Tag Archives: s

Verizon Needs Verizon Wireless More Than Ever [Seeking Alpha]

Verizon Communications Inc. (VZ), with a market cap of $149.49B, provides communications, information and entertainment products and services. Verizon operates in two main segments, including Wireline and Verizon Wireless. While Verizon owns the majority share of Verizon Wireless, Vodafone Group (VOD) owns 45% stake in Verizon Wireless, which is the largest wireless communications services provider in the United States. On April 18, 2013, VZ reported Q1 earnings with strong profit but light revenue.

Strong Results from Wireless

For Q1, 2013, VZ’ EPS increased 15% to 68 cents per share as compared to the year-earlier period, beating analysts’ expectation of 66 cents per share. However, revenue of $29.42B was below analysts’ estimates of $29.55B. The highlight focuses on Verizon Wireless, which added 677,000 “postpaid” customers with service contracts, and the wireless revenue increased 6.8% to $19.5B. VZ also activated 4 million iPhones in the quarter, where the total smartphone activations were 7.2 million for the period. The earnings call transcript for Q1, 2013 result can be accessed here at Seeking Alpha.

Margins

The management does not expect much EBITDA wireline service margin expansion in 2013, but is positioned to improve the margin in 2014. For the wireless end, wireless margin has a target of 49-50 percent. Verizon Wireless was helped by lower costs and the popularity of its data share plans. On the down side, the management noted the cautious behavior from enterprise customers.

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The War Of 4G Long Term Evolution [Seeking Alpha]

Months after the announcement of Softbank’s (SFTBF.PK) $20B acquisition offer forSprint Nextel (S), the bidding war is heating up with Dish Network’s (DISH) $25.5B offering. DISH’s deal will form a unique combination of pay-TV and wireless if it goes through. Ultimately, however, it is the valuation proposition that will matter. The final winner should be the one that provides Sprint the most long-term value, which would be to allow Sprint to compete in the rapid developing 4G LTE market.

Run-Down

Below is a comparison table for the deals from Dish and Softbank:

Dish Network Softbank
Offering $25.5B $20.1B
Spectrum End/4G Sprint and Dish can combine spectrum rights While Japan’s Softbank and China’s China Mobile (CHL) are pushing TD-LTE forward, Sprint and Clearwire’s best 4G bet is to work with Softbank’s TD-LTE.
Edge Install antennas for wireless broadband Softbank has a stronger financial backing
Cost/Potential Reduce cost by combining call centers and back-end functions; could result in $11B of cost synergies, including a 3.3 percent reduction in expenses the first year. Clearwire’s 2.5GHz spectrum is uniquely positioned to be used as a global LTE band, provided a certain band configuration is used.
Penalty/Expected Completion Dish will pay for $600M penalty fee for Sprint to break up Softbank’s deal Expected to complete by mid-2013
Clearwire (CLWR) deal With Dish’s own $5.15B for Clearwire, Sprint buyout bid is not contingent on Clearwire part For Sprint, its own bid for Clearwire is contingent on the Softbank deal, as Sprint needs funding

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Nokia And Sprint: Great Potential For Turnaround [Seeking Alpha]

Nokia Corporation (NOK) and Sprint Nextel Corporation (S) are two telecom related companies that had been under-stressed in the past few years. Sprint had been gaining positive momentum with its announcement of SoftBank and Clearwire deal. However, despite Lumia’s positive feedback, NOK continued to decline in the past two months. Both companies have great potential for strong turnarounds and will be analyzed fundamentally and technically in this article. Investing strategies will also be presented.

Nokia Corporation

NOK was down 2.10% and closed at $3.26 on March 25, 2013. NOK had been trading in the range of $1.63-$5.57 in the past 52 weeks. NOK has a market cap of $12.21B with a beta of 1.58. Despite the positive feedback for Lumia phones, NOK’s share price continues to decline in the past 2 months. Investors need to watch closely for the short-term technical supports before establishing the long-term position.

On February 27, 2013, Argus upgraded NOK from hold to buy with a $6 price target. Analysts currently have a mean target price of $3.69 and a median target price of $3.13 for NOK. Analysts, on average, are estimating an EPS of -$0.05 with revenue of $8.70B for the current quarter ending in March, 2013. For 2013, analysts are projecting an EPS of $0.06 with revenue of $38.36B, which is 3.30% lower than 2012. However, for 2014, analysts are predicting an EPS of $0.15 with revenue of $38.52B, which is 0.40% higher than 2013.

In early March, IDC had forecasted global smartphone shipments to total 918.6 million units in 2013. The total is an increase of 29 percent when compared to a year ago, but has slowed from last year’s annual growth rate of 44 percent. Emerging markets will be the key areas for expansion, which including India, Brazil, and China (account for 33 percent of all smartphone shipments in 2013). NOK’s share price had been declining since mid-January and Stoxx Ltd. had recently stated that NOK, the Finland-based company, will be removed from the Euro Stoxx 50 index.

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Sprint’s Network Vision And Clearwire’s TDD-LTE In Action [Seeking Alpha]

Sprint Nextel (S) is the third-largest carrier in the U.S., serving 48 million customers directly. On Dec. 7, 2012, Sprint announced an agreement to acquire a 50% stake in Clearwire Corporation (CLWR) it does not currently own for $2.97 per share. With Clearwire’s huge spectrum assets and SoftBank’s (SFTBF.PK) capital backing, Sprint Nextel could soon be a big force to compete in the new landscape as spectrum resources become scarcer and high-speed 4G LTE becomes a widespread standard. In this article, the recent developments for LTE networks for Sprint Nextel and Clearwire will be updated.

Sprints Network Vision

“Network Vision is Sprint’s plan to consolidate multiple network technologies into one new, seamless network with the goal of increasing efficiency and enhancing network coverage, call quality and data speeds for customers across the United States. In addition to deploying a new 3G network, Sprint will roll out LTE nationwide. Sprint has launched 4G LTE in 49 markets – including Dallas, Houston, Atlanta and Baltimore – and sites are on-air and implementation is under way in hundreds more,” as quoted from Sprint’s official website.

In the last Q4, 2012 management discussion, Sprint’s management indicated that the company is not changing the outlook of 12,000 sites for Q1, 2013. Sprint had zoning completed on nearly 29,000 sites and leasing completed on over 27,000 sites, with a 34% increase over Q3 for both. Sprint had doubled the number of cities under construction to over 450, and the company had now launched 4G LTE in 58 cities with nearly 170 more expected to launch in the months to come. With over 8,000 sites on air, the number is nearly doubled as compared to 3 months ago.

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China Mobile’s TD-LTE Technology Expanding Fast, Where To Invest [Seeking Alpha]

China Mobile Ltd. (CHL), ranking as the largest mobile carrier in the world with over 722 million subscribers, had spent two years laying the groundwork for implementing TD-LTE, a 4G mobile phone standard developed by China Mobile for nationwide use. On January 23, 2013, China Mobile had revealed the company’s 2013 TD-LTE terminal development strategy. “We plan to adopt multi-mode, multi-band terminals, with basic terminals supporting 5 modes and 10 spectrum bands, and ideally supporting 5 modes and 12 bands. By 2014, we will require that terminals support Band 41,” explained Wang Hengjiang, director of the products division of China Mobile Terminal. China’s Ministry of Industry and Information Technology, MIIT, had recently allocated Band 41 (2500MHz – 2690MHz) for TD-LTE usage.

Schedule for TD-LTE Products and Handsets

For TD-LTE products, China Mobile will develop its customer-premises equipment and data card offering through a focus on Mi-Fi mobile hotspots. China Mobile will begin “friendly user” trials of LTE Mi-Fi and other related products in the first half of 2013. Mi-Fi trial products will be distributed in Q1 2013, and the service is expected to mature enough in Q2 2013 to begin commercial trial preparations. For TD-LTE mobile handset products, China Mobile will launch “friendly user” LTE handset trials in the second half of 2013. TD-LTE handsets will be distributed in Q3 2013, and a commercial trial will be prepared in Q4 2013.

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DISH Is Making Clearwire-Sprint Deal Unclear: Still Long Sprint [Seeking Alpha]

The Clearwire deal is not clear right now. On Jan. 8, 2013, DISH Network Corporation (DISH) formally approached Clearwire Corporation (CLWR) regarding a potential strategic transaction with terms as generally outlined in the Clearwire release, including an offer to purchase all of the Clearwire common shares at $3.30. Sprint Nextel Corporation (S) believes its agreement to acquire Clearwire is superior to the highly conditional DISH proposal.

DISH Proposal Vs. Sprint Response

Clearwire announced the unsolicited, non-binding proposal it received from DISH Network.

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Clearwire Completes Sprint Nextel: A Great Buy With Reduced Risks [Seeking Alpha]

Sprint Nextel (S) is the third-largest carrier in the U.S., serving 48 million customers directly. The company offers wireless and wireline voice and data transmission services to subscribers in all 50 states, Puerto Rico, and the United States Virgin Islands under the Sprint corporate brand, which includes its retail brands of Sprint, Nextel, Boost Mobile, Virgin Mobile, and Assurance Wireless. Sprint Nextel is using two separate nationwide networks: code division multiple access, CDMA, and integrated Digital Enhanced Network, iDen. iDen network will shut down in 2013.

Reducing Risks with SoftBank Deal

Japan’s SoftBank’s $20 billion takeover of Sprint Nextel is the biggest-ever overseas acquisition by a Japanese company. The deal with SoftBank will provide strong capital to enhance Sprint’s financial flexibility while dramatically reducing Sprint shareholders’ risks. Sprint can move on quickly to regain its competitive edge and to expand its network and growth.

Clearwire Acquisition

Sprint may have overpaid for Nextel, but the deal with Clearwire is making a lot of sense and resolving a lot of past issues between Sprint and Clearwire. On Dec. 7, 2012, Sprint announced the agreement to acquire 50% stake in Clearwire Corporation (CLWR) it does not currently own for $2.97 per share. This transaction results in a total Clearwire enterprise value of approximately $10 billion, including net debt and spectrum lease obligations of $5.5 billion. As stated in the report, “Clearwire’s spectrum, when combined with Sprint’s, will provide Sprint with an enhanced spectrum portfolio that will strengthen its position and increase competitiveness in the U.S. wireless industry. Sprint’s Network Vision architecture should allow for better strategic alignment and the full utilization and integration of Clearwire’s complementary 2.5 GHz spectrum assets, while achieving operational efficiencies and improved service for customers as the spectrum and network is migrated to LTE standards.” The report also noted that the transaction is also contingent on the consummation of Sprint’s previously announced transaction with SoftBank. The Clearwire and Softbank transactions are expected to close mid-2013.

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Top 3 Stocks With Unusual Put Activities On Tuesday [Seeking Alpha]

The stock rallied on Tuesday, where Dow Jones gained 0.60%, S&P 500 gained 0.65%, and NASDAQ gained 1.2%. DIA, SPY, and QQQ all managed to close above its 50-day moving average now. 11 sectors gained on Tuesday, with the technology sector leading the gain with 1.31%. Transportation is the only down sector with a 0.08% loss.

For NYSE, 2,069 stocks advanced, 978 declined, and 107 stayed neutral. For NASDAQ, 1,762 stocks advanced, 713 declined, and 117 stay unchanged. In this article, the top 3 stocks with unusual put activities on Tuesday were identified and will be presented for investors / traders to research further.

Read more HERE.