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.
AT&T (T) is taking aim at the no-contract mobile market. The company plans to roll out its Aio Wireless brand nationwide starting next month.
The move puts T-Mobile (TMUS) in the cross-hairs. The magenta carrier's "Uncarrier" strategy has been credited with cauterizing customer losses. T-Mobile added 688K customers in Q2, the first postpaid gain in 16 quarters.
Providing some color: T-Mobile sued AT&T last week, claiming that the color of Aio's branding is an attempt at a "free ride from T-Mobile’s success as America’s Un-carrier by using magenta in its marketing."
AT&T has floated the Aio Wireless brand in 11 southern U.S. cities to date.
Jefferies reiterates its Buy rating on T-Mobile (TMUS +1.5%) and hikes the PT to $28 from $25. Analyst Thomas Seitz: Q2 "results were outstanding ... the disruptive 'Uncarrier' strategy likely has started yielding positive results." T-Mobile added 688K customers in the quarter, the first postpaid gain in 16 quarters.
Seitz maintains a Hold rating on Boingo Wireless (WIFI -4.5%) and raises his PT to $7.50 from $6.50. Boingo "continued to further diversify its rev stream away from retail subscription & single-use segments & towards wholesale & advertising ... which gives us incrementally more confidence in the company's strategy."
Analyst Cynthia Meng reiterates a Buy rating on China Telecom (CHA -0.7%) but lowers her PT to $60 from $64 on reduced expectations of FY 2013 and 2014 earnings (0.9% and 5% respectively) following the company's 1H results.
Still in the process of digesting MetroPCS, T-Mobile USA (TMUS +4.4%) says it isn't interested in outbidding AT&T (T -0.7%) for Leap Wireless (LEAP -1.2%).
Leap has slipped a little on the news, but is still at $16.53. AT&T agreed to buy Leap for $15/share in cash and the net proceeds from the sale of spectrum previously bought for $204M.
T-Mobile continues to trade higher thanks to its Q2 results, replete with strong (iPhone-driven) postpaid net adds, and solid 2H subscriber guidance.
Citi (Neutral) isn't crazy about T-Mobile's numbers. The firm notes service revenue still fell 7.5% Y/Y to $5.1B (below Citi's $5.22B estimate) and estimates OIBDA (hurt by iPhone sales) fell 58% Y/Y to $739M (below Citi's $1.1B estimate) after adjusting for Value Plan accounting changes.
The firm remains concerned about T-Mobile revenue/OIBDA growth prospects in light of " the rapid maturation of the prepaid category & competitive pressures in its postpaid segment."
CEO John Legere asserts T-Mobile is "taking customers from AT&T at a ratio of two to one." If true, that represents a big reversal from recent trends.
Deutsche Telekom (DTEGF.PK +6.6%) reports Q2 EBITDA of €4.4B, in-line. Net income comes in at €530M (+10% Y/Y) .
The company lowers 2013 guidance, forecasting EBITDA of €17.5B versus a prior €18.4B. The most pessimistic analyst estimate was €17.6B.
The company's T-Mobile USA (TMUS +6.2%) unit saw a big turnaround, adding a net 688K contract customers in the quarter (compared to a net loss of 557K customers in Q2 2012). The increase, driven by iPhone sales and new contract-free service plans, represented T-Mobile's first postpaid gain in 16 quarters.
DT will continue to raid cash flows to fuel customer growth. CEO Rene Obermann: "We are winning droves of customers on both sides of the Atlantic."
The company expects to add 500K-700K new customers in H2 2013 in the U.S through aggressive marketing, iPhone sales, and the expansion of its LTE network.
Spurned by Sprint and Clearwire, Charlie Ergen states during Dish's (DISH +0.9%) Q2 call T-Mobile USA (TMUS -2.4%) could be the satellite TV provider's only M&A option. Nonetheless, he adds "there's a lot of options for [Dish] in the wireless business."
T-Mobile initially spiked higher on the comments, but has since given back its gains. Speculation about a Dish/T-Mobile tie-up has been around for a while.
Dish submitted a $2.2B bid for bankrupt Lightsquared's spectrum in July, a move that has the backing of some Lightsquared creditors.
U.S. Trade Representative Michael Froman has quashed a decision by the International Trade Commission (ITC) to ban the U.S. sale of some older Apple products for violating a Samsung (SSNHY.OB) patent that enables devices to transmit multiple services at the same time via 3G.
The ITC had wanted to bar the iPhone 4, the iPhone 3GS, the iPad 3G and the iPad 2 3G that were designed for use on networks operated by AT&T (T), T-Mobile (TMUS) and two regional operators. The prohibition was due to come into effect this week.
In a letter, Froman said he overturned the ban because it gave Samsung "undue leverage" to delay rivals' use of a standard-setting technology, although he noted that the South Korean company can appeal in the courts.
The Pentagon suggests in an FCC filing it's willing to largely move off the 1755MHz.-1780MHz. spectrum band, which is coveted by T-Mobile USA (TMUS -0.9%) and other carriers. The filing follows the arrival of House legislation proposing to reallocate the band for commercial use, and opens the door to pairing the spectrum with frequencies in the 2155MHz.-2180MHz. band, which the FCC is set to auction off. The DoD hasn't provided a timetable for when it will leave the band, and other details still need to be worked out. (FCC H Block auction) (T-Mobile spectrum purchase)
AT&T (T) responds to T-Mobile USA's (TMUS) Jump smartphone upgrade plan by launching its own monthly installment/early upgrade offering, and Verizon Wireless (VZ, VOD) might not be far behind. AT&T Next lets users pay for devices via 20 monthly installments, and with no activation/upgrade fees. Unlike Jump ($10/month, no contract, 2 upgrades/year) there's no additional monthly fee, but there is a service contract requirement, and a 12-month wait between upgrades. Meanwhile, a leaked Verizon slide suggests the carrier is about to launch VZ Edge, a plan that combines installments with the option to upgrade after a device is 50% paid off.
"We believe AT&T (T) is overpaying for Leap’s (LEAP) spectrum," says BMO's Kevin Manning, expressing a common view. He estimates AT&T is paying $5.25B for Leap after factoring debt and lease obligations, or $2.31/MHz/POP. That's well above the prices attached to recent spectrum deals (I, II), something attributed to a desire to keep Leap out of T-Mobile's (TMUS) hands. Much of Leap's spectrum resides in the AWS band, where T-Mobile has a huge presence. Though few analysts expect a higher bid, Leap closed 13% above AT&T's offer price, in part due to expected spectrum proceeds. One unanswered question: What will happen to AT&T's AIO prepaid brand, given the carrier's plans to support Leap's Cricket brand? (AT&T/Leap: I, II)