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AT&T Inc. (T)

  • 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.
  • Sat, Jan. 31, 1:47 PM
    • After learning which way AT&T (NYSE:T) went (high) and which way Verizon Wireless (NYSE:VZ) went (low) in the 11-week FCC wireless spectrum auction, most attention focused on Dish Network (NASDAQ:DISH): What are they up to?
    • The satellite firm took just short of half of the available licenses (and saved over $3B by cannily working through small-business partners) but doesn't offer mobile service -- yet.
    • Dish's fortunes in this auction were linked to those of Verizon, which is widely considered a potential buyer or lessee of Dish's spectrum assets. But Dish's Charlie Ergen has pursued wireless firms before (MetroPCS and Sprint (NYSE:S)) and may see wireless mobile as the next path forward from a slower-growing business.
    • “I think [Ergen's] strategy is built around a confidence that spectrum will only become more valuable going forward,” says former FCC commissioner Robert McDowell.
    • DISH closed the day out down 4.3%, slightly below where it was sitting before the auction results were released.
  • Fri, Jan. 30, 5:46 PM
    • In non-auction FCC news, the agency will add rules that let it review terms for the Internet service interconnects that govern deals between providers and heavy bandwidth eaters -- particularly including Netflix (NASDAQ:NFLX).
    • The move is a first blush of net-neutrality regulations to come.
    • Producers like Netflix, and YouTube would prefer a ban on interconnect fees, while service providers (CMCSA, T, VZ) are arguing for no limit on negotiated fees.
    • The rules are set for a Feb. 26 vote.
  • Fri, Jan. 30, 1:14 PM
    • Heavy volatility for Dish Network (NASDAQ:DISH), which has fluctuated from down 6.5% to its earlier -3.3%, following details of major bidder amounts in the FCC's record wireless spectrum auction.
    • Dish reportedly bid $10B and their participation was heavily scrutinized -- especially for what it might mean, whether Dish was bidding to add spectrum or just push prices for rivals.
    • The company was also tied to Verizon (NYSE:VZ), who might have an interest in Dish's existing similar spectrum assets, depending on its bidding here. The relatively lower spending by Verizon might mean hidden value in Dish's spectrum if Verizon takes an interest.
    • Others: (T +0.8%); (VZ); (TMUS +0.4%)
    | Comment!
  • Fri, Jan. 30, 1:06 PM
    • The FCC releases its list of winners in the record-setting AWS-3 auction.
    • In short: As speculated, AT&T (NYSE:T) opened up the checkbook, bidding $18.2B; Verizon (NYSE:VZ) bid $10.4B; Dish Network (NASDAQ:DISH) had a big presence, bidding $10B ($13.3B gross); T-Mobile (NYSE:TMUS) bid $1.8B.
  • Thu, Jan. 29, 1:04 PM
    • Par for the course in what has become intense competition in wireless telecom, the FCC's latest spectrum auction (AWS-3) received record bids of $44.9B in 341 rounds that started Nov. 13.
    • Expectations were that the total might come between $10B-$20B, above the $10B reserve price. Only a very few investors thought the sale might top $35B.
    • Paired spectrum licenses -- those focused on major metro areas, and without government users that must be moved off first -- got the big bids.
    • Analysts anticipated that AT&T (NYSE:T) may have been spending more than Verizon Wireless (NYSE:VZ) -- upward of $20B -- as news came that AT&T entered into $11B in credit pacts.
    • The high total also means multiple bidders aside from AT&T and Verizon likely fought hard for licenses in major metros including New York and Los Angeles. Sprint (NYSE:S) didn't take part, though Dish Network (NASDAQ:DISH) did.
    • Winners will be released by the FCC within days.
  • Wed, Jan. 28, 1:18 PM
    • AT&T (NYSE:T) is up 1% today after meeting EPS estimates lowered by a mobile price war -- while many investors looked past revenue growth and talk of business diversification to maintaining the company's high dividend yield.
    • The company committed to a lower capex of about $18B for 2015, and it notes a reduction in capex will bring a reduced trailing expense that will help with margins as well as free cash flow.
    • AT&T raised its quarterly dividend to $0.47 in December, good for a 5.7% forward yield -- which looks better if interest rates remain low or go lower.
    • AT&T "represents a tug-of-war between fundamental investors vs. income-oriented investors," says Morgan Stanley's Simon Flannery. "With the 10-year treasury bond at around 1.8%, AT&T is the highest yield in the Dow Jones."
    • New guidance is likely to come after the DirecTV (NASDAQ:DTV) acquisition closes sometime in H1 2015.
    • Previously: AT&T sees "continued" revenue growth and expanding margins (Jan. 27 2015)
  • Wed, Jan. 28, 8:41 AM
    • Liberty Media (NASDAQ:LMCA) CEO Greg Maffei says that the government will likely approve the giant media merger deals on the table -- Comcast (NASDAQ:CMCSA) with Time Warner Cable (NYSE:TWC), and AT&T (NYSE:T) with DirecTV (NASDAQ:DTV) -- but the key issue will be what the firms are forced to give up.
    • "My bet would be that all those deals get done," Maffei tells CNBC. "What is the set of regulations or restrictions around them and what the acquiring companies have to agree to, that'll be the rub."
    • Liberty's interest in Charter Communications (NASDAQ:CHTR) is on his mind: "Charter has been an acquirer, is going to continue to be an acquirer" -- and Charter will have room to make buys if Comcast ends up swallowing TWC.
    • Previously: Comcast-Time Warner Cable merger review clock running again (Jan. 13 2015)
    • Previously: DirecTV hiking prices ahead of AT&T deal's closing (Dec. 29 2014)
    | 1 Comment
  • Tue, Jan. 27, 4:57 PM
    • AT&T (NYSE:T) added 1.9M net wireless subscribers (up from prior 809K), keyed by postpaid (854K net adds) and connected devices. Postpaid churn of 1.22% (up from the prior year's record low, but comparable to two years ago).
    • More than half of customers have moved off the subsidized plans.
    • Record 10.1M postpaid sales (includes upgrades and gross adds); Smartphones were 94% of postpaid sales and now account for 83% of the postpaid base.
    • The company notes that closing the DTV deal will mean the largest revenue stream would come from business-related accounts ("growing nearly 6%"), followed by consumer TV and broadband, then by consumer mobility.
    • After the DTV closing and following its Iusacell and Nextel Mexico deals, AT&T will have further "diversified networks, geographies, products and revenue streams."
    • Previously: AT&T sees "continued" revenue growth and expanding margins (Jan. 27 2015)
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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.