Dec. 27, 2013, 4:34 PM
- Jefferies' Mike McCormack notes multiple Web sources indicate T-Mobile USA's (TMUS +1.2%) Jan. 8 "Un-Carrier 4.0" event will involve the launch of a promotion in which the carrier will offer to pay off the early termination fees of consumers switching from rivals and trading in their old phones.
- One report states T-Mobile will offer up to $350 in credit to smartphones users, and $200 in credit to feature phone users.
- McCormack worries T-Mobile is "opening a Pandora's box, leading to intensified competition from larger peers that have better scale and higher profitability." That's a reference to AT&T (T +0.1%) and Verizon (VZ), and perhaps to a lesser extent Sprint (S +8.3%).
- In addition to potentially increasing churn at rival carriers and compelling them to respond with similar promotions, T-Mobile's move could lead rivals to offer early subsidies in an effort to keep customers in the middle of contracts from switching. AT&T and Verizon have been trying hard to reduce subsidy expenses via service plan and policy changes.
- Over the last 10 months, T-Mobile has already eliminated contracts/subsidies in favor of phone installment plans, rolled out a smartphone upgrade program (leading peers to do the same), and launched cheap data roaming and international calling services.
Dec. 26, 2013, 12:24 PM
- Wells Fargo has raised its Sprint (S +3.1%) valuation range to $11-$11.75 from $7.75-$8.25, and predicts ongoing reports of a Sprint/SoftBank bid for T-Mobile USA (TMUS +0.7%) will continue to bolster shares.
- The firm also thinks the value of Sprint's spectrum (increased by the Clearwire acquisition) helps create a base for shares, and notes a T-Mobile deal would produce major cost savings.
- Meanwhile, Reuters observes the Obama Administration has taken a skeptical view towards consolidation between major carriers and pay-TV providers, something that could stand in the way of a Sprint/T-Mobile deal.
- New FCC chairman Tom Wheeler recently stated his organization has a responsibility to "protect competition that exists and promote competition in those areas where it doesn't." Likewise, DOJ antitrust attorney William Baer has said the Department "believes it is essential to maintain vigilance against any lessening of the intensity of competitive market forces."
Dec. 24, 2013, 1:33 PM
- The Nikkei reports SoftBank (SFTBF, SFTBY) is "in the final stages of talks" with Deutsche Telekom (DTEGY, DTEGF) regarding a deal in which 78%-owned Sprint (S -0.2%) would acquire Deutsche's 67% stake in T-Mobile USA (TMUS +1%). Sources add the deal could happen as soon as next spring, and could be worth more than ¥2T ($19.2B).
- A ¥2T price tag for Deutsche's T-Mobile USA stake would translate into a $28.7B valuation for the #4 U.S. mobile carrier. T-Mobile USA, whose shares have risen sharply thanks to Sprint M&A rumors, currently has a market cap of $25.5B.
- SoftBank CEO Masayoshi Son has reportedly been busy lining up financing for a T-Mobile USA bid, which is bound to be intensely scrutinized by regulators. Reuters has reported Dish (DISH +1.1%) is also thinking of bidding for T-Mobile, and wouldn't stand idly if Sprint made a move.
Dec. 23, 2013, 10:56 AM
- Cantor's Youssef Squali believes Facebook's (FB +4.5%) ad load (the proportion of news feed content consisting of ads) has doubled in Q4 to 10%. Though Facebook typically sees its ad load rise in Q4 Squali thinks there's an improvement in ad quality this time around, with more sales to major brands and "a greater mix of higher-priced click-to-play video ads."
- The remarks come only two months after Facebook made investors nervous by stating it won't significantly increase its news feed ad load going forward, and will focus on improving quality.
- In addition to Squali's note, shares could also be getting a lift from the fact Facebook's 70M-share, $3.85B stock offering was priced at only a modest discount to where shares traded before the offering was first announced.
- Meanwhile, Facebook has struck a deal with T-Mobile USA (TMUS +0.9%) to offer free access to Facebook and Facebook Messenger to users of the #4 U.S. carrier's GoSmart prepaid services, whether or not they have data plans.
- Facebook has already reached similar deals with many international carriers, in an effort to grow its user base and mobile engagement in markets where many Internet users are mobile-only.
- Shares are making new highs, and are up 116% YTD.
Dec. 20, 2013, 4:20 PM
- Bloomberg has joined the WSJ in reporting Sprint (S +6.7%) is trying to obtain financing for a T-Mobile USA (TMUS +4.7%) bid from six banks, and provides additional details.
- Bloomberg's sources indicate SoftBank (SFTBF) CEO Masayoshi Son has personally talked with banks about obtaining ~$20B in financing. His goal: To buy Deutsche Telekom's (DTEGY) 67% stake in T-Mobile in an all-cash deal.
- At the same time, Sprint's management is said to be "reluctant" to deal with integrating Sprint and T-Mobile's incompatible 3G networks; Sprint uses the EV-DO air interface, while T-Mobile uses W-CDMA/HSPA. But with SoftBank owning 78% of Sprint, their objections may be rendered moot.
- Also: With regulatory approval of a Sprint/T-Mobile deal far from certain, Son reportedly wants to avoid agreeing to a large breakup fee. AT&T had to pay a $7B breakup fee to T-Mobile two years ago.
- Separately, T-Mobile has scheduled a Jan. 8 CES event where it will reveal the fourth part of its "un-carrier" strategy. Part one involved the elimination of phone subsidies and contracts in favor of monthly phone installment plans; part two involved the launch of T-Mobile's Jump smartphone upgrade plans; and part three brought cheap global data roaming and international talk/text plans.
Dec. 20, 2013, 12:08 PM
- The WSJ reports at least six banks are working on financing proposals for a Sprint (S +3%) bid for T-Mobile USA (TMUS +0.7%). Sprint, whose shares jumped a week ago when the paper first reported the carrier is thinking of making an offer for its smaller rival, is now up 16% since the initial report arrived.
- Financing or not, close regulatory scrutiny of a proposed merger between the third and fourth-largest U.S. mobile carriers is a given. JPMorgan noted yesterday a Dish (DISH +1.6%) bid for T-Mobile (TMUS +0.7%), also reportedly being weighed, would have much less trouble being cleared by regulators.
Dec. 19, 2013, 11:19 AM
- A day after Reuters reported Dish (DISH +0.3%) is considering a 2014 bid for T-Mobile USA (TMUS +3.3%), JPMorgan predicts an offer for the #4 U.S. carrier would involve a $35/share price tag (a 25% premium to current levels), and that a merger would create $1B/year in synergies.
- The firm also points out a Dish/T-Mobile merger would have much less trouble being approved by regulators than a Sprint/T-Mobile merger.
- T-Mobile is now up 10% since the WSJ reported last Friday that Sprint is thinking about making an offer for the company.
Dec. 18, 2013, 4:06 PM
- Less than a week after rallying in response to a WSJ report that Sprint (S +2.3%) is considering a bid, T-Mobile USA (TMUS +2.2%) has moved higher on a Reuters report stating Dish (DISH +0.5%) is weighing a bid for the #4 U.S. carrier, and won't stand idly if Sprint makes an offer.
- Charlie Ergen, thwarted this year in his efforts to buy Sprint/Clearwire and still looking to make use of Dish's 4G spectrum, has repeatedly stated he's open to a merger with T-Mobile.
Dec. 18, 2013, 1:41 PM
- Verizon (VZ +0.6%) and T-Mobile (TMUS +0.1%) have filed paperwork requesting the FCC sign off on spectrum swaps related to the high-frequency (urban-friendly) AWS-1 and PCS bands. No dollar figure is attached to the proposal.
- The #1 and #4 U.S. mobile carriers are looking to swap AWS-1 spectrum in 285 counties, and PCS spectrum in 153 counties. The proposal highlights the extent to which carriers are scrambling to improve their spectrum positions as mobile data traffic growth refuses to let up.
- The proposal appears to be separate from the rumored sale of rural-friendly 700MHz. spectrum by Verizon to T-Mobile. Bloomberg recently reported a deal is close, and would involve T-Mobile paying Verizon with a mixture of cash and urban spectrum.
Dec. 13, 2013, 4:41 PM
- Sources tell the WSJ Sprint (S +4.3%) is "studying regulatory concerns" related to a T-Mobile USA (TMUS +8.2%) bid, and that SoftBank (SFTBF) founder/CEO Masayoshi Son is "driving" the effort. However, they caution Sprint hasn't yet decided whether to make a move.
- Deutsche Telekom (DTEGY), which retains a 67% stake in T-Mobile USA, is said to be "looking to possibly exit the U.S. market." Though Deutsche is currently prohibited from selling T-Mobile shares until 18 months have passed from the closing of the MetroPCS deal, it can sell earlier if it received an offer for the entire stake.
- Sprint and T-Mobile only have 53M postpaid subs between them, less than Verizon's 95M and AT&T's 72M. If they try to go through with a merger, they'll mention such figures to regulators early and often.
- But the FCC and DOJ, only two years removed from thwarting AT&T's bid for T-Mobile, haven't given any indication they're now comfortable seeing further consolidation among nationwide U.S. carriers.
- Previous: Sprint reportedly working on deal with T-Mobile
Dec. 13, 2013, 4:01 PM
- The WSJ reports Sprint (S +5%) could make a bid for T-Mobile USA (TMUS +7.8%) in 1H14. Both Sprint and T-Mobile shares have spiked in response.
- The FCC would doubtlessly give close scrutiny to a deal that would reduce the number of nationwide U.S. carriers to three from four. But Sprint majority owner SoftBank (SFTBF) hasn't been scared to make big bets.
- Both Sprint and T-Mobile's wireless subscriber bases are considerably smaller than Verizon and AT&T's, particularly with regards to corporate users. Sprint may be betting regulators will allow a deal to go through for this reason.
Dec. 13, 2013, 2:29 PM
- Bloomberg reports Verizon (VZ -0.5%) is close to a deal to sell its 700MHz. A-block spectrum (good for rural areas) to T-Mobile USA (TMUS +0.6%) for a mixture of cash and urban spectrum, and could announce a sale next week.
- The much-rumored deal would help T-Mobile expand its rural coverage, and allow Verizon to improve its 4G coverage in cities where it's investing heavily to cope with surging 4G data traffic.
- The report comes shortly after the FCC delayed the auctioning of 600MHz. spectrum badly coveted by T-Mobile and Sprint to mid-2015.
Dec. 12, 2013, 1:32 PM
- The FCC has reached a deal with major U.S. carriers (VZ, T, S, TMUS) to make it easier for consumers to unlock their phones. The deal will guarantee postpaid users can unlock their phones once their contracts end, and will reportedly also cover some prepaid phones.
- In addition, carriers will have to approve or deny unlocking requests within two business days, and (according to sources) will also have to notify consumers when their phones become eligible for unlocking.
- A big increase in the number of unlocked phones in use could results in higher customer churn, as users no longer find it necessary to buy a new phone and (if they want a subsidy) agree to a new contract to switch carriers. At the same time, it could lower phone subsidy expenses.
- Previous: FCC wants carriers to allow unlocking
Dec. 6, 2013, 6:04 PM
- FCC chairman Tom Wheeler discloses a much-anticipated auction of broadcast TV spectrum to mobile carriers won't take place until mid-2015. Under prior chairman Julius Genachowski, the commission had set a June 2014 target date for auctioning the airwaves, which reside in the rural-friendly 600MHz. band.
- Sprint (S) and T-Mobile (TMUS), who badly need more low-frequency spectrum to expand their rural coverage, have been hoping the auction would happen sooner rather than later. Verizon (VZ) and AT&T (T), who own ~75% of all sub-1GHz. U.S. mobile spectrum, currently offer better rural coverage in many regions.
- Earlier this week, Wheeler hinted the FCC's auction rules will favor the likes of Sprint and T-Mobile, who have been calling for restrictions to be placed on how much spectrum Verizon and AT&T can purchase.
Dec. 5, 2013, 3:19 AM
- AT&T (T) is reportedly thinking about bidding for spectrum licenses owned by Verizon Wireless (VZ), which bought the assets for $2.4B and may receive up to $2.75B in any deal.
- An AT&T bid could put it up against T-Mobile US (TMUS), whose marketing strategy has included targeting AT&T in the companies' battle for customers.
Dec. 3, 2013, 4:28 PM
- New FCC chairman Tom Wheeler: "Spectrum is finite ... A key goal of our spectrum-allocation efforts is ensuring that multiple carriers have access to airwaves needed to operate their networks."
- Wheeler also made note of an April DOJ filing calling on major upcoming FCC spectrum auctions (due in 2014, at the earliest) to be designed to guarantee smaller carriers get enough low-frequency airwaves (better for rural areas).
- The remarks have been praised by Sprint (S -1.8%) and T-Mobile USA (TMUS +1.9%), who have been calling for such rules themselves. Bigger rivals AT&T (T -0.2%) and Verizon (VZ +0.7%), who between them own ~75% of the country's low-frequency mobile spectrum, probably aren't as pleased.
- Sprint, which obtained a huge chunk of high-frequency (2.5GHz.) spectrum through the Clearwire deal, claims it would need 13-15 2.5GHz. cell sites to cover as much ground as one 700 MHz. site. T-Mobile is reportedly looking to buy unused 700MHz. spectrum from Verizon.
- AT&T is set to acquire high-frequency (1.7-2.1GHz.) spectrum through the Leap Wireless deal, but (no doubt to appease the FCC) plans to have Leap sell 700MHz. spectrum it recently acquired for $204M.
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T-Mobile US Inc provideswireless communication servicesin the postpaid, prepaid, and wholesale markets.The Company's products and services includevoice, messaging, data services,wireless devices, smartphones and other mobile communication devices.
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