Mon, Aug. 24, 11:38 AM
- BT Group's (BT -4%) Americas president has charged Verizon (NYSE:VZ) and AT&T (NYSE:T) with hurting competitors by abusing landline monopolies, and called for tough regulations to force access to the networks.
- The UK telecom serves hundreds of customers in the U.S. but pays to reach the "special access network" -- the portion that goes the last mile into homes and offices -- of which Verizon and AT&T control about 80%.
- The FCC requested data from telecoms on the special access networks last year. BT's Bas Burger points to research suggesting the top two U.S. telecoms are overcharging for that access by about $9B/year.
- Burger is calling for regulated prices there. “For a western world country it is the worst I’ve seen."
- “There is not sufficient regulation to create competition," he says; "almost all access is being provided by two companies and they have divided the country among themselves.”
Mon, Aug. 17, 4:53 PM
- Another brick falls from the contract-wireless wall, as Sprint (S +10.1%) CEO Marcelo Claure tells The Wall Street Journal that the carrier will do away with contracts and shift to a leased-smartphone model by year's end.
- Sprint introduced a lease option last year, and ending its subsidies means that leasing or upfront purchase will be the only ways to get a smartphone from the carrier.
- The move leaves AT&T (T +0.5%) as the only carrier of the U.S. big four that is still offering to subsidize a smartphone buy. Verizon (VZ +0.1%) made its major move earlier this month, and all are following in T-Mobile's (TMUS +1.9%) footsteps on dropping contracts.
- Earlier, Sprint rolled out its "iPhone Forever" plan that served as a precursor to the model: For $22/month over and above the usual monthly fees, customers can upgrade to the latest iPhone as soon as it becomes available, rather than once every two years. Claure says parent SoftBank (OTCPK:SFTBY -1%) will help it monetize traded-in phones.
Thu, Aug. 6, 12:07 PM
- In a unanimous vote, the FCC denied T-Mobile's (NYSE:TMUS) request for a larger spectrum set-aside during the government's wireless airwaves auction next year.
- The carrier -- now the third-largest by customers in the U.S. -- had lobbied for a larger chunk of spectrum to be set aside for smaller carriers (i.e., not AT&T and Verizon) in the low-band auction, an area of the spectrum that the two giants dominate.
- There will be a set-aside, just not the 40 MHz that T-Mobile was seeking, in what is seen as a compromise by the FCC's Democrats after last year's vote to establish reserve spectrum.
- The FCC is working to keep the auction on track for the first quarter, and it's currently expected March 29. The agency is finalizing bidding procedures.
- Wireless Carriers today: T -1.3%; VZ -0.5%; TMUS -0.5%; S +2.4%.
Wed, Aug. 5, 10:56 AM
- On the Discovery Communications (NASDAQ:DISCA) earnings call, CEO David Zaslav said the company has made a deal with Verizon (NYSE:VZ) to supply its video service with "long and short-form content" -- full episodes of prior seasons, and clips of current series.
- "This deal extends our platform reach to Verizon customers beyond our traditional pay TV customer base, and adds yet another source to our distribution revenue stream," he said.
- The agreement will include content from channels including Discovery Channel, TLC, Animal Planet, ID, and the Science Channel, Zaslav noted.
- After trading up premarket following its Q2 earnings beat, Discovery shares are now 5.6% lower.
- Previously: Discovery up 0.4% after Q2 beat amid currency challenges (Aug. 05 2015)
- Previously: Discovery Communications beats by $0.01, misses on revenue (Aug. 05 2015)
Mon, Aug. 3, 6:25 PM
- ProShares is shuttering its UltraShort Telecommunications ETF (TLL -5.7%), the fund that bets against big telecoms like AT&T (NYSE:T) and Verizon (NYSE:VZ), due to lack of interest.
- The fund -- a double-short fund working on the inverse of the Dow Jones U.S. Select Telecommunications Index -- will close after the market on Sept. 14. Trading had slowed to about 100 shares on average.
- Top components of Dow Jones' telecom index that the fund bet against are AT&T, Verizon, SBA Communications (NASDAQ:SBAC), Level 3 Communications (NYSE:LVLT), CenturyLink (NYSE:CTL), T-Mobile (NYSE:TMUS), Frontier (NASDAQ:FTR) and Sprint (NYSE:S).
- TLL was down 7.6% over the past six months. The iShares U.S. Telecommunications ETF (NYSEARCA:IYZ) -- tracking the same index from the other direction -- is down 0.5% YTD.
Tue, Jul. 28, 3:39 PM
- HBO (TWX +1.3%) has set a new outlet for HBO Now, striking a deal with Verizon (VZ +0.4%) to make the stand-alone streaming service available to Verizon's broadband customers -- as well as to the carrier's upcoming mobile video service.
- The service is available starting today at HBO Now's standard terms ($14.99/month, 30-day free trial). The companies say the deal allows HBO Now to come to all Verizon digital platforms, including more than 100M Verizon Wireless customers.
- Verizon's mobile video platform, to be called Go90, has been taking shape in recent days and is expected to roll out in late summer.
- Previously: Verizon to test video service with thousands of customers (Jul. 27 2015)
- Previously: Verizon video details: Go90 service to be free to consumers (Jul. 24 2015)
- Previously: HBO Now service comes to Android, Amazon devices (Jul. 16 2015)
Wed, Jul. 22, 11:05 AM
- Macquarie is the contrarian so far on Verizon (NYSE:VZ), reiterating its Sell rating on the shares after a Q2 report that beat profit expectations.
- Verizon shares are off 1.3% this morning, to $46.37, following on yesterday's 2.4% loss. Verizon shares are down 9% over the past 12 months.
- Several firms backed up their Buy ratings. Oppenheimer reiterated an Outperform rating and $54.00 price target, and Canaccord did the same at the same price.
- Jefferies has maintained its Buy rating, but cut its target to $53 from $54.
- Previously: Verizon: Video on track this summer; forecasts still tough (Jul. 21 2015)
- Previously: Verizon -2.4% after Q2 revenues miss expectations (Jul. 21 2015)
- Previously: Verizon beats by $0.03, misses on revenue (Jul. 21 2015)
Tue, Jul. 21, 9:22 PM
- On Verizon's (VZ -2.4%) earnings call today, CFO Fran Shammo took the opportunity to play down expectations of a big lift coming from a new iPhone in the fall: "I just don't see that the next iconic device is going to be substantially different and therefore ... I don't see the volume there in the fourth quarter that we had last year from a total iconic change of the 6 and the 6 Plus."
- Mobile TV is coming this summer -- but "late summer." Live events (pay-per-view) and highly targeted ads (thanks to AOL) will be the drivers of the service, he said, and it would include a sponsored data model to provide free content as well.
- The company now sees full-year revenue growth of 3% rather than 4%, as the prevalence of industry discounts is throwing off forecasts, and phone financing is changing the mix: "Edge (the company's no-money-down option) is much higher than we anticipated, but the market has moved us there," says Shammo. "More people are selecting the new price plan when they get a new handset. Generates more equipment revenue and puts more pressure on the service revenue."
- Meanwhile, some observers thought the mobile price war was cooling, but "Trends this quarter may prove disappointing on that front," says New Street's Jonathan Chaplin.
- While the company agreed to sell wireline operations in three states to Frontier Communications, Shammo says FiOS divestitures aren't on the way: "The broadband connection to those [Eastern U.S.] homes along with our wireless product and the population of that segment is critical to us and it is a strategic asset for us."
- Previously: Verizon -2.4% after Q2 revenues miss expectations (Jul. 21 2015)
Tue, Jul. 21, 8:30 AM
- Verizon (NYSE:VZ) is off 2.4% premarket after posting Q2 results where its revenue missed expectations slightly despite growing more than 2% as the company added subscribers.
- Earnings of $1.04/share beat consensus, and 2.4% revenue growth would be 2.8% if excluding 2014 revenues from business that it has sold. Cash flow from operating activities was up to $18.9B in H1, compared with a year-ago $14.8B.
- In wireless, the company added 1.1M net postpaid connections at retail to come to 103.7M total retail postpaid connections. Retail postpaid churn fell to 0.9%, lowest in three years.
- Revenue breakout: Wireless, $22.6B (up 5.3%); Wireline, $9.4B (down 2.2%). Of wireline results, Mass Market results were up 3.2%, but global enterprise fell 6.4% and global wholesale slipped 4.5%.
- FiOS revenues were up 10% Y/Y. Net adds were 72K FiOS Internet and 26K FiOS Video.
- Conference call at 8:30 a.m. ET (beginning now).
- Press Release
Tue, Jun. 30, 9:48 AM
- U.S. wireless firms are all trading higher out of the open as RBC Capital raises price targets on AT&T (T +0.2%), T-Mobile (TMUS +1.3%) and Sprint (S +1.1%).
- Verizon (VZ +0.2%) is also up comparably with AT&T.
- The firm's best rating of the three goes to T-Mobile, with an Outperform. RBC raised its price target to $41; it's currently trading at $39.17.
- AT&T gets a Sector Perform rating and a raised price target of $37 (currently trading at $35.83), and Sprint gets a Sector Perform and a higher target of $6 (currently at $4.56).
Fri, Jun. 26, 11:59 PM
- Despite some friendly talk around consolidation, Cablevision (NYSE:CVC) is an "un-acquirable asset," says a key telecom industry analyst.
- Craig Moffett of MoffettNathanson thinks shares are overvalued and artificially high since a wave of roiling M&A action following the breakup of Comcast's takeover bid for Time Warner Cable.
- The company has too much competitive overlap with Verizon (NYSE:VZ) FiOS, he says.
- "After factoring in its already below-market trailing growth rates, and its FiOS-affected forward growth prospects, Cablevision's shares appeared markedly overvalued even before the latest round of speculation," Moffett writes.
- Today: CVC +4%.
Thu, Jun. 25, 10:15 AM
- Verizon (NYSE:VZ), up 1.2% early today, has a new multi-year deal with Scripps Networks Interactive (NYSE:SNI) to supply Verizon's new video offering with lifestyle programming from HGTV, Food Network, Travel Channel, DIY and Cooking Channel.
- More than 45 series are part of the deal, including popular shows like House Hunters and Cutthroat Kitchen.
- Verizon notes that young millennials' over-the-top video consumption rose 21% last year, and smartphone viewing is growing rapidly as a portion of that (up 10% from 2014).
- Verizon had previously given a few clues as the look of the service, which wil work on competitor networks and Wi-Fi as well as mobile devices, and will have a premium tier while exploring ad-supported data options to help keep bits streaming to viewers.
- Previously: Verizon hints at video service details (Jun. 24 2015)
- Previously: Verizon closes speedy $4.4B AOL deal (Jun. 23 2015)
Tue, Jun. 23, 10:06 AM
- Just 42 days after announcing a deal, Verizon (VZ +0.8%) has wrapped its $50/share cash acquisition of AOL, as its tender offer expired at midnight last night.
- AOL will no longer be traded on the NYSE and is a wholly owned subsidiary of the telecom. Some 60.4% of shares were validly tendered, and other shares have been converted into a $50 cash right.
- Tim Armstrong will continue to lead AOL operations, but now by reporting to Marni Walden, Verizon's executive VP of product innovation and new businesses. Bob Toohey, president of Verizon Digital Media Services, will report to Armstrong.
- Previously: Verizon CFO: We're keeping Huffington Post, not buying Dish Network (Jun. 15 2015)
- Previously: AOL chief to net $179M from Verizon deal (May. 14 2015)
- Previously: Not the old AOL: Verizon purchase all about ads (May. 12 2015)
Fri, Jun. 5, 5:39 PM
- The current wisdom holds that Dish Network (NASDAQ:DISH) and T-Mobile's (NYSE:TMUS) combination bid might have a relatively easy time with regulators, and it shouldn't face debt problems either, says one analyst.
- “Dish bond covenants are very loose,” says Covenant Review analyst Scott Josefsberg, and the satellite provider would have “wide latitude to structure a transaction." Meanwhile, T-Mobile covenants allow for the firm to issue at least $10B more in debt. Dish Network has an enterprise value of $45.8B; T-Mobile's is $52.9B.
- Meanwhile, Citigroup's Michael Rollins says the other option is clear for spectrum-rich Dish: Sell itself to Verizon (NYSE:VZ).
- He thinks that's the likely outcome for a number of reasons, including the need for Verizon to keep up with AT&T/DirecTV, the spectrum shortage that Verizon currently faces heading into next year's incentive auction, and the chance for Dish to make a shift to IP video to "dramatically" increase magnitude and duration of video cash flows.
- He has Dish and T-Mobile rated at Buy and raised T-Mobile's price target to $46, while maintaining Dish's target at $94. Today: DISH +1.7% to $75.51; TMUS +2.3% to $40.24; VZ -1.8% to $47.25.
Tue, Jun. 2, 6:46 PM
- Mogul John Malone floated an interesting idea today: Forget Sprint and T-Mobile -- the wireless industry could get its third major alternative to Verizon and AT&T (NYSE:T) with the merger of Charter Communications (CHTR -1.6%) and Time Warner Cable (TWC -0.9%).
- Malone was speaking at his various Liberty companies' annual meetings and noted that in 2012, the cable consortium SpectrumCo got an option to participate in a wireless MVNO service with Verizon (NYSE:VZ) after the wireless firm bought $3.9B in frequencies.
- Charter wasn't in SpectrumCo then, but merger partners TWC and Bright House are. “The concept that Comcast, a greatly enlarged Charter and Cox could together offer a WiFi-optimized connectivity service with a default to a Verizon MVNO is an interesting concept," Malone said.
- He thinks "there's very little dirty underwear" left to be found in a regulatory review of Charter-TWC after the past year's scrutiny.
- Also of interest regarding Charter capex and the dividend: “Everybody's going to say, ‘Oh he’s spending too much capital,’ but I think the end result with be worth it ... To a large degree we’re betting on Tom Rutledge and his team to wake up a sleepy cable company that was treading water in all honesty for a while and trying to satisfy shareholder pressures with buybacks and dividends as opposed to putting the money into having a competitive service offering.”
- Malone company shares today: LMCA -0.1%; LMCB flat; LMCK flat; LTRPA -0.9%; LTRPB +2.2%; QVCA +0.8%; LBRDA +0.1%; OTCQB:LBRDB flat; LBRDK -0.1%.
Tue, May 12, 3:44 PM
- After earnings last week, AOL CEO Tim Armstrong pointed out how programmatic ads were key to the company's growth -- and now they're the key to its $4.4B acquisition by a video-focused Verizon (NYSE:VZ).
- For Verizon, the timing and focus will be on an upcoming video service that is likely to focus on shorter clips rather than long shows (in keeping with their stated target of mobile-viewing millennials) and would combine key assets in the OnCue service it bought from Intel and the ad-insertion tech that AOL provides. The benefit would come in faster, better ad sales. AOL's Platforms unit grew revenues 21% to $279.8M.
- Wells Fargo's Jennifer Fritzsche points out the difference between Verizon's strategy and that of AT&T: "While T believes there is a greater need to own more physical infrastructure (through DTV), VZ is building up more assets to strengthen its 'mobile first' OTT initiative -– with advertising playing a key role."
- Verizon's approach to video is cheaper, too, notes Andrew Dowell in comparing a 4.4B AOL deal with a $49B DirecTV deal: "Verizon is going after millennials. AT&T has its eye on their parents."
- Meanwhile, Macquarie has downgraded Verizon to Underperform, from Neutral, with a new price target of $45. Shares today are trading down 0.4% to $49.61; AOL is up 18.5% to $50.47.
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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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