Fri, Jan. 16, 6:15 PM
- AT&T (NYSE:T) says in an SEC filing that it will record $10B in non-cash charges for Q4, with $7.9B related to changes in its pension and retiree benefit plans and the remaining $2.1B because certain copper assets are no longer needed as customer demand declines for older voice and data products.
- AT&T says none of the charges will affect segment operating results or margins.
- Shares -1.2% AH.
Fri, Jan. 16, 2:59 PM
- AT&T's (T +1.6%) $2.5B purchase of Mexican mobile carrier Iusacell is officially on the books. Ma Bell has used the occasion to reiterate the merger will allow it to offer cross-border mobile services. "It won't matter which country you're in or which country you're calling it will all be one network, one customer experience."
- AT&T has also announced Thaddeus Arroyo, formerly the president of AT&T's Technology Development unit and before that its CIO, will run Iusacell. Adrian Steckel, until now Iusacell's CEO, will "assist Arroyo with the integration of Iusacell into AT&T."
- Separately, Reuters reports China Telecom (CHA -2.2%) is "preparing a possible bid" to build and run a Mexican wholesale mobile network expected to cost $10B over 10 years. The network, mandated by Mexico's 2013 telecom reform bill, aims to allow America Movil's (AMX -0.6%) rivals (such as Iusacell) to provide better coverage without having to rely on AMX, which is still looking for a buyer for the Mexican assets it's shedding to bring its share below 50%.
Wed, Jan. 14, 4:08 AM
- Building on his previous call for the FCC to regulate broadband service as a utility, President Obama will push the FCC today to overturn state laws that prevent cities from building their own broadband networks.
- The centerpiece of the initiative is a call for the FCC to pre-empt laws in 19 states that can prevent cities and localities from building their own high-speed broadband networks.
- FCC Chairman Tom Wheeler has already indicated that he is strongly considering the move.
- Related Tickers: CMCSA, T, VZ, TWC, NFLX, CTL, CHTR, FTR, ELNK
Fri, Jan. 9, 5:00 AM
- Mexican broadcaster Grupo Televisa (NYSE:TV) has completed the sale of its 50% stake in mobile operator Iusacell to JV partner Grupo Salinas, clearing the way for AT&T (NYSE:T) to acquire the cellphone company.
- Televisa used some of the proceeds from the $717M sale to buy Mexican cable company Cablevision Red, a regional operator with around 650K subscriptions, for about 3B pesos ($204M).
- Previously: AT&T receives approval for Iusacell deal (Dec. 22 2014)
Wed, Jan. 7, 12:01 PM
- As John Legere recently predicted, AT&T (T -1.7%) has followed T-Mobile's (NYSE:TMUS) lead in allowing users to roll over unused mobile data, but with some fine print attached: While T-Mobile is letting Simple Choice plan users roll over unused data for up to 12 months, AT&T is only letting Mobile Share Value plan users roll over for one month.
- The announcement comes on a morning where T-Mobile reported 1.28M Q4 branded postpaid subscriber adds (1.04M phone, 239K mobile broadband). AT&T, which reports on Jan. 27, had 785K postpaid net adds in Q3 (~450K from tablets and "computing devices")
- The rollover announcement follows AT&T's launch of new enterprise machine-to-machine (M2M) data services and developer tools at CES, and a deal with theft-recovery service leader LoJack to power its telematics services for cars and commercial fleets. AT&T added over 500K connected car subscriptions in Q3.
- Shares are lower as a result of trading ex-dividend.
Dec. 31, 2014, 2:31 PM
- "AT&T (T -1.1%) will find new ways to cause their customers pain [in 2015] - especially those still on grandfathered unlimited plans," predicts T-Mobile (TMUS +0.3%) CEO John Legere, feisty as ever while making his 2015 predictions. The FTC recently sued AT&T for throttling the data speeds of unlimited plan users.
- Legere, whose company has unleashed a margin-crimping price war against over the last two years, also forecasts AT&T will launch a "knock off" version of T-Mobile's Data Stash feature, which lets users roll over unused data from monthly buckets for up to 12 months. "The fine print will be massive, and they’ll miss the first and most important step in the process – which is to stop punishing their customers with domestic overages and instead get rid of them."
- He isn't any kinder to Verizon (VZ -0.8%), predicting Big Red will "keep trying to baffle American wireless customers with BS promos, like the one they did this year telling customers they could get a free iPhone 6 (don’t forget to read the small print!), as well as misleading advertising about everything from coverage maps to device trade-ins."
- As for share-losing Sprint (S +0.6%), Legere sees them "continue throwing out campaigns, offers and promotions – anything to see if it sticks." By mid-year, he expects the carrier to "realize they can’t slash their way to growth and start to invest in their network and customer care."
- Two things Legere has kind words for (besides T-Mobile): 1) Apple Watch (NASDAQ:AAPL), which he predicts will "mark the tipping point when wearables go from niche to mainstream." 2) Phablets, which he expects will see 50% sales growth next year and thereby boost data usage.
- One positive prediction for the industry in general: Legere forecasts 2/3 of devices sold next year by carriers will be subsidy-free, up from 41% in 2014. The margin improvement that has come from moving customers from subsidies to early-upgrade and installment plans has been a silver lining for the industry during its price war.
Dec. 29, 2014, 5:23 PM
- Effective Feb. 5, DirecTV (NASDAQ:DTV) will respectively raise the monthly baseline prices for its Entertainment, Xtra, Ultimate, and Premier packages by 3.5%, 5.5%, 6%, and 5.4% to $59.99, $79.99, $86.99, and $136.99. In addition, DirecTV has hiked its per-device fee for connected TV sets and set-tops by $0.50 to $6.50/month, and its surcharges for regional sports networks by up to $2.14/month.
- The average price hike is bigger than last year's 3.7%. As one would expect, DirecTV, which has hiked prices every year for the last decade, blames higher programming costs. The satellite provider is less than a week removed from announcing a new multi-year deal with Disney/ESPN that covers online access. Like peers, it has had public disputes with network owners over carriage fees.
- AT&T (NYSE:T), which expects to close its acquisition of DirecTV in 1H15, has argued the acquisition will lower U-verse content costs by at least 20%, as a result of having more scale. The company has also promised to keep offering DirecTV's services on a standalone basis at "prices that are the same for all customers" for at least three years following the deal's closing.
Dec. 22, 2014, 1:40 AM
- Mexico's Federal Competition Commission has approved AT&T's (NYSE:T) $1.7B purchase of local cellphone company Iusacell.
- The competition regulator set conditions on the deal to "avoid risks to the process of competition" in markets where Iusacell would compete with America Movil (NYSE:AMX), which previously counted AT&T as a minority investor.
- AT&T sold its America Movil shares in the summer, before announcing its deal with Iusacell in November.
Dec. 19, 2014, 1:34 PM
Dec. 9, 2014, 11:34 AM
- Though AT&T (T -3.2%) expects its total subscriber count to grow in Q4, churn will be up Y/Y, CFO John Stephens states at a UBS conference. The forecast meshes with Verizon's observation that is retail postpaid disconnects are "trending higher" both Q/Q and Y/Y amid growing price pressure.
- In Q3, AT&T's total churn rose 5 bps Y/Y to 1.36%. However, postpaid churn fell 8 bps to 0.99%.
- Earlier: AT&T, Sprint sell off following Verizon's Q4 warning
Dec. 9, 2014, 9:48 AM
- With price pressure from rivals as intense has ever, Verizon has warned it expects to see "short-term pressure" on its wireless margins and EPS, and that retail postpaid disconnects are "trending higher" both Q/Q and Y/Y.
- AT&T (T -2.8%) and Sprint (S -2.3%) aren't responding well to the news; the S&P is down 0.9%. Sprint's moves under new CEO Marcelo Claure (launched in an attempt to stem ongoing postpaid share losses) appear to be contributing to Verizon's challenges. Big Red has been gaining postpaid share relative to AT&T and Sprint, though not T-Mobile.
- T-Mobile (TMUS -5.1%) is down sharply, but shares had already sold off before the Verizon news, thanks to T-Mobile's convertible offering announcement.
Dec. 2, 2014, 11:49 AM
- In a promo that starts on Friday, Sprint (S -1.2%) will offer AT&T (T -1%) and Verizon (VZ -0.7%) subs who switch to Sprint unlimited talk/text plans similar to the ones they're currently on a 50% price cut.
- One catch: Users have to trade in their existing AT&T/Verizon phones, and make an unsubsidized purchase of a Sprint phone (via leasing, installment plans, or a regular retail purchase).
- A Sprint rep "will select the service plan that most closely matches the data allowance" of a user's AT&T/Verizon plan. The carrier will cover up to $350 worth of early termination fees and installment plan balances per line.
- The offer is the latest in a series of aggressive promos and price cuts launched by new Sprint CEO Marcelo Claure, who has made a priority out of halting postpaid share losses. In addition to AT&T/Verizon, the promo takes aim at T-Mobile (TMUS -0.4%), which has been grabbing postpaid share (especially on the low-end) with its own aggressive offers.
- T-Mobile and Verizon's wireless service revenue respectively rose 10.6% and 4.8% in Q3, while AT&T and Sprint's fell 0.2% and 5%.
Dec. 1, 2014, 7:12 PM
- By recognizing all of the revenue due from smartphone installment plan payments up-front, AT&T (NYSE:T) is "dramatically inflating EBITDA and earnings," argues industry analyst Craig Moffett. "Without the accounting distortions, AT&T’s EBITDA growth is falling by double digits; in Q3, the company’s YoY earnings would have fallen by 17%."
- The revenue recognition policy is one reason AT&T is expected by the Street to see its EPS rise 3% this year to $2.57, even as the company forecasts its free cash flow will drop 19% to $11B. Buybacks are another.
- Moffett, who has cut his AT&T target by $2 to $31, is also concerned about the bill attached to the FCC's AWS-3 spectrum auction. "In order to earn even a modest return on the $38 billion bid in the auction, the Big Four carriers will need to generate an incremental $1.40 per month of wireless revenue for every man, woman, and child in America. In perpetuity."
Nov. 26, 2014, 5:33 PM
- After being prodded by the FCC on the issue, AT&T (NYSE:T) insists CEO Randall Stephenson's Nov. 12 remarks about halting fiber investments until neutrality rules are set only applied to new investments rather than ones already planned.
- Stephenson's remarks - "We can't go out and invest that kind of money deploying fiber to 100 cities not knowing under what rules those investments will be governed." - appeared to refer to AT&T's April announcement about bringing its U-verse GigaPower service to up to 100 cities in 21 metro areas, depending on local support. AT&T now says that plan is still on track.
- The original remarks came two days after Pres. Obama backed tough neutrality rules, and five days after AT&T announced it would be spending ~14% less on capex in 2015 than it would in 2014.
Nov. 24, 2014, 10:26 AM
- Citing higher spectrum and network investment costs, and the revenue impact of tougher price competition, Citi's Michael Rolling has downgraded Verizon (VZ -1.9%) to Neutral. AT&T (T -1.9%) is following Verizon lower.
- Rollins: "We believe the wireless industry is experiencing a great disconnect between the growth in data traffic and the growth in revenue ... We continue to fear that recent promotions create risk that the wireless industry at large may not be able to capture substantial incremental revenue from the rise in data consumption over time."
- Verizon has largely maintained its premium pricing in the face of major price cuts from T-Mobile and Sprint, but the carrier has been offering more data promos as of late. AT&T has been more willing to return fire, and has seen its wireless service growth revenue evaporate along the way.
- Last Friday: FCC auction bids hit $33B
Nov. 21, 2014, 5:22 PM
- Following 26 rounds, total bids in the FCC's AWS-3 spectrum auction have reached $33B - up from $24B two days ago. Though the auction's pace has slowed, more than $1B worth of bids were still tallied in the latest round.
- Walter Piecyk observes the average bid is now at $2.04/MHz./POP, far above his initial estimate range of $0.75-$1.25, and that it implies DISH's existing spectrum assets are worth over $73/share alone. Dish rose 2.1% today to $73.70.
- Tim Farrar thinks Dish may have bid over $10B, as it tries to both add to its spectrum portfolio (thus increasing its strategic value to carriers) and inflate the value of its existing assets. In addition to bidding against AT&T, Verizon, and T-Mobile for paired spectrum assets (the auction's main prize), Dish is expected to be the winning bidder for 15MHz. of unpaired spectrum.
- Meanwhile, the FCC has announced it will vote on rules for its 600MHz. incentive auction (due in 2016, and expected to be even bigger) in December. If approved, the rules will then be opened for public comment.
- Sticker shock? While the S&P rose 1.2% this week, AT&T (NYSE:T) fell 1.7% and Verizon (NYSE:VZ) fell 2.5%.
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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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