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T-Mobile US, Inc. (TMUS)

- NYSE
  • 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
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  • 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
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  • 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.
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  • Oct. 2, 2014, 2:42 AM
    • The FCC is prepping its upcoming auction of frequencies known as AWS-3, scheduled to begin on Nov. 13. The auction is expected to raise at least $10B and will include airwaves previously occupied by multiple federal users.
    • A total of 80 entities submitted initial applications, including Dish Network (NASDAQ:DISH) and three of the four largest U.S. wireless carriers - Verizon (NYSE:VZ), AT&T (NYSE:T) and T-Mobile (NYSE:TMUS).
    • Sprint (NYSE:S) is planning sit out on the auction to save firepower for a major sale of low-frequency airwaves scheduled for next year.
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  • Sep. 26, 2014, 4:00 PM
    • Deutsche Telekom (OTCQX:DTEGY) is "preparing for the possibility" of keeping its T-Mobile USA (TMUS +1.4%) stake for at least another year if Iliad (OTC:ILIAF) fails to sufficiently improve its offer, sources tell Reuters.
    • Iliad has reportedly set a mid-October deadline to improve its T-Mobile bid, after an initial $33/share offer for a 56.6% stake was rejected. Multiple reports have stated DT has its concerns about selling to to Iliad, especially given T-Mobile (unlike many of DT's European assets) is showing healthy growth.
    • T-Mobile has dipped on the Reuters report, but is closing higher. Earlier today, Pac Crest argued T-Mobile should reject any offer below $40/share, given its recent performance. The firm added its retail checks indicated a pickup in switching activity (to T-Mobile) and termination fee reimbursements following the iPhone 6 launch.
    | 2 Comments
  • Sep. 19, 2014, 6:30 PM
    • Iliad (OTC:ILIAF) has set a mid-October deadline to either make a new T-Mobile USA (NYSE:TMUS) offer or walk away, Reuters reports. The French carrier is said to be talking with U.S. banks to help finance a higher bid.
    • Reuters adds Iliad "faces resistance" from Deutsche Telekom (OTCQX:DTEGY), which would keep a minority T-Mobile stake under Iliad's proposed deal terms and is skeptical of the company's prospects in a market it currently has no presence in.
    • Bloomberg reported earlier today Iliad was struggling to line up 3rd-party investors, and that DT's board was divided on whether it should "sell its only growing asset." Sources (within Iliad?) tell Reuters Iliad's management has "finished road shows to meet U.S. investors and is waiting to hear back from potential investors."
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  • Sep. 19, 2014, 2:22 PM
    • Iliad's (OTC:ILIAF) talks with KKR and other investment firms to make a joint bid for T-Mobile USA (TMUS -1%) haven't yet borne fruit, Bloomberg reports. The French carrier's $33/share bid for a 56.6% stake was shot down last month.
    • Meanwhile, Deutsche Telekom (OTCQX:DTEGY), recently reported to be open to a $35/share offer for T-Mobile USA, is said to be split on whether it should "sell its only growing asset."
    • Bloomberg adds Iliad has "discussed raising as much as $5 billion in additional debt and equity for a sweetened offer." Likely acting as a hurdle: T-Mobile, which has over $17B in debt, is investing heavily to build out its 4G network and grow its spectrum portfolio, and is sacrificing margins to gain share, isn't a conventional P-E target.
    • Prior T-Mobile/Iliad coverage
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  • Sep. 12, 2014, 11:46 AM
    • T-Mobile US (TMUS +1.7%) added 552K postpaid customers in August, more customer additions than any other month in the company's history, and added 208K prepaid customers, CEO John Legere tells investors at the Goldman Conference in NYC.
    • The wave of new subscribers was in part due to the popularity of a promotion that allows customers to add four lines for $100/month, Legere says.
    • Earlier, Argus upgraded shares to Buy from Hold with a $40 price target, saying a series of innovative plans promoted with razzle-dazzle marketing is gaining traction with subscribers; the firm also expects the latest TMUS offer, which facilitates Wi-Fi communications and interoperability with the cellular network, to resonate with subscribers.
    | 3 Comments
  • Sep. 11, 2014, 2:22 AM
    • T-Mobile (NYSE:TMUS) will provide in-home Wi-Fi antennas called T-Mobile Personal CellSpots for free, enabling phones to now make calls and send texts over Wi-Fi.
    • The new device is in response to many customer complaints of dropped calls in homes and buildings. Until recently, the carrier held very little low-frequency airwaves which are best for penetrating walls.
    | 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.