (QUAIF).
Dec. 18, 2013, 4:06 PM
- Less than a week after rallying in response to a WSJ report that Sprint (S +2.3%) is considering a bid, T-Mobile USA (TMUS +2.2%) has moved higher on a Reuters report stating Dish (DISH +0.5%) is weighing a bid for the #4 U.S. carrier, and won't stand idly if Sprint makes an offer.
- Charlie Ergen, thwarted this year in his efforts to buy Sprint/Clearwire and still looking to make use of Dish's 4G spectrum, has repeatedly stated he's open to a merger with T-Mobile.
Dec. 18, 2013, 2:22 PM
- "The Committee sees the improvement in economic activity and labor market conditions ... as consistent with growing underlying strength in the broader economy," the FOMC says, adding that the decision to scale back QE by $10B per month is based on "the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions."
- Although the Committee says it will "likely reduce the pace of asset purchases in further measured steps [should] incoming information support [the] ongoing improvement in labor market conditions and inflation moving back toward [the] longer-run objective," the Fed notes that asset purchases are "not on a set course."
- FOMC also says it "anticipates .. that it likely will be appropriate to maintain the current target range for the federal funds rate well past the time that the unemployment rate declines below 6.5%."
- Updated FOMC projections: 2014 PCE inflation now seen at 1.4-1.6% (from 1.3-1.8% in September); 2014 GDP now seen at 2.8-3.2% (from 2.9-3.1% in September); 2014 unemployment rate now seen at 6.3-6.6% (from 6.4-6.8% in September). Full release
- 10-year yield is at 2.91% versus 2.87% just prior to the announcement.
- Dow (DIA +0.9%), S&P (SPY +0.6%), and Nasdaq (QQQ) all staged brief rallies on the news but have since retraced a bit. Gold (GLD +0.3%) fell sharply initially but recovered.
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Dec. 17, 2013, 2:06 PM
- In what might be a sign of things to come, Sprint (S +3.2%) is partnering with Dish (DISH +2.4%) to offer 4G home broadband services in parts of Texas. The service, which relies on Sprint's spectrum, is expected to launch in Corpus Christi in mid-2014, and to eventually expand to other markets.
- Dish, which made a failed attempt earlier this year to buy Sprint and Clearwire, is still exploring options for putting its own 4G spectrum to use. Sprint has hinted it's open to a network-sharing deal with Dish.
- Meanwhile, Centerbridge Partners has backed out of a tentative $3.3B deal to buy bankrupt LightSquared's spectrum. That could pave the way for Dish, which has made a $2.2B bid for the spectrum (in spite of ongoing GPS interference concerns), to win out.
Dec. 13, 2013, 4:41 PM
- Sources tell the WSJ Sprint (S +4.3%) is "studying regulatory concerns" related to a T-Mobile USA (TMUS +8.2%) bid, and that SoftBank (SFTBF) founder/CEO Masayoshi Son is "driving" the effort. However, they caution Sprint hasn't yet decided whether to make a move.
- Deutsche Telekom (DTEGY), which retains a 67% stake in T-Mobile USA, is said to be "looking to possibly exit the U.S. market." Though Deutsche is currently prohibited from selling T-Mobile shares until 18 months have passed from the closing of the MetroPCS deal, it can sell earlier if it received an offer for the entire stake.
- Sprint and T-Mobile only have 53M postpaid subs between them, less than Verizon's 95M and AT&T's 72M. If they try to go through with a merger, they'll mention such figures to regulators early and often.
- But the FCC and DOJ, only two years removed from thwarting AT&T's bid for T-Mobile, haven't given any indication they're now comfortable seeing further consolidation among nationwide U.S. carriers.
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