reports
- Jonathan Chaplin
3Q24 Broadband Trends: FWA capacity limits; FWA demand limits
In this iteration of “Broadband Trends” we update our FWA capacity forecast. We also touch on early signs that demand for FWA may be limited, which could prevent mobile operators from reaching capacity limits (or force them to work harder to get there). This could have a big impact on the pace of Cable subscriber growth. Finally, we reprise our work on the competitive positioning of the various operators based on relative NPS scores.
- Dave Nicoski
- Ross LaDuke
Vermilion Compass: Weekly Equity Strategy
Buy the Pullback Again Our outlook remains bullish following the S&P 500's multi-month base breakout above 5670, alongside healthy market dynamics which have continued to improve. Two weeks ago, our election day Compass report (11/5/24) was titled "Buy the Pullback," and with the S&P 500, Nasdaq 100 (QQQ), and Russell 2000 (IWM) all pulling back to their respective 20-day MAs, we believe it is time to buy the pullback again. We continue to expect significant upside into year-end and the early p...
- Blair Levin
NSR Policy: Trump Designates Carr as FCC Chair
Last night, President-elect Trump designated Commissioner Brendan Carr to be the next Chairman of the FCC. Carr has long been seen as the favorite for the spot. In this note we review what we wrote a year ago what Carr intended to do if appointed Chair and what has changed in the last year, including the increased influence of Elon Musk and Robert Kennedy Jr. (RFK) on Trump Administration policies that might cause internal tensions within Trump circles as well as Trump’s desire to use the FCC to...
- Jonathan Chaplin
FYBR: Verizon acquisition approved!
Shareholders representing 63% of the shares voted in favor of the transaction this morning. We congratulate the Frontier and Verizon management teams for getting the deal done. While we think Frontier should have received more, we recognize that most large shareholders will lock in a very substantial gain while removing uncertainty with this transaction. This is a strong win for Verizon, who will secure a great asset at a great price.
- Jonathan Chaplin
Frontier vs Ziply – did BCE overpay
When examining the very significant premium that Ziply is receiving from BCE over what Frontier has been offered by Verizon, investors have asked two further questions: first, why was BCE willing to pay a higher price for Ziply than they were willing to pay for Frontier (they bid on both assets); second, how do we know they aren’t just overpaying for Ziply. We cover both questions in this brief note.
- Jonathan Chaplin
Frontier vs Ziply – accounting for future opportunities
Investors are inevitably comparing the price that Verizon has offered for Frontier to the price that BCE has offered for Ziply. We have been asked whether buyers would give the operators credit for locations they haven’t deployed fiber to yet. If so, the price for Ziply isn’t so compelling, given their plans to more than double their fiber footprint. The answer: absolutely not! We walk through our thought process in this brief note.
- Blair Levin
NSR Policy: Summarizing Policy Implications of Trump/Republican Victor...
In the previous two months, we published multiple notes on the implications of the election, projecting forward on what would likely happen to market impacting policies in the event of either a Trump or Harris Victory. Here, we link to those notes—you can quickly skip the Harris parts—as well as summarizing key points relating to the likely impact of a Trump victory. We note that the notes involving Musk were the ones we think most underrated (at least they were initially) and important. We a...
- Jan Frederik Slijkerman
- Jeroen van den Broek
- Jesse Norcross
- Nadège Tillier
- Timothy Rahill
- Jonathan Chaplin
USM sells spectrum to AT&T
US Cellular has sold its 3.45GHz licenses and 700MHz licenses to AT&T for $1.0BN. The transaction isn’t a surprise. It follows closely on the heels of the sale of Cellular licenses to Verizon for $1.0BN. USM and TDS have been our favorite small ideas, and this transaction supports the thesis. We run through the implications of the transactions for the parties involved and for spectrum valuations generally in this brief note.
- Jonathan Chaplin
Autumn for Broadband 3Q24
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 quite significantly. We continue to expect further recovery next year, once the ACP headwind has passed.
- Jonathan Chaplin
Frontier Post-3Q24 Model Update
This note focuses on changes to the model following 3Q24 results. Earlier today, we published a comprehensive review of results. Our view of the company remains unchanged, whether as a standalone company or as an acquisition target. Intrinsic value is $64 (but they may only get $48.50 in a deal now).
- Jonathan Chaplin
- Jonathan Chaplin
FYBR 3Q24 Quick Take: Subscribers beat; EBITDA in line; all eyes on th...
Fiber deployment and fiber net adds were both exceptional. EBITDA was in-line, despite the strong growth (higher SAC from higher growth will have been a drag on EBITDA). If Frontier remains independent after November 13th, these results will provide strong support for management’s strategy and execution prowess.
- Jonathan Chaplin
LUMN Quick Hit: Lumen and Google sign PCF contract
The companies announced reciprocal contracts today. Lumen will use Google Cloud, the Google Vertex AI platform, and the Google Gemini model to provide network insights and AI support for customer care. At the same time, Lumen will give Google access to existing fiber and build new fiber on new routes for Google.
- Jonathan Chaplin
BCE + Ziply: quick thoughts following the call
In this note we run through a full analysis of BCE’s acquisition of Ziply, and the implications for Frontier. BCE is paying a 55-117% premium to what Verizon is paying for Frontier, for an asset that is very similar. The Ziply transaction will make it harder to Frontier investors to accept $38.50, and easier for Verizon to offer more.
- Jonathan Chaplin
- Jonathan Chaplin
- Jonathan Chaplin
FYBR Quick Hit: ISS recommends that voters abstain
ISS has delivered a detailed analysis of the deal. They conclude that the board and management managed the deal process well, but that given the long time to close, investors will benefit from more time to assess it. They recommend that investors abstain from the vote. This has the same effect as voting against the deal.
- Jonathan Chaplin
- Jonathan Chaplin
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