Seeking Alpha

AT&T Inc. (T)

  • Fri, Feb. 20, 5:03 PM
    • Delays may be in store for two very high profile mergers -- Comcast (NASDAQ:CMCSA) with Time Warner Cable (NYSE:TWC), and AT&T (NYSE:T) with DirecTV (NASDAQ:DTV) -- as a federal court weighs a dispute over an FCC decision to provide deal opponents access to sensitive documents.
    • Content companies are arguing that letting merger opponents like Dish Network (NASDAQ:DISH) see hundreds of thousands of pages on their programming-negotiation pricing and strategies "would be highly damaging."
    • Content lawyer Robert Long says the FCC is "totally unprecedented" in providing the docs; the FCC responds that strong protections are in place and the details about buying power in programming are important in getting informed third-party input to consider approving the deals.
    • Judges reacted with skepticism toward the FCC's argument, but with no inkling of when they might rule, the timetable for the mergers may have to move later.
    • More coverage of Comcast-TWC merger
    • More on an AT&T/DirecTV deal
  • Fri, Feb. 20, 3:02 PM
    • AT&T (NYSE:T) opens a new salvo of criticism of Dish Network (NASDAQ:DISH) over the satellite firm's bidding approach in the record FCC AWS-3 auction, saying it distorted the prices paid.
    • Dish's investment in and use of designated entities -- qualifiers for 25% small-business discounts -- skewed demand for licenses and pushed up their price, says AT&T's regulatory chief Joan Marsh on the company's public policy blog, which it increasingly uses to shape the regulatory conversation: "The Dish entities acting in concert triple- and double-bid licenses in the auction nearly 4,000 times."
    • She says that spectrum not put into service is creating price-hiking scarcity as well. "Post auction, Dish’s spectrum portfolio in the top 100 CMAs will, on average, be 81 MHz deep," Marsh writes. "Yet none of that spectrum is currently supporting commercial wireless services."
    • For its part, Dish issued a post-auction statement reminding critics (including the FCC's Ajit Pai) that it had submitted and OK'd its plans with the commission in advance.
    • AT&T isn't the only firm trying to place the goalposts for a likely more important low-band auction next year; T-Mobile's John Legere also complained about spectrum stockpiling, and has called on the FCC to more heavily restrict participation from AT&T and Verizon.
    • More FCC auction news
  • Thu, Feb. 19, 9:02 PM
    • T-Mobile (NYSE:TMUS) gained 2.7% today (and another 0.5% in late trading) following its strong Q4 report this morning.
    • In the company's call today, CEO John Legere stretched like Armstrong to make a technical point that TMUS is actually the third-biggest U.S. carrier: He says most carriers stop counting "dead" MVNO accounts after 60-90 days, while Sprint (NYSE:S) waits six months. So Legere says Sprint is overcounting by 1.7M customers and is actually behind T-Mobile.
    • CFO Braxton Carter tells the Financial Times that the company's guidance (on the low side of expectations) is "conservative" and expectations are high: "We are still taking major flow from the duopoly (T, VZ) ... We are very pleased with our first-quarter momentum."
    • T-Mobile should take a Q1 hit in front-loading customer acquisition, but it expects free cash flow to turn positive at some point this year.
    • Aside from record customer growth (fueled in part by aggressive promotion), the company pointed to highly watched synergies with its MetroPCS brand -- projecting to reach full run-rate synergies of at least $1.5B by 2016. Net present value there is expected to be $9B-10B, up from original $6B-7B projection.
    • That's finally "kicking in," says Craig Moffett: "Synergies from the PCS deal, a key driver of our bull case, are coming in sooner and higher than expected" and that the firm "has at last turned the profitability corner."
    • Related: T-Mobile US (TMUS) Q4 2014 Results - Earnings Call Transcript (Feb. 19 2015)
  • Wed, Feb. 18, 6:15 PM
    • T-Mobile (NYSE:TMUS) chief John Legere takes to the blog to excoriate the FCC's recent AWS-3 wireless spectrum auction as a "disaster" for consumers (even if a success for the Treasury), and to call for revised rules in the future.
    • Legere complains about AT&T (NYSE:T) and Verizon (NYSE:VZ), who'll use deep pockets to "corner the market on available spectrum at nearly any cost."
    • He notes: "To add insult to injury, the FCC’s rules actually allowed companies that don’t provide wireless service at all to buy up huge amounts of spectrum and sit on it for ten years!" ... a sure shot at Dish Network (NASDAQ:DISH), who's also taken criticism for using affiliated investment entities to garner a 25% discount on their spectrum stockpiles.
    • Legere says he's calling for action to avoid "epic failure" in next year's auction of low-band spectrum -- which will be highly contested and even more crucial to wireless companies' ability to reach further into buildings.
    • He wants at least half the available low-band reserved for competitors who aren't the "Twin Bells" (the FCC will restrict AT&T and Verizon, though not as much as Legere would like) and wants to ensure spectrum is put to use and not "collected and traded like financial securities."
    • Sprint (NYSE:S) mainly sat out the last auction but is sitting on spectrum that others may covet.
    • More FCC auction news
  • Tue, Feb. 17, 1:02 PM
    • AT&T (NYSE:T) is settling in still more in Mexico, adding unlimited calling to Mexico in yet a third way -- for its GoPhone customers on $60/month plans.
    • Following the plans to purchase Iusacell and Nextel Mexico, speculation is growing that AT&T will work on a unified mobile footprint between the U.S. and the fast-growing market south of the border.
    • AT&T notes Mexico is the most frequently dialed country by its customers.
    • Previously: AT&T's expansion: Cricket throws in unlimited calling to Mexico (Feb. 10 2015)
  • Fri, Feb. 13, 1:02 PM
  • Tue, Feb. 10, 2:15 PM
  • Tue, Feb. 10, 11:48 AM
    • While Verizon (VZ +0.4%) and AT&T (T +0.6%) are still the big two competing over mobile network size/reliability, Sprint (S +1.2%) and T-Mobile (TMUS +1%) are competitive in metro areas, according to analysis firm RootMetrics.
    • The company tested every mobile network by driving the equivalent of 100 U.S. coast-co-coast trips in the last half of 2014.
    • Verizon won out overall and on network speed and data; AT&T came in second and won on text performance.
    • Biggest problems for the sector's "other two": Reliability for T-Mobile; speed for Sprint.
    • For their part: "It’s a very encouraging result for us," says Sprint network chief John Saw; "We believe the metro stuff is the most important," says T-Mobile CTO Neville Ray.
    • "The good news is that our testing shows every network is getting better," says RootMetrics' Bill Moore.
  • Mon, Feb. 9, 11:16 AM
    • Dish Network (DISH -0.7%) was the surprise story of the FCC's AWS-3 spectrum auction, snapping up some $13B work -- but RBC Capital Markets thinks the company may be sitting on it a while, downgrading Dish's shares to Sector Perform.
    • "We are downgrading Dish (to sector perform) as we see few near-term prospects for Dish to monetize its spectrum," says RBC's Jonathan Atkin.
    • Atkin concludes that AT&T (NYSE:T) and Verizon (NYSE:VZ) have bought ample capacity for the next few years and that Sprint (NYSE:S) has airwaves that can compete on price with Dish's.
    • "We still view a combination with T-Mobile (with Dish as the acquirer) as possible, with an eventual take-out by Softbank/Sprint worth contemplating over the longer term," Atkin adds.
    • RBC has a price target for Dish Network of $81; shares are trading at $75.11.
  • Wed, Feb. 4, 12:47 PM
  • Wed, Feb. 4, 11:42 AM
    • Breakdown of FCC Chairman Tom Wheeler's op-ed on net neutrality: "Enforceable, bright-line rules" that ban paid prioritization ("fast lanes") and blocking/throttling of services, including for mobile broadband.
    • The investment key for related stocks: "All of this can be accomplished while encouraging investment in broadband networks. ... My proposal will modernize Title II, tailoring it for the 21st century, in order to provide returns necessary to construct competitive networks. For example, there will be no rate regulation, no tariffs, no last-mile unbundling."
    • FCC voting is scheduled for Feb. 26.
    • Related stocks: (CMCSA +2.8%); (CVC +2%); (TWC +3.1%); (T +0.6%); (VZ +0.7%); (CHTR +4.3%); (DISH +2.6%); (DTV +1%); (CCOI +3.9%)
  • Wed, Feb. 4, 11:31 AM
    • FCC Chairman Tom Wheeler has released an op-ed hinting at the commission's new stance on net neutrality rule -- and it suggests utility-like regulation for fixed and wireless broadband.
    • "This week, I will circulate ... proposed new rules to preserve the Internet as an open platform for innovation and free expression. This proposal is rooted in long-standing regulatory principles, marketplace experience, and public input received over the last several months."
    • Wheeler calls directly for Title II authority in "the strongest open Internet protections ever proposed by the FCC."
    • Stocks on the move: (CMCSA +3.3%); (CVC +2.9%); (TWC +4%); (T +0.8%); (VZ +0.7%); (CHTR +4.3%); (DISH +3.3%); (DTV +1.2%); (CCOI +4.3%)
  • Mon, Feb. 2, 4:19 PM
    • Speculation about how hard the FCC would come with new regulations on "net neutrality" tilts toward "more aggressive" as sources tell the WSJ the agency is seeking a significant expansion of its authority.
    • In summary, the changes would take mobile and fixed broadband firms (like T, TWC, VZ, CMCSA, CHTR, CVC, LBRDA) from being lightly regulated entities into a regulatory structure more like the traditional phone companies/telecoms, treating them more like public utilities.
    • The upshot: A ban on "paid prioritization," where service providers block or slow access to some websites/destinations depending on payments.
    • The rules would put interconnection (deals such as Netflix (NASDAQ:NFLX) arranges for content delivery) under Title II standards and the deals would be put to an "unjust/unreasonable" standard for evaluation.
  • Mon, Feb. 2, 3:09 PM
    • Making the first move on AT&T's (T +1.1%) debt ratings, Moody's downgrades the firm's senior unsecured rating to Baa1 from A3, with a negative outlook.
    • The change is one of what is likely to be a few downgrades of the telecom's debt after it assumed higher leverage with $18.2B in FCC spectrum bids.
    • Moody's thinks AT&T's spate of long-term investments will mean "materially higher leverage for several years" and issued its downcast outlook on the deceleration of AT&T's core wireless business, facing "margin compression and top line weakness" with heavy competition.
    • Previous FCC auction coverage
    • Previously: Wireless auction recap: AT&T's search for funds (Jan. 31 2015)
  • Mon, Feb. 2, 2:44 PM
    • More auction-funding fallout as Verizon (VZ +1.8%) is close to selling more than $10B in assets, including towers and parts of its wireline business, according to The Wall Street Journal.
    • The telecom needs to cover $10.4B in licenses it bid on in last week's FCC AWS-3 spectrum auction, as funds are due to the government by March 2.
    • Verizon already faced debt pressure in buying out Vodafone from their joint venture for $130B.
    • AT&T (NYSE:T), facing its own funding challenge, is reportedly seeking buyers for some of its data centers.
  • Sat, Jan. 31, 2:17 PM
    • While Dish Network had the most strategically interesting outcome in the FCC's wireless spectrum auction, AT&T (NYSE:T) dropped the biggest bomb, with its $18.2B bid package surpassing the auction's reserve price all by itself.
    • The high bid for a single license: about $2.8B for a primary New York license, won by AT&T.
    • AT&T's challenge now: With about $4.5B in the bank, and $18.2B due to go to the FCC by March 2, the telecom giant will need to scramble a bit for funds.
    • The company displayed confidence via a statement about its bid: It "expects that with this spectrum investment and other pending acquisitions, in the near term it may go above its 1.8x net-debt-to-EBITDA target. The company will use excess cash — after paying its dividend — over the next three years to pay down debt, and expects to return to historical debt ratios."
    • It's not just the auction bid that's changing AT&T from a low-leverage investment to a high-leverage one; a $49B acquisition of DirecTV (NASDAQ:DTV) and its purchases of Mexico's Iusacell and Nextel are putting pressure on its purse (and possibly its single-A rating). AT&T recently entered into $11B in credit pacts.
Visit Seeking Alpha's
T vs. ETF Alternatives
Company Description
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.