TMT 1Q25 results: Verizon, T-Mobile US, AT&T and IBM/Most value in 4-y...

The three largest mobile telecom operators in the USA - Verizon, T-Mobile USA, and AT&T - continue to perform well. IBM's performance also looks solid. Notable was the strong EBITDA performance for all three mobile telecom operators. We think the notes with a duration of c.4 years look attractive on a spread basis, while the steepness of the spread curve looks healthy. Furthermore, the Euro notes of T-Mobile US with a somewhat longer duration look attractive.

The Great Replatforming, part I – the Special Theory

Capex ROI is the trending question these days, but what does it actually mean? In a “replatforming”, capex are enablers of revenue growth and productivity enhancements, as long as they are the foundation for a good “right to make money” (a defensible competitive advantage) and meet good demand. Our “Special Replatforming Theory” looks at how it has been at play for a decade already at hyperscalers, and how we expect the next 10 years to play out, with AI bringing an even more capital-intensive...

Rumours of further cost reductions

Mobile traffic growth: still no sign of stabilisation

Rethinking BEAD 2.0 as States Rethink Their Options

Earlier this month, as expected, Secretary of Commerce Lutnick released new rules for BEAD, requiring all the states to rebid and prioritizing the lowest cost option. Our initial reaction was that the new rules would shift funds from fiber to satellite, a negative for wired providers including CMSCA, CHTR, T, and VZ/FYBR. We still think that but in talking to numerous stakeholders, that magnitude of the shift may be less than we initially thought. In this note we examine two themes that have ...

Swisscom (Neutral, TP: CHF575, +3%) Sunrise (Neutral, TP: CHF38, -13%)...

We recently held investor calls with senior management at Salt (HERE), Swisscom (HERE) and Sunrise. We provide a summary in this report. We are Neutral on all three names, but if domestic conditions are indeed improving, as was suggested, then we would become more positively inclined. In addition, we can see how all three look attractive on a yield relative basis to the now 0% Swiss central Bank rate, that is seemingly heading to negative territory again.

Mobile and broadband pair trades to consider this summer

While we have been intensively focused on such things as a Presidential intervention to prevent a Chapter 11, we admit that our mind occasionally drifts to thoughts of summer. So to help others who may have similar thoughts, we thought, in honor of summer beginning, we should provide our thoughts as to which alcohols pair best with the purchase of the stocks we cover (actually, we just asked ChatGPT and, given its attitude about intellectual property, we have no fears about just cutting and pas...

Updates on VZ in CA and Upcoming SCOTUS Decision on USF

Verizon just filed a response to questions raised by the California Public Utilities Commission (CPUC) related to DEI and the Supreme Court, as early as today but no later than the end of month, will rule on the case challenging the legality of the current framework for the Universal Service Fund (USF). In this quick note, we analyze the VZ filing and the likely outcomes and impacts of the Court ruling.