Tag Archives: dtegy

Facebook’s WhatsApp Tests Video Calls; Wireless Firms On Edge?

Facebook ’s ( FB ) WhatsApp is reportedly testing a new, free video calling feature, as both Facebook’s social networking platform and its messenger services like WhatsApp push further into communications. The video calling feature is being tested on a limited basis, says a  report  by tech new site The Verge. Facebook’s emerging video calling platform poses a challenge to Microsoft ‘s ( MSFT ) Skype, analysts say. Facebook’s relationships with wireless service providers have been touchy, although its social platform is a big driver of data consumption for U.S. wireless firms such as AT&T ( T ) and Verizon Communications ( VZ ) as well as other players globally. T-Mobile US ( TMUS ) in March shot down speculation it was working with Facebook on a “sponsored” plan that would exempt usage from monthly data caps. Facebook’s friction with wireless firms has been more apparent in emerging markets, such as Latin America. At the Mobile World Congress in Barcelona in February, Facebook CEO Mark Zuckerberg said the relationship between telecom carriers and  Facebook’s WhatsApp and Messenger is “symbiotic,” not hostile. Zuckerberg said that while “there might be tension in any relationship,” he sees greater use of photos and videos in messaging services as boosting data usage. In India, however, wireless firms Bharti Airtel and Vodafone Group ( VOD ) in early May asked regulators to stop phone calls made through mobile apps. Originally a text messaging service, WhatsApp rolled out free voice calling options to both Apple ( AAPL ) iOS and Android-based mobile phones last year. WhatsApp says it has 1 billion users worldwide. Facebook, though, hasn’t generated much revenue from WhatsApp, which it acquired in 2014 for $19 billion. Aside from WhatsApp, Facebook has taken other steps into communications. Facebook Messenger, a separate app, launched a group calling feature in April. Facebook has also expanded live video streaming to both Apple iPhones and Android software-based devices. Alphabet ’s ( GOOGL ) Google, meanwhile, is also active. Google has been working with Sprint ( S ), Deutsche Telekom ( DTEGY ), Vodafone and others to develop next-generation messaging technology based on a standard called Rich Communications Services, or RCS.

T-Mobile Could Gain From Spectrum Flood, But Not If Auction Drags On

T-Mobile US ( TMUS ) stands to gain from the availability of more radio spectrum than expected in a government auction of airwaves, though it’s not good for the wireless communications provider if the auction drags on, says a Goldman Sachs report. T-Mobile says it could spend up to $10 billion in the auction. Other bidders are expected to be AT&T ( T ), Verizon Communications ( VZ ) and cable TV firm Comcast ( CMCSA ). The complex “Broadcast Incentive Auction,” which started March 29, is expected to free up airwaves now owned by local TV stations. The Federal Communications Commission said Friday as much as 100 MHz of spectrum may be available for bidders in most U.S. markets. About 70 MHz had been forecast. The next step in the auction involves setting initial prices for the airwaves in specific cities. “While broadcasters will only sell if they get their desired prices, a large spectrum supply may yield attractive prices for wireless carriers,” Brett Feldman, a Goldman Sachs analyst, said in a report. “We view this as most positive for T-Mobile, which is looking to bolster its thin low-band spectrum position in this auction so it can provide coverage that is more competitive with AT&T’s and Verizon’s.” UBS analyst John Hodulik had a similar view. “Greater spectrum availability is a positive for T-Mobile, given its low-band needs and Comcast,” Hodulik said in a report. Shares in T-Mobile, controlled by Deutsche Telekom ( DTEGY ), are about even in 2016. T-Mobile stock edged down 0.4% in the stock market today . Analysts say one overhang on shares in Verizon, AT&T and T-Mobile is how much they may spend in the auction. Another view is that telecom mergers and acquisitions are on hold until the auction is over. While the auction has been expected to be over in the September quarter, it may drag on until the fourth quarter. That would be a negative for “ Dish Network ( DISH ) and T-Mobile, since many investors believe that their strategic options will be limited until the auction concludes,” said Feldman. Citigroup recently said Dish Network, which has amassed some 77 MHz of radio spectrum, could resume talks with Verizon over a possible sale after the auction ends.

T-Mobile Stock Reverses Despite Q1 Hailed As ‘Blowout’

T-Mobile US ( TMUS ) raised 2016 subscriber and cash-flow guidance and reported Q1 revenue that topped views, but shares in the Uncarrier-branded wireless service provider quickly reversed. 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 4.1% to 39.50 near the market close in the stock market today  after rising 2.5% early to 42.20, a seven-month high and near the the 8 1/2-year high of 43.43 set on Sept. 21. T-Mobile rose 2.4% on Monday. IBD’s Take: Get dialed in on T-Mobile US stock, and how it stacks up vs. its wireless rivals with IBD Stock Checkup 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. Verizon and AT&T shares fell fractionally Tuesdsay afternoon. 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.