Thu, Apr. 9, 9:08 PM
- Don't let recent merger challenges and failures fool you, Michael Wolff argues: "M&A mania" is coming to a media conglomerate near you amid pressure for a new wave of consolidation.
- "Perhaps never before has consolidation been so much the flavor of the month, nor has it seemed so difficult to get a taste," he writes. "The table is set, but nobody's sitting down to eat."
- If Comcast (NASDAQ:CMCSA) fails in its bid for Time Warner Cable (NYSE:TWC), he notes, it just means other cablers will step up to match Comcast's ambition, and Comcast will still look for a way to stay dominant.
- He points to a number of mergers he thinks are easily imaginable: Viacom (NASDAQ:VIA) and FOX? Disney (NYSE:DIS) and Time Warner (NYSE:TWX)? TWC and Charter (NASDAQ:CHTR)? Discovery (NASDAQ:DISCA) and, well, most anyone (Disney, Fox, CBS)?
- Factors encouraging the wave: Media's all about video now, and the pure-play aspect makes merger logic cleaner; distribution and content are separate and now even antagonistic businesses; the growth of over-the-top means not unbundling but re-bundling; and everyone needs scale for negotiation strength in content and ad deals.
- Other key players: John Malone (LMCA, LBTYA, STRZA); Verizon (NYSE:VZ); Lions Gate (NYSE:LGF); Scripps Networks (NYSE:SNI); Netflix (NASDAQ:NFLX); DirecTV (NASDAQ:DTV) and AT&T (NYSE:T); Dish Network (NASDAQ:DISH).
Wed, Apr. 8, 3:38 PM
- AT&T (NYSE:T) will pay $25M to settle with the FCC over an alleged privacy breach at three of its international call centers -- the FCC's largest ever enforcement action.
- The agency started investigating a 168-day data breach last May. The FCC alleged that three employees at a call center in Mexico got paid by third parties to provide customer information.
- AT&T told the FCC it also had data breaches in Colombia and the Philippines, involving 40 employees and affecting some 211K customer accounts.
- Along with the fine, AT&T is paying for credit monitoring services for affected accounts and is changing policies to strengthen its security.
Tue, Apr. 7, 11:49 AM
- As expected, AT&T's (NYSE:T) $49B purchase of DirecTV (NASDAQ:DTV) is headed for an easier approval than Comcast's takeover of Time Warner Cable -- and the AT&T deal may wrap before April is through, with a few "action packed" weeks ahead, says Morgan Stanley's Simon Flannery.
- Flannery sees limited opposition to the deal, though he does warn about risks including AT&T's leverage in the deal and its recent $18B purchase of wireless spectrum.
- But the purchase may have taken too long -- way too long in coming, says analyst Craig Moffett, since the deal is "oh so 2005."
- "There was a certain logic to it at the time," Moffett says, pointing out that buying a satellite distribution arm would have been better 10 years ago, when Verizon was building a future-proof fiber network and AT&T's network limitations were clear even then.
- "Don't get us wrong. DirecTV is a well-run asset," Moffett writes, "with a sterling brand and strong management, and the company's free cash flow will clearly help sustain AT&T's dividend. But it is hard to make the case for genuine strategic fit between the two companies."
- Previously: With regulator eyes on Comcast-TWC, is AT&T's DirecTV purchase skating? (Mar. 17 2015)
Sun, Apr. 5, 9:18 AM
- T, PM, VZ, DUK, STX, GM, GE, MCD, CAT and DOW are 10 “high-quality” S&P 500 stocks with dividend yields of 3.5-5.7% and promising growth potential, Barron’s says, citing Howard Silverblatt of Standard & Poor’s Financial Services.
- 60 companies in the S&P 500 yield 3.5% or more, but the above stocks cover their dividends from estimated 2015 earnings. The list also excludes REITs and MLPs.
Sun, Apr. 5, 8:47 AM
- Google (NASDAQ:GOOG) is in talks with Hutchison Whampoa (OTCPK:HUWHY, OTCPK:HUWHF) for a deal that would allow Americans to use their phones abroad at no extra cost. Hutchison could give Google access to mobile service in the UK, Ireland, Italy, and several more markets.
- Google's goal, sources say, is to create a global network with the same cost for calls, texts, and data no matter where a customer is located. Hutchison would be a natural partner for Google, because it has also sought to eliminate roaming charges for its customers.
- Google has so far described its mobile network aspirations as "small scale." A serious move by Google or Apple to enter the mobile market would be feared by U.S. giants AT&T (NYSE:T), Verizon (NYSE:VZ), Sprint (NYSE:S) and others.
Thu, Apr. 2, 4:26 PM
- Over-the-top video services seems to have accelerating momentum as more unbundling happens every week, but high-yield pay-TV companies have little to worry about just yet, Moody's says in a new report.
- Customer inertia along with the limited competition they now face should buy providers time to adjust.
- "Evolutionary, not revolutionary" is how the firm describes the pay-TV shift, saying that OTT providers, including Sony and Apple, will take a small number of subscribers for now -- even though consumer perception seems to favor OTT options.
- The firm notes rising bills could force defections, but "the average customer may not realize how much content traditional pay TV service provides, from video on demand and across multiple devices."
- Pay TV stocks today: (CMCSA +1.5%), (TWC +1.9%), (CVC +0.9%), (CHTR -0.6%), (T +0.7%), (VZ +1.1%)
Thu, Apr. 2, 11:29 AM
- Comcast (CMCSA +1.3%) isn't sitting (entirely) idle in the broadband speed race -- at least not in Atlanta.
- After Google amped up pressure on broadband speeds by launching its Fiber gigabit service project, and AT&T (NYSE:T) started followed up with more gigabit investment, Comcast is planning 2 Gbps symmetrical service in Atlanta, which would be the fastest residential service in the U.S.
- Still unknown, though, are the cost of the "Gigabit Pro" service -- the company charges $400/month for existing 505-Mbps service -- and any expansion plans outside Atlanta. Google Fiber is available in Kansas City; Austin, Texas; and Provo, Utah, at broadband cost of about $70/month.
- Both Google and AT&T have plans to expand their gigabit service to Atlanta.
- Comcast's service would be twice as fast as Google's and AT&T's, and four times as fast as Verizon FiOS Quantum, which comes in an $85 Internet/TV package.
Fri, Mar. 27, 8:58 PM
- Glenn Lurie, CEO of AT&T Mobility (NYSE:T), says he's not worried about the outcome if Sprint (NYSE:S) and T-Mobile (NYSE:TMUS) -- third and fourth in the U.S. wireless market behind AT&T and Verizon (NYSE:VZ) -- decide to merge.
- "We are a very, very different company than the other three," he tells FierceWireless. "So whatever happens with them, I'm not really that concerned. I'm concerned about how we execute and how we operate."
- His No. 1 goal, Lurie says, is to reduce churn and preserve the company's current subscribers in order to upsell other services.
- Chatter continues to suggest that Sprint and T-Mobile may have to think about combining to achieve competitive scale, and in the meantime they're firing salvos in a price war that Lurie says AT&T won't join: "This industry is not commoditized at all."
- Previously: Goldman upgrades T-Mobile; DT reiterates merger wish (Jan. 20 2015)
Fri, Mar. 27, 2:14 PM
Mon, Mar. 23, 4:34 PM
- In the wake of loud complaints from competitors about Dish Network's (NASDAQ:DISH) wireless spectrum bidding strategy -- using small-business partners to draw a 25% discount as "designated entities" -- the FCC is edging closer to reforming the process, Reuters reports.
- After being called to Congress and promising to "fix" the bidding rules, FCC Chairman Tom Wheeler is circulating a document to fellow commissioners to discuss specifics on how to reform the program.
- In particular, AT&T (NYSE:T), Verizon (NYSE:VZ) and T-Mobile (NYSE:TMUS) complained of "distortion" in the bidding process created by Dish's practice of bidding through its DEs.
- While using DEs is common practice, the size of that auction meant that Dish saved billions via the 25% discount.
- The recent AWS-3 spectrum auction drew a record $45B -- but a "low-band" auction coming next year may be even more crucial to the industry competitors, as that spectrum is key to the ability to stretch wireless signal further into buildings.
- More on FCC auctions
Wed, Mar. 18, 2:20 PM
- At its latest "un-carrier" marketing event, T-Mobile (TMUS +0.6%) started taking the price war to business, pushing low-cost plans for small and medium businesses that are about half that of rivals AT&T (NYSE:T) and Verizon (NYSE:VZ).
- The company is launching a plan that offers switching companies a rate of $15/line for 20-plus lines, featuring unlimited talk and text and 1 GB of data, upgradeable to unlimited data for $30. The price drops to $10/line for 1,000 or more.
- It's also picking up device costs (up to $650) for switchers.
- T-Mobile is the smallest of the big four wireless providers, but CEO John Legere says it's not making desperation moves: "This is not a diving, 'hail mary' pass for us -- we're growing like crazy," he says in Q&A. "This is logical, planned growth."
- IDC says T-Mobile increased its share in business services to 10% from 3% last year.
- Legere also pointed to the importance of the coming lowband spectrum auction: "That [recent AWS-3 auction] wasn't an important auction for us. The lowband is."
Tue, Mar. 17, 2:03 PM
- With the proposed merger of Comcast (NASDAQ:CMCSA) and Time Warner Cable (NYSE:TWC) getting all the oxygen from the post-net-neutrality FCC, the $48.5B deal that AT&T (NYSE:T) has to acquire DirecTV (NASDAQ:DTV) appears to be getting a relatively free pass.
- Both deals will create a company controlling more than a quarter of pay TV -- so it may be Internet access that's drawing extra scrutiny. The combined Comcast-TWC company would serve high-speed Internet to almost 40% of Americans.
- Even FCC petitions opposing the deals are telling: 20 against Comcast-TWC, five against AT&T-DirecTV. And 88,000 brief comments opposing Comcast-TWC, 14,000 opposing AT&T-DirecTV.
- One critic of the T-DTV deal told Reuters that Justice Department reviewers responded in a meeting with "few questions" and "blank stares."
- Today: CMCSA -0.7%; TWC -1%; T +0.1%; DTV +0.2%.
- Previously: FCC pauses review of Comcast-TWC, AT&T-DTV; likely weeks away (Mar. 13 2015)
- Previously: Brean downgrades DirecTV to Hold; AT&T offer priced in (Feb. 23 2015)
Fri, Mar. 13, 5:57 PM
- More in a growing series of moves from America's No. 3 and No. 4 carriers to cut into the share of AT&T (NYSE:T) and Verizon (NYSE:VZ) ...
- T-Mobile (NYSE:TMUS) is offering selected customers a free upgrade to unlimited 4G LTE for the rest of 2015. The customers are getting a text link to a page describing their upgrade. However, those customers will lose their rollover Data Stash unless they opt out of the freebie.
- In a boundless push for customers, Sprint (NYSE:S), meanwhile, is upping the ante on its aggressive pricing by offering to pay all of a customer's costs to switch to them -- remaining phone installments, termination fees, regardless of the amount. The company is requiring that you turn in your current phone and a bill showing the charges due.
- Previously: With declining postpaid ARPU, Sprint eyes customer growth (Feb. 05 2015)
Fri, Mar. 13, 4:28 PM
- As signaled before, the FCC has paused the 180-day "shot clock" on reviewing two megamergers -- Comcast's (NASDAQ:CMCSA) deal for Time Warner Cable (NYSE:TWC), and AT&T's (NYSE:T) deal to buy DirecTV (NASDAQ:DTV) -- as it's tied up with another case over programming contracts.
- The review of the deals was set to expire by the end of March, but now may take somewhat longer, likely several more weeks.
- The cause is the ongoing dispute with programming firms -- Disney (NYSE:DIS), CBS, Twenty-First Century Fox (NASDAQ:FOXA), Viacom (VIA, VIAB) and others -- over whether third parties commenting on the mergers will get access to private documents containing sensitive pricing and strategy information.
- The FCC has argued it has sufficient protections to keep those details from getting out. But the merger reviews now appear to be dependent entirely on that case's timetable.
- "In reaching this conclusion, the commission reserves the right to restart the clock as it believes will best serve the public interest," the FCC said.
Thu, Mar. 12, 11:11 PM
- The FCC released its lengthy order on net neutrality and Title II regulation today, starting a timetable to get it into the Federal Register and then a 60-day period to put the rules into effect.
- Overall, the 400-page order leaves some case-by-case room for the agency to work out a few details along the way.
- The order may have been most anticipated by telecom lawyers (T, VZ), who may be preparing their lawsuits for just over 60 days from now.
- Notable news is that the agency doesn't just plan some forbearance on Title II regulation (involving treating Internet carriers as a public utility), but vast forbearance, in what seems an industry-friendly move; the focus from here may be on the details of just how much is actually "vast."
- Interconnection (governing traffic exchange agreements; key to NFLX) and sponsored data programs are subject to case-by-case review rather than the bright-line rules -- suggesting a light hand from the agency on such deals, for now.
- Industry reaction from NCTA (Cableco trade group): "Confirms our fear that the Commission has ... instituted a regulatory regime change for the Internet that will lead to years of litigation, serious collateral consequences for consumer, and ongoing market uncertainty."
- AT&T (NYSE:T): "Ultimately, though, we are confident the issue will be resolved by bipartisan action by Congress or a future FCC, or by the courts."
- Netflix: "The FCC’s order is a step toward ensuring Americans get the Internet access they pay for and content providers like us have recourse from broadband monopolists demanding what the FCC called 'unfair tolls.' "
- Also: the FCC's municipal broadband preemption order
Wed, Mar. 11, 8:34 PM
- Digitalsmiths -- the data research company owned by TiVo (NASDAQ:TIVO) -- has a white paper out suggesting that 1.5M Americans plan to cut the cord and ditch their pay television service, while another 38.1M are dissatisfied -- two-thirds of those because of the cost.
- The report -- based on its sample of more than 3,000 subscribers -- says 8.9% switched pay-TV providers in the prior three months, up 2.1% Y/Y.
- Another interesting number: 78.7% of respondents watch 10 channels or fewer -- which has to make future cord-cutters wonder what they're really paying for.
- While the report is largely bad news for pay TV, parent company TiVo is marketing devices both for cord-cutters and for its pay-TV partners. And 20.4% of survey takers recently upped the level of their pay service. (hat tip: FierceCable)
- Pay TV stocks today: CMCSA -1.1%; TWC -0.5%; CVC -1%; CHTR +0.7%; T -0.5%; VZ +0.4%.
T vs. ETF Alternatives
AT&T Inc, through its subsidiaries and affiliates, provides wireless and wireline telecommunications services in the United States and internationally. The Company has three reportable segments: Wireless, Wireline, and Other.
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