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- T-Mobile continues making impressive progress in growing the customer base.
- The lack of focus on the bottom line is a red flag to investors.
- As long as the 2015 EPS trend is down, investors must avoid the stock.
- Healthy growth in postpaid subscriber base due to luring subscribers with attractive pricing offers and Un-carrier strategies.
- Company has favorable growth prospects lined up to grow subscriber base and fuel top-line numbers.
- TMUS all geared up to expand margins and add towards growth of bottom-line numbers.
- T-Mobile added 2.3 million postpaid customers surpassing AT&T’s and Verizon’s net additions for the third quarter. Revenue was almost in-line but the company missed EPS estimate, thanks to the aggressive pricing strategy.
- I maintain the $39 price target amid continuing subscriber momentum.
- The previous piece clearly mentioned that T-Mobile will continue to add subscribers amid un-carrier incentives. However, any strategy to improve ARPU can hurt subscriber growth during the next year.
T-Mobile Q3 Earnings: Are Investors 'Getting More'?
- T-Mobile is still small compared to competitors T and VZ.
- Financials are booming for the smaller telecommunications company relative to giants.
- Though seeing volatility today, low stock price may indicate a good time to get involved in the company.
- Iliad ends pursuit of acquiring a large position in T-Mobile.
- Investors should dump the stock.
- The original article anticipated that a positive outcome wasn't likely for a T-Mobile sell as time passed due to the ongoing price wars in the domestic wireless market.
- Company posted record number of gross ads in August.
- Postpaid ARPU and churn rate don’t paint encouraging outlook for company.
- The company announced its new initiative with free WiFi calling and text messages.
- TMUS retains attractiveness for M&A activity.
- This 4th place wireless telecom is making a serious move for third place.
- There’s still a potential for a buyout, but there’s more upside if the company goes at it alone.
- Shares are down 20% from their 52-week highs from just four months ago and looks to be a buying opportunity.
Strategic Initiatives And Un-Carrier Strategies Key To Earning T-Mobile A Bullish ThesisEquity Watch • Mon, Sep. 22
- Company doing well by expanding postpaid subscriber base through ongoing strategic initiatives.
- Stays well on track to improving postpaid subscriber growth and competitive position in industry.
- Company likely to benefit from attractive pricing for iPhone 6 and 6 Plus.
T-Mobile: Organic Growth, Acquisitive Potential Justifies A 25% Upside
- T-Mobile continues to add subscribers due to aggressive pricing plans like Simple Choice.
- There is evidence of network quality improvement, and the company is further investing in airwaves.
- Going forward, T-Mobile is planning to maintain subscriber momentum through differentiated offerings that will result in stable ARPU.
- Price target is upgraded to $39 amid organic growth prospects and acquisitive potential of T-Mobile.
- T-Mobile announced record branded customer additions.
- Stock remains a short-term buy based on subscriber momentum.
- Subscriber additions were anticipated to help T-Mobile bounce back, but long-term issues loom with plunging earnings estimates.
- Deutsche Telekom lowered the hurdle for buying T-Mobile.
- The potential acquirers face debt concerns, especially if Deutsche Telekom still wants mostly cash.
- Domestic wireless war is likely pressuring Deutsche Telekom to exit via a lower offer.
- Although a Sprint deal is off the table, there's still other suitors.
- There's a motivated seller in T-Mobile's parent company.
- And there's plenty of value in T-Mobile's business model given its industry-changing initiatives.
- Postpaid customers are leaving.
- Prepaid customers are leaving.
- Debt is rising even without the rumored T-Mobile buyout.
T-Mobile Earns A Neutral Thesis As Potential Merger With Sprint Collapses
- Company posted strong postpaid and prepaid net additions in second quarter.
- Continues to invest heavily in network and expand 4G LTE framework.
- TMUS suffers from declining ARPU and high churn rate.
T-Mobile: All Indicators Show It Is A Stock To Buy
- Company has been growing its postpaid subscriber base with strategic initiatives that are fueling top-line growth.
- Subscriber base growth seems strong with company’s commitment to introducing innovative un-carrier strategies and family plan offerings.
- TMUS’ strong EBITDA margin growth trend likely to continue.
- T-Mobile had yet another growth quarter, and the acquisition front is heating up with Iliad's $15 billion bid for 56.6% stake of T-Mobile.
- I revise my previous opinion regarding the chances of Sprint/T-Mobile merger as new events reveal that the probability of such a merger is remote.
- Accordingly, the price target is revised to reflect newly anticipated scenarios. The deal block by the FCC can drive T-Mobile in upward direction amid potential breakup fee.
T-Mobile Makes Waves In Anticipation Of Upcoming Low Band Spectrum Auction
- FCC has partially restricted bidding power of VZ and T in upcoming auction.
- Joint bid by TMUS and S will help the two acquire meaningful spectrum holding.
- Joint bid might strengthen TMUS and S merger case.
Fri, Aug. 1, 4:08 AM| 5 Comments
Thu, Jul. 31, 3:58 PM
- Sources tell Bloomberg T-Mobile USA (TMUS +6.7%) parent Deutsche Telekom (OTCQX:DTEGY) views Iliad's (OTC:ILIAF) $33/share offer for a 56.6% stake in T-Mobile as less competitive than Sprint's (S -5.9%) bid, previously reported to be around $40/share.
- Though Iliad declares its bid values the T-Mobile shares it won't own at $40.50, that figure includes $10B worth of synergies the French carrier predicts a merger will yield. Sprint and SoftBank (OTCPK:SFTBF), of course, predict their offer would also yield major synergies.
- "Iliad is about a third of the size of T-Mobile US, and we don't think there would be synergies from the deal," says analyst Jonathan Chaplin. He adds a deal will be tough to finance without Iliad founder/majority shareholder Xavier Neil surrendering control.
- Nonetheless, T-Mobile has rallied to $33 on news of Iliad's bid, which is bound to face less FCC/DOJ scrutiny if accepted and successfully financed.
- The offer is overshadowing a solid Q2 report from T-Mobile. The carrier saw 1.5M net customer adds in Q2 (up from 1.3M in Q1), slightly more than Verizon's Q2 adds and well above AT&T and Sprint's. Branded postpaid net adds totaled 908K (579K phone adds), and branded prepaid net adds 102K. Service revenue rose 7.1% Y/Y.
Thu, Jul. 31, 1:02 PM
- France's Iliad (OTC:ILIAF) is offering $15B in cash for a 56.6% stake in T-Mobile USA (TMUS +7.3%) at a price of $33/share. Iliad values the remaining 43.4% at $40.50/share. Sprint (S -5.3%) has been reported to be planning a ~$40/share deal.
- Iliad says it has obtained financing from unnamed banks, and would also do a capital raise to help pay for the deal. One issue: Iliad has a current market cap of just $16B, less than T-Mobile's $24.8B and Sprint's $30.6B. Sprint has reportedly lined up a $40B+ debt package to finance a T-Mobile deal.
- A source tells the WSJ Iliad, which has upended the French mobile market with its aggressive pricing, views a T-Mobile merger as a "one-time opportunity to enter the world's-largest telecoms market."
- Iliad also thinks (perhaps with good reason, given FCC/DOJ remarks) regulators will be more comfortable with its bid than Sprint's, since Iliad has no U.S. presence.
- AT&T (T -2%) and Verizon (VZ -2.3%) have joined Sprint in selling off, as investors mull the possibility of a deal that would leave the number of nationwide U.S. carriers at 4. Concerns about Iliad's pricing history might also be weighing on shares.
- Related tickers: OTCPK:SFTBF, OTCQX:DTEGY
- Earlier: Iliad reportedly bids for T-Mobile USA
Thu, Jul. 31, 11:54 AM| 2 Comments
Thu, Jul. 31, 6:28 AM
Wed, Jul. 30, 3:42 AM
- Sprint (NYSE:S) and T-Mobile (NYSE:TMUS) are not likely to announce a merger before September, Reuters reports. The two are still preparing a detailed case for a deal to appease U.S. regulators.
- Last month it was announced that Sprint would pay around $40 per share for T-Mobile, valuing the latter at nearly $32B.
- Besides for formulating their strategy to clear regulatory scrutiny, other details such as break-up fees still have to be hammered out.
Tue, Jul. 15, 2:13 PM
- Sprint (S -3.7%) and T-Mobile (TMUS -3.1%) plan to form a JV that will raise $10B to spend on next year's giant low-frequency spectrum auction, the WSJ reports.
- The funds are said to be part of the $45B financing package (previous) SoftBank (OTCMKTS:SFTBF) is lining up to enable a Sprint/T-Mobile merger (regulators permitting). T-Mobile will oversee the JV.
- Two months ago, the FCC set rules limiting how much spectrum Verizon and AT&T can buy through the auction. That opens the door for Sprint and T-Mobile to grab a large chunk of the airwaves. Each has a relative dearth of low-frequency spectrum (superior for rural and in-building coverage).
- Sprint currently has $26.6B in net debt, and T-Mobile roughly $9B. Shares of both companies have fallen on the report.
Tue, Jul. 15, 6:41 AM
- Sprint (NYSE:S) Chairman Masayoshi Son is facing higher lending fees for financing the purchase of T-Mobile (NYSE:TMUS), as lenders are expecting a lengthy approval process.
- As of now, the plan includes a drop-dead date of 18 months after the deal’s announcement - at which point it could be terminated. That deadline could also be extended.
- The Sprint takeover review can take at least a year to evaluate, and may not even be approved by regulators insisting on preserving four competitors in the U.S. wireless market. The DOJ previously sued AT&T in 2011 to block its effort to acquire T-Mobile.
Fri, Jul. 11, 1:32 PM
- The Nikkei reports SoftBank (SFTBF) is close to a deal for a Sprint (S +4.4%)/T-Mobile (TMUS +1.9%) merger. Shares of both companies have moved higher.
- Reuters reported 3 weeks ago Sprint and T-Mobile were looking to announce a deal around August, and that the former had lined up a $40B+ debt package. Prior reports mentioned a ~$40/share T-Mobile acquisition price and a $2B breakup fee.
- T-Mobile is still below $34, as doubts about regulatory support for a deal remain high.
- Prior Sprint/T-Mobile coverage
Thu, Jun. 19, 6:06 PM
- Sprint (S) has "lined up eight banks" to finance a T-Mobile (TMUS) acquisition, Reuters reports. The companies will reportedly "seek to finalize details of the financing in the coming month so they could announce a merger around August."
- The financing includes a $40B+ debt package featuring a ~$20B bridge loan from Sprint parent SoftBank (SFTBF), and a $20B refinancing of T-Mobile's present debt. Sprint currently has $26.6B in net debt, and T-Mobile roughly $9B.
- Bloomberg reported on June 4 Sprint and T-Mobile were near a deal valuing the latter at ~$40/share. CNBC reported last Friday the companies had agreed on a $2B breakup fee, and to have the post-merger company (should regulators allow it to exist) go under the T-Mobile name.
- S +0.5% AH. TMUS +0.9%.
Thu, Jun. 19, 2:19 AM
- T-Mobile (TMUS) is launching two new services, including free data for streaming music, and a free loaner iPhone to test its network.
- Subscribers will now be able to listen to music from websites such as Spotify and Pandora without counting it towards their data use. In addition, T-Mobile will mail a free loaner iPhone to potential subscribers to try out unlimited service for a week.
- The company's is looking for ways to differentiate its service packages from competitors.
Wed, Jun. 18, 5:13 AM
- T-Mobile (TMUS) is looking to purchase a few smaller competitors to hedge itself in case a Sprint (S) merger does not come down the pipe.
- The smaller carriers have a "low-band spectrum", which offers greater service in urban areas due to its ability to penetrate buildings. The company is looking for this advantage in order increase its share in the metropolitan market.
Fri, Jun. 13, 10:28 AM
- CNBC's reported breakup fee figure is higher than the $1B+ previously reported by the WSJ, but still well below the $4B T-Mobile (TMUS +0.2%) was paid by AT&T.
- The TV network also reports Sprint (S +1.8%) and T-Mobile have agreed the post-merger company will be called T-Mobile. Though the carriers are roughly equal in size, T-Mobile has been performing much better as of late, and keeping its name would please parent Deutsche Telekom (DTEGY), which uses the T-Mobile brand in other markets.
- Past reports have noted brash T-Mobile CEO John Legere will likely be the head of the combined company.
- Sprint is trading higher. With skepticism about regulatory approval still running high, a reports about a relatively low breakup fee might be going over well with the Street.
- Previous: Sprint, T-Mobile reportedly near agreement on ~$40/share deal
Thu, Jun. 5, 12:17 PM
- With worries about the DOJ/FCC's willingness to approve a Sprint (S -2.6%)/T-Mobile (TMUS -2%) merger still running high, shares of both carriers are now lower following reports stating they've largely agreed to the terms of cash/stock deal that would value T-Mobile at ~$40/share.
- T-Mobile is now 16% below the rumored acquisition price. A deal would reportedly require Sprint to pay ~$16B in cash, issue a similar amount of stock, and assume $9B worth of net debt.
- Sprint already had $26.6B in net debt at the end of Q1, and has since used its receivables to land a $1.3B credit facility.
- The WSJ reports Sprint would pay T-Mobile a $1B+ breakup fee consisting of cash and other assets if the deal is shot down. T-Mobile received a $4B breakup fee from AT&T ($3B in cash) in 2011 after regulators derailed their planned merger.
Wed, Jun. 4, 5:56 PM
- Bloomberg reports Sprint (S) and T-Mobile USA (TMUS) are near an agreement for a deal that would value T-Mobile at ~$40/share. The WSJ is also reporting a ~$40/share price.
- S +3.7% AH. TMUS +3.2% to $36.02 - a price that points to ongoing regulatory worries.
- Sprint's offer will reportedly feature a 50-50 cash/stock split, and leave Deutsche Telekom (DTEGY), which currently owns 67% of T-Mobile, with a 15% stake in the combined company. Bloomberg's sources state an announcement could happen by July.
- In addition, the carriers are reportedly close to agreeing on a breakup fee - Sprint and parent SoftBank (SFTBF) have reportedly been pushing for a smaller breakup fee for a deal that's bound to face tough DOJ/FCC scrutiny; T-Mobile and Deutsche Telekom have wanted a bigger one.
- More on Sprint/T-Mobile
Tue, Jun. 3, 4:07 PM
- Verizon (VZ -1.5%), Sprint (S -2.2%), and T-Mobile (TMUS -1%) have each closed lower after AT&T guided for no Q2 wireless service revenue growth, and a weak wireless service EBITDA margin.
- Investors have already been nervous about the impact a T-Mobile-driven price war stands to have on the top and bottom lines of rivals. AT&T mentioned adoption of its Mobile Share Value plans, which saw price cuts after T-Mobile announced a series of aggressive moves, are pressuring its ARPU.
- Verizon, though offering some modest promotions, has generally stuck to a premium pricing strategy; its disappointing Q1 postpaid subscriber adds - 539K net adds with an estimated 95K decline for phones - fueled questions about whether a strategy change is needed. The fact AT&T expects to add 800K+ postpaid subs in Q2 might heighten those concerns.
- Sprint has been more aggressive than Verizon, launching its low-cost Framily plans in January and heavily promoting them. But it lost 231K postpaid subs in Q1 as it scrambles to neutralize Verizon/AT&T's 4G coverage leads.
- One encouraging AT&T datapoint: The carrier expects ~2/3 of postpaid smartphone subs to be on subsidy-free Mobile Share Value plans by year's end. Both AT&T and peers have made slashing subsidy spend a priority.
TMUS vs. ETF Alternatives
T-Mobile US Inc T-Mobile US Inc is a wireless communications provider that offers wireless broadband mobile services under the T-Mobile and MetroPCS brands in the United States, Puerto Rico and the U.S. Virgin Islands.
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