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T-Mobile US, Inc. (TMUS)

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  • 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.
    | 12 Comments
  • Dec. 8, 2014, 5:41 PM
    • Top gainers, as of 5:15 p.m.: SYRG +10.5%. ETE +5.3%. ARO +4.1%. BTE +3.5%. FET +2.7%.
    • Top losers, as of 5:15 p.m.: OSUR -8.1%. HRB -5.7%. PBY -4.4%. TMUS -3.3%. AGI -2.7%.
    | 1 Comment
  • Dec. 8, 2014, 4:10 PM
    • T-Mobile (NYSE:TMUS) is offering 17.4M shares of mandatory convertible preferred stock featuring a liquidation preference of $50/share. Underwriters will have a 2.6M-share overallotment option.
    • Proceeds will be used for "general corporate purposes, including capital investments and acquisition of additional spectrum unrelated to spectrum it may obtain in the Federal Communications Commissions pending AWS-3 spectrum auction."
    • Total AWS-3 auction bids have surpassed $41B. Though Verizon, AT&T, and Dish are believed to be bidding more aggressively, T-Mobile's bill could still be significant. The carrier already raised debt in advance of the auction.
    • Some of the new offering's proceeds could end up going towards 2016's 600MHz. incentive auction, which is expected to be bigger than the AWS-3 auction, and where T-Mobile is expected to spend heavily to address a relative shortage of low-band spectrum.
    • T-Mobile's net debt totaled $17.3B at the end of Q3.
    | Comment!
  • 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%.
    | 30 Comments
  • Nov. 19, 2014, 6:48 PM
    • Bidding in the FCC's AWS-3 spectrum auction has reached $24.1B barely 24 hours after topping $14B. Through 15 rounds, $1.19B alone was bid on a 10x10 MHz. license for the NYC area.
    • "While bids could suddenly slow down, the auction appears on pace to blow through the top end of our expected range," writes BTIG's Walter Piecyk. Whereas Piecyk initially forecast an average bid of $0.75-$1.25/MHz./POP, spending has already topped $1.50/MHz./POP.
    • Deep-pocketed AT&T (NYSE:T) and Verizon (NYSE:VZ) are likely the "most aggressive bidders," notes JPMorgan's Philip Cusick; he suspects T-Mobile (NYSE:TMUS) is bidding more cautiously. New Street Research thinks AT&T and Verizon "will likely both go after a 10x10 MHz pair in all of the critical markets."
    • Tim Farrar suspects DISH is bidding up prices on the assumption AT&T/Verizon will respond by upping their bids regardless of the cost. This morning, Piecyk estimated the auction had served to increase the value of Dish's existing spectrum to ~$2/MHz./POP from ~$1.50/MHz./POP, thereby making Dish worth $104/share rather than a prior estimate of $85/share. Dish rose 10% in regular trading.
    • Though bidding is expected to slow down soon, it might not fully end for a few more weeks. Until then, the FCC won't disclose the names of winning bidders, or how much they're paying.
    | 9 Comments
  • Nov. 18, 2014, 4:09 PM
    • Following 14 rounds, total bids in the FCC's AWS-3 (high-band) spectrum auction have reached $14.18B. Bids have been placed for 1,303 of the 1,614 available licenses, and a $10.1B aggregate reserve price has been surpassed.
    • AT&T (T -0.4%), Verizon (VZ -0.3%), T-Mobile (TMUS -0.3%), and Dish (DISH +4%) are among the companies bidding on the spectrum, which includes paired licenses (50GHz. altogether) in the 1.7GHz. and 2.1GHz. bands (good for high-density urban areas). T-Mobile raised debt ahead of the auction to help finance its efforts.
    • The furious bidding pace highlights the strong interest U.S. carriers have in growing their spectrum portfolios to cope with rapid mobile data traffic growth. An even bigger auction for 600MHz. (low-band) spectrum was recently delayed until 2016; AT&T and Verizon will face purchase restrictions in that one.
    | 1 Comment
  • Nov. 4, 2014, 12:38 PM
    • William Blair's Jim Breen, reiterating an Underperform on Sprint (S -16.9%) following its disappointing Q3 numbers and EBITDA guidance cut: "Sprint reported a Sprint-platform postpaid churn rate that was its highest in the past six years ...  postpaid and prepaid losses reflect intense competition, specifically related to competitors’ early- termination fee reimbursements."
    • Breen expects Sprint 'will struggle to win high-end subscribers from Verizon and AT&T as their 4G LTE lead and shared data plans will likely have the effect of decreasing churn even further." He also notes improving Sprint's oft-criticized network quality will require significant capex; Sprint just slashed its 2014 capex budget by ~$1B.
    • Canaccord's Greg Miller (Hold) isn't convinced Sprint's relatively positive September metrics spell a turnaround. "Preliminary reports have not consistently translated into sustainable trends that improve shareholder value over the long-term ... We look forward to additional details on yet another strategy to restore the company and make it more competitive and successful."
    • Goldman (Neutral) is more encouraged by the September numbers, but also expects the costs of boosting subscriber adds to take a toll on ARPU and EBITDA. It expects postpaid phone net losses to fall to 240K in 2015 from 2.2M in 2014.
    • On the CC (transcript), Sprint said it expects 2014 EBITDA to be "neutral to modestly higher" compared with 2014 levels. Jefferies notes this is 20% below consensus.
    • Cowen (Outperform) still thinks a turnaround can happen. "We believe mgmt. is making the right decisions and that this should lead to outsized subs/EBITDA growth in coming quarters and consequent improvement in stock price."
    • Low-end rival T-Mobile (TMUS -3.7%), which has been performing much better than Sprint in recent quarters, is also lower.
    • Yesterday's earnings coverage
    | 1 Comment
  • Oct. 28, 2014, 11:23 AM
    • Though T-Mobile (TMUS +2.5%) missed Q3 revenue/EPS estimates, it delivered 1.379M branded postpaid net subscriber adds, up from 908K in Q2 and a record high.
    • Full-year branded postpaid net add guidance has been hiked to 4.3M-4.7M from 3M-3.5M. The costs of adding these subscribers has led T-Mobile to forecast adjusted EBITDA will be "at the very low end" of a prior $5.6B-$5.8B guidance range. Cash capex guidance is unchanged at $4.3B-$4.6B.
    • Branded postpaid phone net adds totaled 1.175M, up sharply from Q2's 579K and evidence of further share gains against Verizon, AT&T, and Sprint. Branded prepaid net adds rose to 411K from Q2's 102K. Wholesale net adds (MVNOS and M2M services) rose to 555K from 460K.
    • Service revenue rose 10.6% Y/Y to $5.7B, and equipment revenue 6.4% to $1.47B. Branded postpaid average billings per user rose to $61.59 from $59.79 in Q2 and $59.08 a year ago. Branded postpaid churn was 1.6% vs. 1.5% in Q2 and 1.7% a year ago.
    • T-Mobile ended Q3 with 25.9M branded postpaid subs, 16.1M branded prepaid subs, and 10.9M wholesale subs. Net debt totaled $17.3B, up $100M Q/Q.
    • Q3 results, PR
    | Comment!
  • Oct. 27, 2014, 11:50 PM
    • T-Mobile US (NYSE:TMUS): Q3 EPS of -$0.12 misses by $0.14.
    • Revenue of $7.35B (+9.9% Y/Y) misses by $70M.
    • Press Release
    | 3 Comments
  • Oct. 24, 2014, 6:58 PM
    • Thanks in large part to a 41% increase in taxes, America Movil's (AMX -0.9%) Q3 net income fell 39% Y/Y to 10.1B pesos ($746M). EBITDA (adjusted for the Telekom Austria deal) rose 0.4% to 69.2B pesos ($5.1B).
    • On an adjusted basis, service revenue rose 3.8% to 198.6B pesos ($14.6B), a slight improvement from Q2's 3.6% growth. Equipment revenue rose 6.2% to 22.2B pesos ($1.6B), and costs/expenses 5.8% to 151.7B pesos ($11.2B).
    • Total wireless lines +0.1% Q/Q and +0.5% Y/Y to 286.8M. Mexican lines fell 1.1% Q/Q to 70.5M amid regulatory pressure, but Brazilian lines rose 1.3% to 69.6M, and U.S. lines (via TracFone's prepaid services)1.5% to 25.9M.
    • Wireline revenue-generating units (RGUs) rose 1.8% Q/Q and 6.8% Y/Y to 77.6M. Mexican RGUs fell 0.1% Q/Q to 22.2M, while Brazilian RGUs rose 3.1% to 35.6M (~46% of total RGUs).
    • Net debt fell by $2.3B during the quarter to $36.2B.
    • AMX used its Q3 CC to state its isn't currently talking to anyone about a T-Mobile USA (TMUS +1.3%) acquisition. A German magazine speculated yesterday (while reporting Deutsche Telekom is still open to a T-Mobile sale) AMX could bid for T-Mobile.
    • Earnings Release (.pdf)
    | 4 Comments
  • Oct. 24, 2014, 1:16 PM
    • The FCC's Incentive Auction, which will auction off a giant chunk of low-frequency (600 MHz.) spectrum historically used for TV broadcasts, is now set for early 2016 instead of mid-2015.
    • The agency cites legal challenges from broadcasters, as well as the auction's complexity and "the need for all auction participants to have certainty well in advance."
    • A recent FCC study (.pdf) meant to appease broadcasters estimated the auction could raise $45B. Sprint (S -0.1%) and T-Mobile (TMUS +0.1%), whose rural and in-building coverage has suffered from a dearth of low-frequency spectrum, are expected to spend aggressively.
    • AT&T (T +0.1%) and Verizon (VZ +1%) are also expected to bid heavily, though the FCC plans to limit their purchases on account of their already-massive low-frequency assets. AT&T has said it plans to spend at least $9B.
    • Dish (DISH +1.4%), which has a large chunk of high-frequency spectrum it's still trying to find a use for, plans to participate as well.
    | 10 Comments
  • Oct. 23, 2014, 10:40 AM
    • Though it rejected Iliad's overtures, Deutsche Telekom (OTCQX:DTEGY) is still trying to find a suitor for T-Mobile USA (TMUS +2.7%), Germany's Manager Magazin reports.
    • The magazine speculates America Movil (AMX +0.8%), which no longer counts AT&T as an investor, could make a bid. For now, Carlos Slim's carrier only operates in the U.S. through its TracFone Wireless prepaid MVNO.
    • AMX is also about to get a windfall from the sale of Mexican assets being unloaded to appease regulators.
    | 2 Comments
  • Oct. 13, 2014, 1:26 PM
    • France's Iliad (OTC:ILIAF) has abandoned its bid to acquire T-Mobile USA (TMUS -3.6%). T-Mobile has fallen sharply on the news.
    • Bloomberg previously reported Iliad had set a mid-October deadline to up its initial (rejected) offer for T-Mobile, or walk away. Deutsche Telekom (OTCQX:DTEGY) was believed to be skeptical about Iliad's ability to run T-Mobile, and also nervous about selling one of its few growth assets.
    • Update: Iliad says it abandoned its bid after Deutsche Telekom and certain T-Mobile board members "refused to entertain" an offer for a 67% stake (up from a prior 56.6%).
    | 5 Comments
  • Oct. 10, 2014, 9:34 AM
    • Jefferies' Mike McCormack: "While shares have lagged following abandoned M&A discussions with Sprint, we believe that the market is improperly discounting the co's subscriber momentum, EBITDA growth, & inflecting FCF, with underappreciated value assigned to [MetroPCS] synergies."
    • McCormack has upgraded T-Mobile (NYSE:TMUS) to Buy, and lifted his target by $5 to $35. Though calling the "Uncarrier" an "attractive acquisition candidate," his target doesn't assume any M&A upside.
    • Three weeks ago, McCormack declared T-Mobile "continues to deliver disproportional subscriber growth" on the back of aggressive pricing and innovative promotions. CEO John Legere has said T-Mobile posted 552K postpaid and 208K prepaid branded net adds in August alone - the former figure was a new high. T-Mobile had 908K postpaid and 102K prepaid branded net adds in Q2.
    | 2 Comments
  • Oct. 2, 2014, 1:53 PM
    • Sources tell Bloomberg Iliad's (OTC:ILIAF) revised offer for T-Mobile USA (TMUS +3%) would involve taking a "significantly larger stake" than its previous offer of 56.6%. However, its $33/share offer price would remain unchanged.
    • Parent Deutsche Telekom (OTCQX:DTEGY), reportedly open to a $35/share deal, is said to be undecided on whether Iliad's revised offer would be adequate.
    • Notably, Bloomberg adds Iliad has "had some success signing up financial partners to back its efforts." The company has reportedly discussed raising as much as $5B in stock and debt for an improved bid.
    • T-Mobile has added to its gains, and is nearing $29.
    • Earlier: Iliad reportedly prepping bigger offer for T-Mobile
    | Comment!
  • Oct. 2, 2014, 1:21 PM
    • Bloomberg reports Iliad (OTC:ILIAF) is prepping an offer that would involve the French carrier acquiring a larger T-Mobile USA (TMUS +1.4%) stake. Iliad previously made a rejected $33/share offer for a 56.6% stake.
    • Iliad is believed to have set a mid-October deadline for upping its T-Mobile bid or walking away, and has made outreaches to P-E firms. T-Mobile parent Deutsche Telekom (OTCQX:DTEGY) is reportedly wary of Iliad's overtures.
    • T-Mobile has caught a bid on the report. However, shares remain well below Iliad's original offer price.
    | Comment!
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Company Description
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.