Tag Archives: tmus

T-Mobile ‘Blowout’ Q1 Eases Worry Over Low-Credit Subscriber Base

T-Mobile US ( TMUS )raised 2016 subscriber and cash-flow guidance and reported Q1 revenue that topped views, sending shares in the Uncarrier-branded wireless service provider up. T-Mobile said it earned 10 cents per share in the March quarter, excluding the after-tax impact of a spectrum sale, in line with consensus estimates. T-Mobile reported a 9-cent per share loss in the year earlier period. Revenue rose 11% to 8.6 billion vs. expectations of $8.4 billion in sales. T-Mobile, controlled by Deutsche Telekom ( DTEGY ), has been gaining subscriber and revenue market share vs. Verizon Communications ( VZ ), AT&T ( T )  and Sprint ( S ) for over two years. T-Mobile’s Binge-on free video plan and other promotions in Q1 were expected to keep its momentum going. T-Mobile fell 0.8% to 40.86 in morning trade in the stock market today  after rising 2% in premarket trading. T-Mobile rose 2.4% on Monday, hitting a six-month high and nearing the 8 1/2-year high of 43.43 set on Sept. 21. One overhang on T-Mobile stock has been concern that mobile phone financing plans support lower-credit quality customers  and that a weakening economy would add company debt. Craig Moffett, an analyst at MoffettNathanson, says worries could be overblown. “T-Mobile’s blowout first-quarter results not only include falling bad debt, but also near record-low post-paid customer turnover,” said Moffett in a report. T-Mobile said it added 2.2 million subscribers in Q1, up from 1.8 million in the year earlier period. Prepaid subscriber additions jumped to 807,000 from 73,000. T-Mobile added  877,000 postpaid phone lines vs. 748,000 a year earlier. “Bad debt declined sequentially, highlighting efforts to improve credit policies,” said Mike McCormack, analyst at Jefferies, in a report. Verizon on April 21 reported Q1 results and said it lost 8,000 postpaid phone subscribers. AT&T reports Q1 earnings after the market close today. Bellevue, Wash.-based T-Mobile raised its 2016 postpaid phone subscriber forecast to 3.4 million at its midpoint of guidance, up from its earlier estimate of 2.9 million. “The net add guidance raise was not all too surprising, since the Street was already projecting 3.6 million for 2016,” said Jennifer Fritzsche, an analyst at Wells Fargo in a report. T-Mobile expects adjusted EBITDA (earnings before interest, taxes, depreciation and amortization)  to be in the range of $9.7 to $10.2 billion, up from the previous guidance of $9.1 to $9.7 billion.

How Charter Broadband Conditions May Set Bar For Comcast

Charter Communications ( CHTR ) will not be allowed  to charge data usage-based prices or impose data caps on broadband customers for seven years as part of proposed conditions set by federal regulators  for its acquisition of Time Warner Cable ( TWC ). Whatever conditions Charter agrees to might set the bar for Comcast ( CMCSA ) down the road, analysts say. The Department of Justice on Monday cleared Charter’s purchase of TWC, while the Federal Communications Commission moved closer to approval.  FCC Chairman Tom Wheeler is circulating proposed conditions to the five-member agency. California regulators are expected to green light the purchase in mid-May. Charter snapped up TWC after regulators thwarted Comcast’s takeover of Time Warner Cable in early 2015. Conditions set on the Charter-TWC deal might have implications for Comcast if it seeks another major acquisition, such as acquiring T-Mobile US ( TMUS ) or Sprint ( S ). Comcast has filed to be a possible bidder in a government auction of radio spectrum owned by local TV stations. That auction began in late March. Comcast has been testing data caps in an increasing number of markets. “New Charter will not be permitted to charge usage-based prices or impose data caps,” Wheeler said in a statement. “Second, New Charter will be prohibited from charging interconnection fees, including to online video providers, which deliver large volumes of internet traffic to broadband customers.” Video streamer Netflix did not oppose Charter’s purchase of TWC, but it had lobbied against the Comcast-TWC deal. Charter can’t strike agreements with programmers that would make it more difficult for streaming services like Netflix ( NFLX ) to obtain content, according to a DOJ filing in federal court. Charter has also agreed to buy privately held Bright House Networks. The two deals would make Charter the No. 2 cable TV firm behind Comcast.

Dish, Verizon Spectrum Talks Might Heat Up By Q4, Says Citi

Negotiations between Dish Network ( DISH ) and Verizon Communications ( VZ ) over a radio spectrum sale might heat up after an ongoing government auction of airwaves is over, said Citigroup, which on Monday added the satellite TV broadcaster to its “focus list” of stocks. The Federal Communications Commission in late March began its Broadcast Incentive Auction of airwaves owned by local TV stations. The complex auction is expected to drag on until Q4, says Citigroup. Dish Network, meanwhile, has amassed some 77 MHz of radio spectrum, spending some $15 billion in the process, according to Citi’s estimate. Dish, however, lacks a wireless partner to deliver mobile video services. Citigroup maintains a price target of 94 on Dish stock. Shares in Dish have dropped over 30% since June, to near 50. Dish stock was up 1% in morning trading in the stock market today . Citigroup expects results of the current auction to reinforce the valuation of Dish’s airwaves. “Our target price values (Dish’s) spectrum at $36 billion, or roughly $1.78 per MHz-pop, less than the $2.09 per MHz-pop we believe Verizon would be willing to pay,” said the Citigroup report. “MHz per pop” refers to the spectrum available in a specific market. Citigroup analyst Jason Bazinet says Dish is more likely to sell, rather than “operationalize,” its spectrum by building out a wireless network. Wireless competition has intensified among AT&T ( T ), Verizon, T-Mobile US ( TMUS ) and Sprint ( S ). “Carriers that have filed to participate in the TV auction — like Dish and Verizon — cannot pursue M&A while the auction is underway,” wrote Bazinet. “But, they can enter M&A discussions after the auction ends. Since we expect the auction to end in Q4 2016, we expect the Street to ascribe some sort of M&A likelihood into their valuation calculus for Dish.”