Apr. 7, 2014, 10:45 AM
- With all signs suggesting U.S. regulators remain opposed to a Sprint/T-Mobile USA merger in spite of Masayoshi Son's PR campaign, rumors have emerged SoftBank (SFTBF) will turn its sights on acquiring Vodafone (VOD +0.9%) if its efforts to fuse the #3 and #4 U.S. carriers are thwarted.
- It's worth noting Vodafone ($96B market cap) would be much harder for SoftBank ($87B) to digest than T-Mobile ($26B). If it was to try, SoftBank would doubtlessly make use of its 37% stake in soon-to-be-public Alibaba (could have a $50B+ pre-tax value).
- Sprint (S -2.6%) and T-Mobile (TMUS -1.5%) are seeing moderate declines.
Mar. 27, 2014, 11:52 AM
- SoftBank's (SFTBF) $3.17B sale of Japanese mobile ISP eAccess to Yahoo Japan is fueling speculation the Sprint (S +3.6%) parent is raising funds for a T-Mobile USA (TMUS +1.4%) bid.
- In spite of regulatory pushback, SoftBank's Masayoshi Son continues to press his case for a deal. "A duopoly is taking over our country," he declared today at an industry trade show. "if you look at [the past] five years … it is a fact that those two big companies increased [their market share] from 56% to 73%. What happens in the next five years?"
- T-Mobile's recent share gains (following years of losses) might have regulators thinking the next five years could go differently than the last five. The ripple effects of the #4 carrier's aggressive pricing might also influence their thinking.
- Son has promised he'd launch a "price war" if a Sprint/T-Mobile deal was approved, and that the merged carrier would act as a last-mile broadband rival to cable/phone duopolies - that could be easier said than done in densely-populated urban areas.
Mar. 21, 2014, 1:52 PM
- As part of the restructuring taking place at parent SoftBank's behest, Sprint (S +1.1%) is closing 55 of its worst-performing retail stores and 150 service/repair centers, and laying off 330 technical consultants.
- In January, Sprint disclosed it had begun conducting layoffs, and would record $165M in Q4 charges related to them. Since then, the carrier has announced it's cutting 1.5K customer service jobs.
- Sprint's headcount currently stands at ~40K.
Mar. 11, 2014, 10:47 AM
- Ahead of a big speech at the U.S. Chamber of Commerce, SoftBank's (SFTBF, SFTBY) Masayoshi Son is promising a "massive price war" if skeptical regulators allow Sprint (S +0.7%) to merge with T-Mobile USA (TMUS +2.4%).
- As expected, Son also insists Sprint and T-Mobile, who between them have a giant portfolio of high-frequency spectrum assets, could act as a credible last-mile broadband rival to phone/cable duopolies if they joined forces.
- AT&T (T -0.8%) and Verizon (VZ -0.6%) are ticking lower, while Sprint and T-Mobile are up moderately. AT&T has already been cutting prices to counter T-Mobile's aggressive moves - moves that have contributed to FCC/DOJ doubts about the merits of a Sprint/T-Mobile deal.
- Verizon, for now, is refusing to take part in a price war, and betting its service quality and unmatched 4G coverage will lead its pospaid subs to continue paying a premium.
- Yesterday: U.S. mobile roundup
Mar. 10, 2014, 2:54 PM
- AT&T (T -0.3%), which unflinchingly stuck with a premium pricing strategy for years, has announced yet another price cut for its Mobile Share plans (previous), as it tries to fend off a share-gaining Verizon and a resurgent T-Mobile.
- The price of Ma Bell's low-end 2GB Mobile Share plan has been cut by $15/month. The base price for a single user is now $40/month; adding a smartphone via AT&T's Next upgrade plan adds $25/month to the bill. Opting for a traditional phone subsidy/contract instead of Next costs $40/month.
- T-Mobile (TMUS +0.3%) , meanwhile, has simultaneously increased its data allotments for cheaper postpaid plans - a $50/month plan featuring unlimited voice/text now provides 1GB of data, up from 500MB - and hiked the price of its unlimited data offering by $10 to $80/month.
- Verizon (VZ -0.5%), which has offered some minor price cuts and promotions lately, insists it won't depart from its premium pricing strategy. CFO Fran Shammo: "We’re not going to buy customers ... You have to earn customers." Shammo also reiterates Verizon's support for subsidies (and with them, service contracts), and says the carrier will take a cautious approach to installment plans.
- Bloomberg reports SoftBank's (SFTBF, SFTBY) Masayoshi Son, facing regulatory opposition to his plans for a Sprint (S +0.4%) bid for T-Mobile, will shift from arguing a merger is needed combat Verizon/AT&T to arguing a deal will allow Sprint/T-Mobile to act as a last-mile broadband alternative to phone/cable duopolies. Son is due to make a speech tomorrow.
Mar. 7, 2014, 9:29 AM
- Sprint (S) network infrastructure chief Bob Azzi and product development/operations chief Steve Elfman are leaving the company, as SoftBank (SFTBF, SFTBY) continues shaking up the carrier's executive ranks. Ex-Clearwire CTO John Saw has been named Sprint's chief network officer.
- Sprint's sales and marketing chiefs left last October. A possible factor behind the latest moves: Sprint has seen widespread service quality complaints - Consumer Reports ranked it last among U.S. carriers in 2013 - as it moves aggressively to migrate users to its 4G LTE network.
- Another potential trigger: Sprint's LTE buildout is slightly behind schedule. The carrier originally planned to offer LTE coverage to 250M POPs by the end of 2013, but later lowered its target to 200M.
Mar. 6, 2014, 1:49 PM
- "I don’t want to insist on [U.S. mobile] consolidation, but I don’t want to rule it out," says Deutsche Telekom (DTEGY, DTEGF) CEO Tim Hoettges.
- The remarks come after Hoettges reportedly told DT's board he considers a sale of 67%-owned T-Mobile USA (TMUS -1.8%) unlikely in the near-term, given regulatory opposition to a bid from Sprint (S -3.6%) and parent SoftBank (SFTBF, SFTBY).
- Citing T-Mobile USA's aggressive investments, DT now expects its 2015 free cash flow to only be up "slightly" from 2014 levels. The carrier previously forecast 2015 FCF to rise to €6B ($8.3B) after hitting €4.2B ($5.8B) in 2014.
- Sources tell Bloomberg Hoettges is now "taking a long-term view in the U.S.," and is focused on converting more of T-Mobile's giant prepaid base into postpaid subs.
- DT shares fell 3.6% in Frankfurt. Both T-Mobile and Sprint are selling off in U.S. trading.
- More on Sprint/T-Mobile
Mar. 5, 2014, 4:03 PM
- Deutsche Telekom (DTEGY, DTEGF) Tim Hoettges says a sale of 67%-owned T-Mobile USA (TMUS +0.1%) is unlikely anytime soon. T-Mobile and Sprint (S -0.5%) have both moved moderately lower in response.
- The WSJ reported yesterday SoftBank's (SFTBF, SFTBY) Masayoshi Son plans to mount a PR campaign to convince skeptical businesses and policy makers regarding the value of a Sprint/T-Mobile merger.
- Sprint/SoftBank have been widely reported to be lining up financing for a T-Mobile bid.
Mar. 4, 2014, 2:02 PM
- With FCC/DOJ regulators strongly suggesting they'll oppose any attempt by Sprint (S +3.1%) to merge with T-Mobile USA (TMUS +3.6%), SoftBank's (SFTBF, SFTBY) Masayoshi Son "plans to appeal directly to the U.S. business community and policy makers" to convince them the deal would be good for customers, the WSJ reports.
- Crucial to Son's effort: Convincing his audience Verizon and AT&T currently have a de facto U.S. mobile duopoly, one that Sprint and T-Mobile can't challenge independently.
- Likely to hurt his cause: T-Mobile is now rapidly adding postpaid subs (after losing them for years) with the help of innovative pricing schemes, and regulators reportedly fear a Sprint merger could affect T-Mobile's "maverick" status within the industry.
- Sprint and T-Mobile are both outperforming today. Son plans to make a major presentation on March 11 at the Chamber of Commerce in Washington D.C.
- More on Sprint/T-Mobile
Feb. 12, 2014, 10:20 AM
- Deutsche's Brett Feldman has upgraded Sprint (S +1.4%) to Buy following yesterday's Q4 report, albeit while leaving his PT unchanged at $9.25. He cites Sprint's spectrum advantage (presumably a reference to its high-frequency assets following the Clearwire deal), and the carrier's 2-year EBITDA growth outlook.
- However, Feldman still expects major subscriber losses in 1H14, followed by "a return to modest growth" once Sprint's Network Vision 4G initiative is finished. He's also skeptical a T-Mobile USA (TMUS +0.4%) deal will happen in light of regulatory concerns.
- But while regulators continue signaling their skepticism, SoftBank's (SFTBF) Masayoshi Son appears undeterred in his quest to merge the #3 and #4 U.S. U.S. mobile carriers. Son tells the WSJ it would be "a dream within a dream" to challenge Verizon and AT&T without the scale provided by an acquisition. "I can't settle for No. 3 or No.2. It's my personality."
- Recent WSJ and Bloomberg reports suggested Sprint/SoftBank are weighing their options in the wake of recent DOJ/FCC comments.
Feb. 11, 2014, 9:34 AM
- Sprint (S +7.2%) saw a net gain of 682K mobile platform subs in seasonally strong Q4 - 58K postpaid, 322K prepaid, 302K wholesale/affiliate. Though that figure is well below Verizon and T-Mobile's Q4 net adds, and moderately below AT&T's, it represents a turnaround from Q3's 95K net loss (includes a loss 360K postpaid subs).
- The #3 U.S. carrier is also guiding for 2014 adjusted EBITDA of $6.5B-$6.7B, up from a 2013 level of $5.4B and a 2012 level of $4.8B. Q4 adjusted EBITDA margin was 14.5%, up from the year-ago period's 10.3%.
- Mobile service revenue rose 2% Y/Y to $7.15B, equipment revenue (phone/tablet sales) rose 15% to $1.16B. SG&A spend was nearly flat at $2.44B.
- Postpaid ARPU was $64.11, down slightly from $64.24 in Q3 and $64.17 a year ago. Postpaid churn rose to 2.07% from 1.99% in Q3 and 1.98% a year ago.
- Sprint's wireline division saw revenue drop 9% to $859M. Its op. income fell to $23M from $71M.
- With parent SoftBank (SFTBF) willing to spend aggressively to improve Sprint's 4G coverage, Sprint has set a 2014 capex budget of $8B, up from a 2013 level of $7.5B and a 2012 level of $5.4B.
- Q4 results, PR
Feb. 11, 2014, 9:10 AM
Feb. 11, 2014, 7:31 AM
Feb. 10, 2014, 3:07 AM
- Sprint (S) is rethinking its attempt to buy T-Mobile US (TMUS) from Deutsche Telekom (DTEGF) after the Justice Department and the FCC expressed skepticism that the acquisition would be allowed, the WSJ reports.
- Sprint could still try to purchase T-Mobile, but executives will take their time in order to refine their strategy and antitrust arguments.
Feb. 6, 2014, 11:16 AM
- After rallying yesterday on a report Sprint (S -6.1%) is close to lining up $45B in financing for a T-Mobile USA (TMUS -5.4%) bid, Sprint and T-Mobile are selling off following a Bloomberg report stating FCC/DOJ regulators have "resisted the concept" of a merger between the carriers in preliminary talks with SoftBank's (SFTBF) Masayoshi Son, and that Son and Sprint's Dan Hesse now "plan to decide in the next few weeks whether to move ahead on a bid."
- Bloomberg adds Deutsche Telekom (DTEGY) has asked Son to "gauge regulatory sentiment" towards a merger, and that Son and DT's perception of regulatory feedback will "determine their next steps."
- In addition, SoftBank and DT are reportedly at odds over the breakup fee for any deal - SoftBank wants a small one on account of regulatory risks, DT feels differently.
- FCC and DOJ officials have already suggested they're skeptical about backing a merger between the #3 and #4 U.S. mobile carriers. While Sprint might argue the carriers need to merge to effectively compete against Verizon/AT&T, T-Mobile's recent share gains bring that claim into question.
- More on Sprint/T-Mobile
Feb. 6, 2014, 12:05 AM
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