reports
- Blair Levin
NSR Policy: Wireless Update: Kennedy Cancer Concerns
Plus, a Round One Win for T on 4.9 GHz, TMUS modifies DEI initiative, Carr Signals Hope for Reallocating Military Spectrum as CTIA Presses on Its Spectrum Needs and Its New Leader (Pai) Signals Splits with Carr on Merger Review Approach While there have been major developments in the last week on the future of USF, BEAD, and merger reviews, there have been smaller, but still significant, developments related to the future of wireless services. In this update, we cover those developments. The on...
- Jonathan Chaplin
Four killer insights from day one
We just wrapped up day one the Future-of-Connectivity conference that we host every year with BCG. We gleaned new insights into the risk of the broadband market getting more competitive, wireless market growth, what is driving the convergence imperative, and Lumen’s appetite for asset sales.
- Blair Levin
What Does Carr’s DEI Merger Ban Mean for TMUS, Media and Other Deals
Immediately after the election, investors were excited about the prospect of easier government approvals of transactions. However, as we have previously discussed, that is not the way the review process is working out. A further indication of the transaction barriers came up over the weekend, as multiple articles appeared stating that FCC Chair Carr would block any deal that requires FCC approval where a party has a DEI program. We have previously written about how Carr’s view on DEI would app...
- Jonathan Chaplin
Quick Take: T-Mobile raises prices
We have been getting questions on press reports that T-Mobile is raising prices on certain legacy plans by $5/line. The price increases were actually leaked a few weeks ago. We wouldn’t normally comment on news that broke weeks ago, but thought we would use this as an opportunity to touch on a couple of data points that have emerged over the course of the last couple of weeks.
- Blair Levin
NSR Policy: What Does BEAD State Bidding Tell Us?
Last week, we provided several notes analyzing how Congressional Republicans and the Administration, as well as others, were debating changes in the BEAD program. While that rhetoric pointed to significant changes ahead, the states have been proceeding under the existing rules set in the Biden Administration, making significant progress in ways generally not reflected in the DC discussions. In this note, we summarize the state activity and ISP bidding to date. We analyze what the state activi...
- Blair Levin
NSR Policy: Musk (and TMUS) Prevail (Kinda) Over T and VZ at FCC
In a note last fall, we predicted that if Trump were elected, Elon Musk would be the most powerful force in telecom policy, elevating satellite priorities over the policy priorities of traditional communications networks. One of the issues we pointed to where that influence might be exercised involved potential SpaceX interference with T’s cellular network. This past Friday, that FCC addressed that issue, granting a conditional waiver to SpaceX regarding out-of-band emissions (OOBE) that will i...
- Philip Burnett
MVNO Rates: EchoStar vs. Cable
A question we are often asked is how much the carriers charge MVNOs for wireless services. While working through EchoStar’s 10-K we noticed new reporting that seems to show the MVNO fee it paid in 2022 and 2023. In this brief note we unpack the relevant EchoStar reporting and compare the implied MVNO cost per subscriber to our estimates for the Cable MVNO.
- Blair Levin
NSR Policy: BEAD Adjustments Certain but Details Still Cloudy
Yesterday, we published a note on whether T, VZ/FYBR and CHTR or Musk will come out on top with revisions to the BEAD program that Republicans are contemplating. As we noted, there are numerous changes we felt confident Republicans would do, such as removing a fiber preference, that will have no material impact on publicly traded companies. But there are several other changes that could, including whether the federal government will impose a high-cost threshold on states that will shift funds f...
- Jonathan Chaplin
LUMN: mass markets sale must happen!
We gleaned insights down at Metro Connect that convince us that AT&T, Verizon, and T-Mobile all need to buy Lumen’s Mass Market business. We understand the challenges with the deal that has been presented, but those can be fixed. We suspect the asset will transact soon, and it will be a strategic win for whomever gets it.
- Blair Levin
- Jonathan Chaplin
Carriers could spend $180BN on spectrum over the next four years
In this note we cover the potential timing of all the major spectrum auctions and transactions that could occur during the current administration, the amount of financial capacity the carriers have for purchasing this spectrum, and the intrinsic value of the spectrum. The analysis has important implications for EchoStar and for the three national carriers.
- Jonathan Chaplin
Autumn for Broadband 4Q24
In this installment of our Autumn for Broadband series, we provide a quick update on trends in the broadband market based on what we have seen from the companies that have reported so far. Adjusted for ACP, trends have improved again with net adds flat vs. last year. We expect organic net adds to recover next year due to lack of ACP headwind. Though the recovery could be impacted by immigration related headwinds.
- Jonathan Chaplin
A signal in satellite noise?
We covered our impression of T-Mobile's Super Bowl ad offering its Starlink-based direct-to-device (D2D) service when it aired. While not news, we just noticed that the commercial generated 13x more engagement than the median Super Bowl ad, by far the most of any ad aired during the game. Investors have been questioning whether consumers will be interested in taking a D2D service as well as what they will pay for it. The strong engagement the T-Mobile ad generated may offer a clue as to the firs...
- Jonathan Chaplin
A smart innovation from T-Mobile
Everyone watching the Super Bowl undoubtedly saw T-Mobile’s launch of its direct-to-device service. This text-based service offered in conjunction with Starlink has been on the cards for a while. The innovation: they are offering the service to AT&T and Verizon customers. I don’t mean that their competitor’s customers have to switch to T-Mobile to get the service; I mean that you can stay a Verizon customer and get T-Mobile’s direct-to-device service. It’s free during the beta launch period,...
- Jonathan Chaplin
Winter for Wireless
Four of the five carriers that have reported so far expect to increase or maintain net adds in 2025. The sell-side has taken them at their word; consensus expectations reflect a sharp increase in adds for the group in 2025. We think net adds will decline in 2025. Somebody will miss expectations, potentially by a lot. We walk through who is most at risk of missing on adds or EBITDA in this note.
- Jonathan Chaplin
- Russell Waller
KPN (Neutral, TP: €4.0, +12%) Q4 24: B2C SR outlook is a concern – res...
KPN has reported a slightly weak set of numbers with SR -0.7% light and EBITDAaL -0.2% below consensus expectations. Guidance for 2025 EBITDAaL is in-line with medium-term ambitions but c0.5% below consensus that was ahead of those targets. Adjusting for the various M&A deals, B2C SR is weaker at +1.0% y/y from +2.7% y/y, with B2C mobile +0.3% y/y from +6.7% y/y and B2C fixed +1.3% y/y from +1.0% y/y. Given the slowdown here, and the slightly disappointing EBITDA guidance, we think Neutral remai...
- Jonathan Chaplin
T-Mobile 4Q24 Model Update
We have updated the model following results. See slide 11 for a discussion of guidance in historical context. We increased 2025 phone net adds, EBITDA and FCF. Consensus is all but certain to follow. For quick thoughts following the call, click here. For a review of results, click here. Target price $276 (+19%).
- Jonathan Chaplin
TMUS: Quick thoughts following the 4Q24 call
In this note we focus on trade-offs the company is making between growth and margin, buybacks in 2025, cash available for M&A and what they may buy, FWA results, the outlook for mobile and broadband market growth, and the implications of the management change.
- Jonathan Chaplin
- Blair Levin
The CHTR/CMCSA/TMUS Dance: Comparing Government Approvals?
As the market perceives a larger window opening for M&A, there has been significant interest in the relative ease or difficulty of the antitrust/regulatory path for approval for two potential suitors for CHTR—CMCSA and TMUS. In this note we analyze both the traditional antitrust considerations (advantage CMCSA), the current political elements (advantage TMUS), how both can act in ways to mitigate the risks, events in the future that might change, and how the transaction may affect the ultimate ...
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