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Verizon Communications (VZ)

  • Fri, May. 1, 6:07 PM
    • Verizon (NYSE:VZ) and Cogent Communications (NASDAQ:CCOI) averted a possible showdown by striking a multi-year interconnection pact that will govern Internet traffic exchanges between the telecom and the wholesaler.
    • The deal is similar to one that Verizon reached with Level 3 Communications (NYSE:LVLT) previously. Firms like Cogent and Level 3 distribute traffic on behalf of major media firms like Netflix that deliver services via Internet, and they have increasingly fought with carriers over whether they should have to pay to connect to networks.
    • In the meantime, disputes started to slow service for millions by late last year. Cogent founder and CEO Dave Schaeffer says links between the two companies are still "massively oversubscribed."
    • Verizon says the new deal will let networks exchange data more easily, while Cogent points to the fact that it won't have to pay Verizon under the deal.
    • The move makes some peace for the two in an area that is about to get heavy regulatory scrutiny under the FCC's new net neutrality rules. The agency reserved the power for one-on-one rulings in interconnection disputes that might come up if a carrier complains.
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  • Tue, Apr. 28, 8:42 PM
    • During T-Mobile's (NYSE:TMUS) Q1 earnings call, colorful CEO John Legere took another opportunity to hint at the tie-up that increasingly seems to be in the company's future: with a cableco that offers broadband.
    • Just days after FCC opposition killed the Comcast-TWC merger, Legere pointed to the need to counterbalance AT&T (NYSE:T) and Verizon (NYSE:VZ), which combine wireless service with broadband offerings and even TV business.
    • Regulators seem to be opposed to cable-cable deals, and wireless-wireless deals like aborted plans for a Sprint (NYSE:S) merger with T-Mobile -- but Legere notes a natural fit may occur across industries: "The tangential players are touching mobile players in a way that makes a go-to-market strategy."
    • Analyst Craig Moffett urges caution, as regulators might already see the two industries as competition. "Wireless broadband is clearly the FCC's best hope for a counter to cable's wired advantage. They might decide that they aren't ready to allow a combination like that."
    • Possible cable suitors: CMCSA, TWC, CHTR, CVC
    • After earnings today, TMUS -0.3%.
    • Related: T-Mobile US (TMUS) Q1 2015 Results - Earnings Call Transcript (Apr. 28 2015)
    • Previously: T-Mobile grows Q1 revenues 13%, adds 1.8M subscribers (Apr. 28 2015)
    • Previously: T-Mobile keeps fanning Dish partnership flames (Mar. 06 2015)
  • Mon, Apr. 27, 6:11 PM
    • A few months after Dish Network (NASDAQ:DISH) made the surprise bids in the FCC's AWS-3 wireless spectrum auction, the FCC may reject the company's $3.3B in small-business discounts it sought, The Wall Street Journal reports.
    • The discounts have been unapproved since the auction. Competing bidders including T-Mobile (NYSE:TMUS), AT&T (NYSE:T) and Verizon (NYSE:VZ) -- along with FCC commissioner Ajit Pai -- raised loud complaints about Dish's use of two designated entities, SNR Wireless and Northstar Wireless, to bid for $13.3B in spectrum but pay only $10B.
    • FCC Chairman Tom Wheeler reportedly told his staff after the auction that something didn't "smell right." Both Dish Network and its partner in Northstar Wireless stuck up for the practice.
    • If the discounts are rejected, the small companies would have to pay back the discounts or risk losing the licenses.
  • Mon, Apr. 27, 12:47 PM
    • ESPN (NYSE:DIS) has filed a lawsuit against Verizon (NYSE:VZ) alleging the programmer's "skinny bundle" FiOS Custom TV is a breach of contract, bringing the simmering disagreement to a legal head.
    • "We are well within our rights under our agreements to offer our customers these choices," a Verizon spokeswoman told Variety in response.
    • Verizon is offering smaller program bundles in its base package, while ESPN argues its contract prohibits including its networks on a separately priced tier.
    • The suit was filed in the New York Supreme Court.
    • Twenty-First Century Fox (FOX, FOXA) had joined Disney in refusing to air ads for Verizon's new service in some markets.
    • Previously: Bundle fight: Verizon says Disney refusing ads for new service (Apr. 23 2015)
    • Previously: More challenge Verizon's new TV bundles (Apr. 22 2015)
  • Thu, Apr. 23, 5:21 PM
    • Verizon (NYSE:VZ) says that Walt Disney (NYSE:DIS) -- one of a group of program providers that claim Verizon's new slim cable packages violate their contracts -- is refusing to carry Verizon's ads for the new packages.
    • NBCUniversal (NASDAQ:CMCSA) and Twenty-First Century Fox (FOX, FOXA) joined Disney this week in saying that Verizon's plan to let subscribers choose smaller, cheaper bundles violated their carriage agreements. Verizon CFO Fran Shammo said firmly that the company wouldn't retract the product.
    • Fox and NBC haven't pulled the ads so far. Disney owns the ABC Network as well as the ESPN networks.
    • The new Verizon plans, designed to offer more variety than large one-size-fits-all bundles, start at $55/month for a smaller channel lineup. They're available on Verizon's FiOS service, which has 5.7M TV subscribers.
    • Previously: Disney: Not so fast on skinny bundling, Verizon (Apr. 17 2015)
  • Wed, Apr. 22, 8:29 PM
    • Google's Project Fi wireless MVNO (mobile virtual network operator) service will piggyback on the networks of Sprint (S +2%) and T-Mobile (TMUS +2.2%) when it's not using Wi-Fi to route calls and data -- and while traffic is better than "no traffic," analysts at Cowen and Evercore say it won't mean much benefit for the two wireless firms.
    • Colby Synesael of Cowen says that financial gains will be limited for the two (and for Google): It's all about Google trying to shape the market in ways that might eventually pay off. The offer is "compelling" on price and technology and could make a monetary difference if device support grows, but it's more likely about carriers making Fi's practices mainstream, he says.
    • On price, the data giveback and international aspects of Fi could pressure AT&T (NYSE:T), Sprint and Verizon (NYSE:VZ) to follow suit, Synesael writes.
    • Evercore's Jonathan Schildkraut found the announcement in line with expectations, though "we also would not rule out a potential relationship between GOOG and the MSOs' Wi-Fi networks as another way to dis-intermediate the traditional carrier," he writes. "Not as Bad as Expected for T and VZ. We view the higher than expected toll to get on the network ($20) as likely better for carriers than anticipated."
    • Previously: Google launches Fi mobile service - $20/month for voice/text, $10 per GB (Apr. 22 2015)
  • Wed, Apr. 22, 3:24 AM
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  • Tue, Apr. 21, 5:00 PM
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  • Tue, Apr. 21, 8:53 AM
    • Verizon (NYSE:VZ) is flat premarket after a first quarter where it added 565K net retail postpaid wireless connections (up 4.8% Y/Y) and churn fell back to 1.03%, from a prior-year 1.07% and Q4's 1.14%.
    • On an adjusted basis, EPS of $1.02 was up from last year's $0.84 after accounting for gains from the company's acquisition of full ownership of Verizon Wireless in February 2014. EBITDA of $11.95B beat expectations by $420.4M.
    • Revenue by segment: Wireless, $22.3B (up 6.9%; Service revenue of $17.9B, equipment revenue of $3.4B); Wireline, $9.5B (down 2%; Mass market revenue of $4.6B, Global Enterprise of $3.3B, Global Wholesale of $1.5B).
    • Operating income of $8B was up 11.2%, and operating income margin up to 24.9% from the prior year's 23.2%. EBITDA margin rose to 37.4% from 36.7%.
    • The company's monetization of tower assets led cash flow from operations to rise to $10.2B from $7.1B, but excluding tower impact, free cash flow was up to $4.2B from $3B.
    • FiOS revenues were up 10.2% Y/Y, to $3.35B. Verizon added 133K net new FiOS Internet and 90K net new FiOS Video connections to bring totals to 6.7M Internet and 5.7M Video connections.
    • Verizon's retail postpaid average revenue per account fell to $156.14 from $159.67. Smartphone postpaid accounts rose to 91.4% of phones activated.
    • Press release
  • Tue, Apr. 21, 7:40 AM
    • Verizon (NYSE:VZ): Q1 EPS of $1.02 beats by $0.07.
    • Revenue of $31.98B (+3.8% Y/Y) misses by $290M.
    • Shares +0.36% PM.
    • Press Release
  • Mon, Apr. 20, 5:30 PM
  • Fri, Apr. 17, 9:13 PM
    • A spokesperson for ESPN (NYSE:DIS) has weighed in on reports that Verizon (NYSE:VZ) will offer unbundled or "skinny" packages to give customers choice about what they receive -- and ESPN says that's not allowed.
    • “Media reports about Verizon’s new contemplated bundles describe packages that would not be authorized by our existing agreements," says the company's statement. "Among other issues, our contracts clearly provide that neither ESPN nor ESPN2 may be distributed in a separate sports package.”
    • The move's unsurprising coming from ESPN, which charges the highest prices per subscriber by far among national cable peers, reportedly now more than $6/month. That compares with TNT at around $1.48/subscriber month.
    • ESPN has made defending bundles a policy priority in Washington, and companies with powerful bundles of channels like Disney (with the various flavors of ESPN as well as the Disney Channel and Soapnet) can force channels with low or no consumer interest into bundles with the desired flagship stations to build their audience.
    • The statement suggests Verizon didn't get a sign-off from Disney before talking about unbundling, though Peter Kafka reports that Verizon's Alberto Canal said the company had gotten authorization from all programmers in its new bundle.
  • Fri, Apr. 17, 7:54 PM
    • Mobile phone consumers might be happy, but the industry's price war is showing up as average revenue per account is dropping, according to Cowen's quarterly wireless survey.
    • Bills fell for a second straight quarter, to an average of $136/month, down from Q4's $141. The biggest drop came to Sprint (NYSE:S), whose "Cut Your Bill in Half" promotion is taking hold by reducing its average bill 14% Q/Q to $132/month.
    • Verizon (NYSE:VZ) is below $150 for the first time in the survey, slipping 5% to $143.
    • On the other hand, AT&T (NYSE:T) was essentially flat at $143/month and T-Mobile (NYSE:TMUS) actually increased ARPA 4% to $121.
    • Sprint may face a churn problem: 24% of subscribers whose contracts are up in the next six months say they'll leave, above the industry average of 13%.
    • Subscribers without contracts are up to 34.5% from Q4's 30.5%, spurred by T-Mobile's huge contract-less base.
  • Fri, Apr. 17, 3:40 PM
    • AT&T (NYSE:T) is a dividend stalwart, yielding 5.7%, but Morningstar DividendInvestor Editor Josh Peters dropped it from his model portfolio in favor of lower-yielding Verizon (NYSE:VZ).
    • He's willing to swap for Verizon's 4.5% yield because the "quality, the safety of the dividend, and the growth of the dividend and the total return it will drive are superior."
    • He lost some patience with AT&T's wandering outside of core business rather than sticking to its knitting and growing the dividend faster than 2%. Verizon is focused on U.S. wireless with better capital allocation, he says.
    • Coverage plays a part as well: "Verizon is covering its dividend 1.5 times with free cash flow. AT&T is just barely covering its dividend now with free cash."
    • Josh Peters video interview
  • Fri, Apr. 17, 4:36 AM
    • Starting April 19, Verizon's (NYSE:VZ) FiOS service will offer new TV packages aimed at giving customers flexibility to purchase only certain groups of channels they want to watch.
    • "While this is not all-the-way a la carte, customers have the ability to consolidate and collapse the kind of content they want to view," announced President of Verizon FiOS Tami Erwin.
    • FiOS’s cheapest plan will cost $55/month and include two channel packs. Each additional package, which can consist of 10-17 channels, will cost $10/month.
    • Customers will also be able to switch to a different channel pack after having one for 30 days.
  • Thu, Apr. 16, 1:31 PM
    • Verizon (NYSE:VZ) is turning to college sports for its mobile-first streaming video service, inking deals with a number of partners to fill out an offering that should have 20-30 channels later this year.
    • The company has deals with ACC Digital Network, Campus Insiders, CBS Sports, ESPN and 120 Sports to join its deal for 200 hours with Awesomeness TV (NASDAQ:DWA).
    • What does Verizon get? "Dozens of live major college games" from CBS and "select live college football and college games" as well as original-entertainment shows like 30 for 30 from ESPN (NYSE:DIS).
    • Pricing and packaging for the service are still unresolved, but Verizon does plan to offer it only via its mobile data plans at first.
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Company Description
Verizon Communications Incis a provider of communications, information and entertainment products and services to consumers, businesses and governmental agencies. Its two segments are Wireless and Wireline.