- TMUS reported strong postpaid net ads in fourth quarter.
- GOOG decides to enter into MVNO arrangement with TMUS and S.
- MVNO arrangement will help TMUS increase its future revenues.
- TMUS shares have rallied strongly since hitting lows in December.
- Fundamental weaknesses in its balance sheet and financials are overlooked.
- Flaws of TMUS's aggressive strategy and 'Uncarrier' model are not given enough attention.
- Expectation of increased profitability due to glut of new subscribers is exaggerated.
Update: T-Mobile Adds More Subscribers In Q4 Without Adding Value
- T-Mobile released solid Q4 customer additions.
- The stock remains a Sell.
- The data released by T-Mobile doesn't change the ongoing investment thesis that the stock must be avoided until aggressive pricing stops hitting earnings.
- T-Mobile looks to boost ARPU with Data Stash's minimum 3GB+ requirement and looks to upsell entry level users higher to attain the value features.
- With only a 1GB threshold tablet plan minimum, Data Stash can complement tablet promotions to drive 2015 tablet net additions.
- With the new crop of new prime customers switching to T-Mobile for value, Data Stash is another value feature that can be used for subscriber retention.
T-Mobile Subscriber Momentum Expected To Continue As ARPU Becomes Pressurized
- Company has done well in competitive environment and has managed to build solid subscriber momentum in the third quarter.
- Growth expected to continue in future due its competitive pricing and industry-best 4G LTE speeds.
- ARPU to be pressurized in the future due to aggressive pricing, which limits management’s ability to expand margins.
iPhone 6: T-Mobile Brings Exciting Cyber Monday Deals
- 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.
Update: T-Mobile Q3 Earnings - And The Momentum ContinuesSoid Ahmad • Oct. 29, 2014
- 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.
T-Mobile: Still The Best Stock For Growth In Telecoms
- 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 • Sep. 22, 2014
- 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.
Today, 1:57 AM
- Not only is Google (NASDAQ:GOOG) preparing a new cellphone service that will dial up pressure on the wireless industry’s business model, Cablevision (NYSE:CVC) is also prepping one.
- Google’s new package will hunt through cellular connections provided by Sprint (NYSE:S) and T-Mobile (NYSE:TMUS) and WiFi "hot spots," picking whichever offers the best signal to route calls, texts and data, WSJ reports.
- Meanwhile, Cablevision will start offering Freewheel next month, a WiFi-only mobile-phone service.
- Such services pose a challenge to traditional telecom carriers, including AT&T (NYSE:T) and Verizon (NYSE:VZ).
- Previously: Report: Google to sell phone plans via Sprint, T-Mobile (Jan. 21 2015)
- Previously: Analysis: Cable WiFi services to go mainstream (Oct. 06 2014)
Wed, Jan. 21, 4:09 PM
- Two day after reporting on Google's (GOOG +2.2%) SpaceX investment (confirmed a day later), The Information reports Google (GOOG +2.2%) is getting ready to "sell mobile phone plans directly to customers and manage their calls and mobile data over a cellular network."
- Google won't be building its own network, but will instead operate as an MVNO leveraging Sprint (S +5.8%) and T-Mobile's (TMUS +1.9%) networks. Deals for wholesale network access are reportedly on the way. Sprint and (to a lesser extent) T-Mobile have caught a bid on the report.
- Becoming a U.S. mobile carrier with Sprint/T-Mobile's help risks upsetting AT&T (NYSE:T) and Verizon (NYSE:VZ), who still tower over the local telecom landscape. However, it also gives Google a chance to experiment with novel/low-cost service plans, perhaps with the hope that other carriers (in the U.S. and elsewhere) will follow suit. Google also might be betting Android is too well-entrenched at this point for AT&T and/or Verizon to respond too harshly.
- Last April, The Information reported Google has discussed offering mobile services in Google Fiber markets. Q4 results arrive in eight days.
- Update: The WSJ is backing up The Information's report. It adds Sprint is "hedging its bet by putting a volume trigger into the [Google] contract that would allow the deal to be renegotiated if Google’s customer base swells."
Tue, Jan. 20, 11:28 AM
- Believing T-Mobile (TMUS +1.4%) will see "an inflection to positive and rapidly growing [free cash flow] in 2015," Goldman's Brett Feldman has upgraded the Un-Carrier to Conviction Buy from Neutral, and hiked its target by $10 to $37.
- Feldman also thinks T-Mobile will provide strong 2015 EBITDA guidance, thanks to slowing expense growth and higher MetroPCS synergies. He forecasts 2015 EBITDA of $7.7B (above a $7.09B consensus), and has upped his 2015 net postpaid subscriber add estimate by 500K to 3.5M (implies further share gains).
- Meanwhile, in comments that might be aimed at U.S. politicians and regulators more than investors, Deutsche Telekom (OTCQX:DTEGY) CEO Tim Hoettges insists T-Mobile's current approach isn't sustainable, and that a merger is the U.S. subsidiary's best long-term hope for achieving needed scale. "I was intrigued by the idea of having a combination with Sprint and being the ‘super-maverick’ in the market. I hope that the political environment will change at one point in time."
- T-Mobile and (especially) Sprint plunged last year after Sprint abandoned its merger efforts in the face of FCC/DOJ opposition. T-Mobile's recent postpaid share gains likely influenced regulatory thinking.
Sun, Jan. 18, 12:57 PM
- TechCrunch reports Google (NASDAQ:GOOG) is interested in acquiring Softcard, the mobile payments platform launched by AT&T (NYSE:T), Verizon (NYSE:VZ), and T-Mobile (NYSE:TMUS) in 2010 - it was previously known as Isis, before changing its name for obvious reasons. Though Softcard's owners have invested hundreds of millions in the venture, sources state Google's purchase price could be below $100M.
- Like Apple Pay and Google Wallet, Softcard relies on NFC radios to enable transactions. And like Wallet, it has struggled to get off the ground, as U.S. consumers overwhelmingly stick with card swipes. Hard data on Apple Pay usage remains limited for now.
- Softcard recently laid off 60 employees. Meanwhile, it was reported in 2013 that Google had spent $300M on Wallet-related acquisitions, with little to show for it. The adoption of EMV (chip-and-PIN) readers by U.S. retailers could give NFC solutions a boost, by making card payments a little less convenient.
- The WSJ reports Google is partnering with consulting giant PwC to bid on a $2B+ contract to update the DoD's electronic health records system. PwC says Google's tools could both improve the system's security and performance, and lower costs. A group featuring IBM, HP (NYSE:HPQ), and CSC has made a rival bid.
- Ad tech firm Marin Software (NYSE:MRIN) provides some encouraging mobile search data ahead of Google's Jan. 29 Q4 report. A Marin study found mobile accounted for 49% of Q4 U.S. search ad spend, up from 42% in Q3, and that smartphone ad click rates were 38% higher than PC rates (thanks in part to accidental clicks?). On the other hand, mobile still only accounted for 32% of conversions.
- Medium writer Backchannel provides a deep dive into Google Search's evolution in an era where users increasingly want search engines to know the precise meaning of their queries. Part 1 looks at Google's efforts to optimize for mobile (aided by its Knowledge Graph and Google Now). Part 2 looks at Google's real-world research into the information needs of users. Part 3 looks at Google's investments in A.I./deep learning to deliver far more intelligent search results and spontaneously surface useful information.
Fri, Jan. 16, 6:19 PM
- Through its existing partnership with Wal-Mart, Sprint's (NYSE:S) Virgin Mobile brand is offering new prepaid shared data plans: A 2-line, 4GB plan goes for $65/month; a 3-line, 8GB plan goes for $90/month; and a 4-line, 12GB plan goes for $115/month.
- Virgin/Wal-Mart are also selling new individual prepaid plans: $35/month for 300 minutes, unlimited text, and 2.5GB of unthrottled data, and $45/month for unlimited talk/text and 2.5GB of unthrottled data.
- Sprint is abandoning the Virgin Mobile Custom brand (offered via Wal-Mart since last August), which the carrier says led to confusion among would-be customers. However's it's keeping Custom's ItsOn platform, which allows a primary account holder to decide how much of a shared data bucket goes to a particular user, as well as buy additional data, through an app.
- T-Mobile (NYSE:TMUS), meanwhile, has rolled out its Simply Prepaid plans. $40/month gets unlimited talk/text and 1GB of 4G data (3G speeds beyond that); an extra $10 and $20 respectively yields 3GB and 5GB of 4G data.
- Both carriers may have gained prepaid share in Q4: Sprint had 410K prepaid net adds, and T-Mobile 266K branded prepaid net adds. Sprint's calendar Q4 (FQ3) report arrives on the morning of Feb. 5.
Wed, Jan. 7, 12:01 PM
- As John Legere recently predicted, AT&T (T -1.7%) has followed T-Mobile's (NYSE:TMUS) lead in allowing users to roll over unused mobile data, but with some fine print attached: While T-Mobile is letting Simple Choice plan users roll over unused data for up to 12 months, AT&T is only letting Mobile Share Value plan users roll over for one month.
- The announcement comes on a morning where T-Mobile reported 1.28M Q4 branded postpaid subscriber adds (1.04M phone, 239K mobile broadband). AT&T, which reports on Jan. 27, had 785K postpaid net adds in Q3 (~450K from tablets and "computing devices")
- The rollover announcement follows AT&T's launch of new enterprise machine-to-machine (M2M) data services and developer tools at CES, and a deal with theft-recovery service leader LoJack to power its telematics services for cars and commercial fleets. AT&T added over 500K connected car subscriptions in Q3.
- Shares are lower as a result of trading ex-dividend.
Wed, Jan. 7, 10:34 AM
- T-Mobile (TMUS +1.6%) added 1.28M branded postpaid subscribers in Q4 - down slightly from 1.38M in Q3 but up from 869K a year ago, and evidence of further share gains fueled by the carrier's aggressive pricing. Branded postpaid phone net adds totaled 1.04M, and branded mobile broadband net adds 239K.
- 266K branded prepaid subs were added vs. 411K in Q3 and 112K a year ago. M2M sub growth totaled 152K vs. 222K in Q3 and 172K a year ago, and MVNO sub growth amounted to 434K vs. 333K in Q3 and 492K a year ago.
- For the whole of 2014, T-Mobile added 8.3M subs, including 4.9M branded postpaid and 4M branded postpaid phone subs. The branded postpaid base stood at 27.2M at year's end (25.8M phone), and the branded prepaid base at 16.3M.
- In his 2015 predictions (previous), CEO John Legere suggested T-Mobile will try to add to its momentum by targeting U.S. consumers who still don't have a smartphone (roughly 1/4 of the populace) and/or Internet access, as well as SMBs.
Dec. 31, 2014, 2:31 PM
- "AT&T (T -1.1%) will find new ways to cause their customers pain [in 2015] - especially those still on grandfathered unlimited plans," predicts T-Mobile (TMUS +0.3%) CEO John Legere, feisty as ever while making his 2015 predictions. The FTC recently sued AT&T for throttling the data speeds of unlimited plan users.
- Legere, whose company has unleashed a margin-crimping price war against over the last two years, also forecasts AT&T will launch a "knock off" version of T-Mobile's Data Stash feature, which lets users roll over unused data from monthly buckets for up to 12 months. "The fine print will be massive, and they’ll miss the first and most important step in the process – which is to stop punishing their customers with domestic overages and instead get rid of them."
- He isn't any kinder to Verizon (VZ -0.8%), predicting Big Red will "keep trying to baffle American wireless customers with BS promos, like the one they did this year telling customers they could get a free iPhone 6 (don’t forget to read the small print!), as well as misleading advertising about everything from coverage maps to device trade-ins."
- As for share-losing Sprint (S +0.6%), Legere sees them "continue throwing out campaigns, offers and promotions – anything to see if it sticks." By mid-year, he expects the carrier to "realize they can’t slash their way to growth and start to invest in their network and customer care."
- Two things Legere has kind words for (besides T-Mobile): 1) Apple Watch (NASDAQ:AAPL), which he predicts will "mark the tipping point when wearables go from niche to mainstream." 2) Phablets, which he expects will see 50% sales growth next year and thereby boost data usage.
- One positive prediction for the industry in general: Legere forecasts 2/3 of devices sold next year by carriers will be subsidy-free, up from 41% in 2014. The margin improvement that has come from moving customers from subsidies to early-upgrade and installment plans has been a silver lining for the industry during its price war.
Dec. 19, 2014, 12:33 PM
- The FTC had accused T-Mobile (TMUS +1.5%), along with its three nationwide rivals, of billing users for unauthorized charges related to mobile content/services (i.e. cramming).
- The carrier will pay at least $90M to subscribers hit with the charges. It will also pay $18M in state fines, and $4.5M to the FCC.
- AT&T has already agreed to pay $105M to settle similar charges. A $105M settlement with Sprint is on tap.
Dec. 16, 2014, 2:34 PM
- A new service feature called Data Stash will allow T-Mobile (TMUS -1.7%) subs to roll over any unused data from a monthly bucket to subsequent months.
- There's no limit on how much data can be stored. New customers will also get a 10GB data reserve on top of their monthly allotments.
- The incentive comes after T-Mobile began allowing users to add tablets to their postpaid plans for free in April. Last year, it struck deals to give subscribers free 3G data in dozens of international markets.
- A promo involving relatively cheap unlimited 4G family plans was launched last week.
Dec. 12, 2014, 2:15 PM
- Less than a year after unloading its 45% Verizon Wireless stake for $130B, Vodafone (VOD -3.1%) says it will re-enter the U.S. mobile market as an MVNO leveraging T-Mobile's (TMUS -0.4%) network. A launch is expected in "late autumn 2015."
- The service will be aimed at the 400 U.S.-based multinationals Vodafone already counts as clients, as well as the 500 foreign multinational clients that "have a strong U.S. presence."
- The choice of T-Mobile as a partner will likely raise some eyebrows among Vodafone clients, given the "Un-carrier" has a much smaller corporate customer base than Verizon and AT&T. T-Mobile's penchant for aggressive pricing might have helped win Vodafone over.
Dec. 12, 2014, 6:56 AM
- SoftBank (OTCPK:SFTBY) will soon downsize its Silicon Valley offices, Reuters reports, signaling the company won't revive efforts to buy T-Mobile (NYSE:TMUS).
- The Japanese telecommunications company is also looking to rent out one of two buildings it leased at an annual cost of over $3M, which it had previously designated for T-Mobile.
- The "bulk" of its West Coast manpower is now set to be transferred elsewhere, including the dispersal of development engineers to Sprint (NYSE:S) headquarters in Kansas.
Dec. 9, 2014, 4:12 PM
- In its latest aggressive pricing maneuver, T-Mobile (TMUS -8.5%) is charging just $100/month for unlimited voice, text, and 4G data for a family of two, and $40/line for each additional user up to a limit of 10. Data tethering is capped at 5GB.
- With a family of four paying $180/month, the self-proclaimed Un-carrier asserts its plan is respectively $30/month, $100-$140/month, and $180/month cheaper than comparable AT&T, Sprint, and Verizon plans.
- The announcement comes in the wake of a Verizon Q4 warning (blamed in part on price pressure) that sparked a selloff in U.S. mobile carriers. AT&T later followed suit by stating it expects churn to be up Y/Y in Q4.
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.
Dec. 8, 2014, 5:41 PM
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.
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