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.
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.
Nov. 14, 2014, 1:41 PM
- Pay-TV operators lost about 149K subscribers in Q3 to represent the industry's worst performance ever for the period, according to data compiled by Leichtman Research Group.
- The mark is slightly better than the 179K subs loss that Moffett Nathanson forecast.
- Based on seasonal trends, Leitchman forecasts a small increase in subscriber growth for Q4.
- Cable/satellite/telco Q3 sub scorecard: Comcast (NASDAQ:CMCSA) -81K, Time Warner (NYSE:TWX) -182K, Charter Communications (NASDAQ:CHTR) -24K, Cablevision (NYSE:CVC) -56K, Suddenlink +2.2K, Mediacom -19K, Cable ONE -14.1K, DirecTV (NASDAQ:DTV) -28K, Dish Network (NASDAQ:DISH) -12K, AT&T +216K, Verizon (NYSE:VZ) +114K, Others/Private -65K.
- Based on seasonal trends, Leitchman forecasts a small increase in subscriber growth for Q4.
- Related: Seismic changes coming for pay TV
Nov. 13, 2014, 8:46 PM
- Sony's (NYSE:SNE) new online TV package will price at $60 to $70 per month, estimates Re/code.
- It's a level that is twice what Dish Network (NASDAQ:DISH) plans to charge for a slimmer package, although one that includes ESPN.
- Programming on the Sony streaming service will feature shows from CBS, Discovery Communications, Fox, NBC, Scripps Networks, and Viacom.
- The pitch from the Japanese media giant is that cord-cutters will be drawn in by the captivating way of accessing the content through gaming consoles. A cutting-edge discovery and recommendations service for users is also highlighted by execs.
- Regulatory watch: Potential rule changes from the FCC could level the playing field for the new streamers as they work out their content deals.
- What to watch: A fragmented pay-TV landscape could benefit content producers (DISCA, CBS, FOXA, DIS, LGF, TWX, AMCX) in the short-term as competition heats up, while creating a pricing headache for cable/satellite/telco players (CMCSA, CVC, CHTR, DISH, T, DTV, VZ, TWC).
- The Netflix factor: Many media analysts consider Netflix (NASDAQ:NFLX) an add-on for consumers - instead of an either/or decision with online TV.
Oct. 31, 2014, 2:55 AM
- In response to Senator Patrick Leahy's letter last week urging top ISPs to not enter "paid prioritization" deals, Comcast (NASDAQ:CMCSA) and AT&T (NYSE:T) say they have no plans to create the Internet "fast lanes" which would hurt consumers' freedom to roam the Web.
- Verizon (NYSE:VZ) published its response to Leahy on Wednesday, also asserting that it has no plans for "fast lanes".
- The pledges come after the FCC proposed its "net neutrality" rules that prohibit ISPs from blocking content, but suggests allowing some "commercially reasonable" paid prioritization deals.
Oct. 29, 2014, 1:22 PM
- A bid by Aereo to be defined as a cable provider gained support from the FCC with a new proposal out this week which was described in a blog post written by Chairman Tom Wheeler.
- The agency supports "open access" for consumers to high-speed broadband delivery and the right of over-the-top firms to offer programming owned by pay-TV providers and broadcasters.
- In essence, the FCC thinks the bundled pay-TV model should be broken so that consumers will not be forced to pay for channels they never watch.
- What to watch: Though Aero isn't likely to be the ultimate pay-TV disrupter without the deep pockets to license content, the position of the FCC opens the door for other Internet video players to emerge and chips away at the bundled channels model.
- Related stocks: DISH, DTV, CMCSA, CHTR, CVC, TWC, VZ, T, NFLX.
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.
Oct. 21, 2014, 9:37 AM
- Verizon (VZ -0.8%) had 1.52M wireless retail postpaid net adds in Q3, up from 941K a year ago and indicating further share gains in spite of tough price competition; the total base is at 100.1M. Retail prepaid net adds totaled just 9K; the base is at 6.1M.
- Price competition is affecting wireless service revenue growth: Though still better than AT&T/Sprint's, growth slowed to 4.8% from 5.9% in Q2 and 7.5% in Q1. Meanwhile, Edge smartphone upgrade plan adoption contributed to a 28.9% increase in equipment revenue, which in turn contributed to a 190 bps drop in wireless op. margin to 31.9%.
- Retail postpaid churn rose slightly to 1.00% from 0.94% in Q2 and 0.97% a year ago. Retail postpaid ARPA +1% Q/Q and +3.5% Y/Y to $161.24.
- Smartphone users made up 77% of the retail postpaid base at the end of Q3, up from 75% at the end of Q2. Postpaid smartphone sales rose 21% Y/Y.
- Wireline revenue (30% of total revenue) fell 0.8%. Consumer retail revenue +4.5% thanks to FiOS growth and strategic services +1% due to data growth, but small business -4.1% and core -11.7% due to voice declines. Wireline op. margin rose to 2.3% from 1.5% a year ago.
- 114K FiOS video and 162K FiOS Internet subs were added; those figures are up from Q2 levels, but down from year-ago levels. Verizon now has 5.5M FiOS video and 6.5M FiOS Internet subs. Wireline voice connections fell 6.4% Y/Y to 20.1M.
- Verizon still expects 4% 2014 revenue growth; consensus is at 4.6%. Capex guidance has been narrowed to $17B from $16.5B-$17B.
- Q3 results, PR
Oct. 21, 2014, 7:33 AM
Oct. 20, 2014, 5:30 PM
Oct. 16, 2014, 7:11 PM
- Verizon (NYSE:VZ) has lengthened the amount of time needed to pay off a phone obtained through its Edge smartphone upgrade program from 20 months to 24, and is now requiring users to pay off 75% of their current phone's price before being eligible to upgrade (up from 60%).
- The net effect: Monthly payments will be lower, but users will only be able to upgrade phones every 18 months vs. 12 previously.
- Big Red is also increasing the service plan discount given to Edge subs on 500MB-8GB plans by $5/line to $15/line. Those on bigger data plans will still get a $25/line discount.
- Many of the early reactions have been critical. Engadget: "The big problem is simply that this now sounds more like a conventional contract rather than the fast track you were probably expecting." DSLReports thinks Edge is now "slightly worse" than before.
- However, Jefferies notes the changes will boost Verizon's EBITDA (since more of a phone's price has to be paid off), and that its monthly fees are now closer to those paid by users of AT&T's popular Next upgrade plans.
- Overall, the shakeup drives home Verizon's commitment to a premium pricing strategy in the face of never-ending price cuts and aggressive promos from T-Mobile and Sprint, many of which AT&T has responded to.
- Verizon has weathered the storm fairly well to date. Q3 results arrive on Oct. 21.
Oct. 10, 2014, 8:23 AM
- Scooping up Verizon's (NYSE:VZ) tower portfolio could position American Tower as (NYSE:AMT) the new leader in the U.S. tower market, Citigroup says in a note.
- A purchase would help AMT's scale and increase its exposure to VZ as an anchor tenant.
- Related: Bloomberg: Verizon looking to sell towers, could net $6B
Oct. 9, 2014, 6:57 PM
- GE "machines and devices" addressing markets such as rail, aviation, energy, and healthcare will support Verizon's (NYSE:VZ) machine-to-machine (M2M) connectivity services, as well as Verizon's cloud services.
- The companies declare the tie-up will allow them to deliver plenty of value-added services" for GE's Predix software platform for connecting and managing industrial device, including "remote monitoring, diagnostics and the ability to resolve maintenance issues" Verizon and GE will also work to create a global SIM for the connected hardware.
- Like AT&T, Verizon has been busy rolling out services providing mobile connectivity for embedded devices, hoping they can provide a top-line boost as standard mobile service revenue growth slows. Big Red's embedded offerings include services for cars and smart grids.
- M2M module vendors Sierra Wireless (NASDAQ:SWIR) and Novatel (NASDAQ:NVTL) must be pleased to see the partnership. Both companies count Verizon as a client.
- Previous: GE says data business headed for $4B-$5B in sales by 2017
Oct. 6, 2014, 3:32 PM
- Cable industry analyst Craig Moffett thinks the cable/broadband industry is well-positioned to benefit from the gradual consumer shift to WiFi-first services.
- The pieces are falling together for the group as smartphone users increasingly use WiFi connections for data and voice - instead of relying on cellular networks.
- In another two to three years after technology hurdles are cleared, cable WiFi could be the standard, says Moffett.
- Related stocks: TWC, CMCSA, CHTR, CVC, VZ, T
Oct. 4, 2014, 5:14 PM
- Redbox Instant, a streaming video service operated by Verizon Communications (NYSE:VZ) and Outerwall's (NASDAQ:OUTR) Redbox, will shut down next week because the venture has not been as successful as hoped.
- The JV launched in March 2013, and was viewed as a potential rival to Netflix (NASDAQ:NFLX). The service provided subscribers with access to a streaming library, plus the option to obtain credits toward DVD/Blu-ray discs that are available at Redbox kiosks. Customers could also rent or buy titles electronically from a separate library, with rentals starting at $3 for 48 hours, and purchases starting at $9.
- Redbox Instant by Verizon has not disclosed subscriber figures.
- Rumors about a shutdown first surfaced about a week ago; the service had disabled new sign-ups for three months due to a credit card fraud issue.
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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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.
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