Telecom Weekly Notes: Sprint, Clearwire and Verizon

September 16th, 2011 by Trefis Team
-68.89%
Downside
20.47
Market
6.37
Trefis
S: SentinelOne logo
S
SentinelOne

This week the rumored Sprint (NYSE:S) and Apple (NASDAQ:AAPL) iPhone deal gained further strength when Bloomberg announced that Sprint will offer the iPhone next month with an unlimited data plan. [1] Clearwire (NASDAQ:CLWR) announced that it will collaborate with China Mobile (NYSE:CHL), the world’s largest telecom player in terms of number of subscribers, to accelerate the development of TD-LTE devices. [2] Verizon (NYSE:VZ) introduced a new unlimited prepaid plan taking on rivals Sprint and MetroPCS (NYSE:PCS), as they continue to add customers seeking contract-free service. ((Verizon to launch Unleashed $50 unlimited prepaid plan nationwide Thursday, FierceWireless, September 13th, 2011))

Here are some of the key updates from the week on these names.

Sprint

Relevant Articles
  1. Sprint’s Stock Looks Expensive Compared To AT&T After Rising 93% In 2 Months!
  2. Sprint’s Stock Price Doubled In 15 Days; Is Market Overvaluing Sprint Just Before Its Merger With T-Mobile?
  3. Where Is Sprint Corp Spending Most Of Its Money?
  4. Machine Learning Answers: Sprint Stock Is Down 15% Over The Last Quarter, What Are The Chances It’ll Rebound?
  5. Sprint Valuation: Fairly Priced
  6. How Does Sprint Make Money?

We believe Sprint offering unlimited data plans with the iPhone would be a good move as it would be a unique selling point for Sprint, with competitors AT&T (NYSE:T) and Verizon (NYSE:VZ) having already put caps on their data plans.

Unlimited data plans attract mobile subscribers as they allow people to access the Internet, share photos and watch videos without worrying about escalating data bills. If Sprint does indeed offer the iPhone with an unlimited data plan, it will help the company lure heavy iPhone data users who may eventually defect from Verizon or AT&T’s networks, especially as AT&T’s service is well known for dropping calls.

In other news, Sprint’s CFO Joe Euteneuer said that the company is fully prepared to sell the iPhone, though he did not confirm that the carrier will indeed sell the device. [3]

See Sprint’s Unlimited Plan Could Win Some Data Junkies from AT&T, Verizon

See our company analysis

Clearwire

Clearwire, a leading provider of 4G wireless broadband services in the U.S., saw its stock rise by more than 7% on the news of a partnership agreement with China Mobile. Sprint has a 54% non-controlling stake in Clearwire, and also utilizes Clearwire’s 4G wireless broadband network, and we believe that this deal could indirectly benefit Sprint.

See Will a Clearwire-China Mobile Partnership Benefit Sprint?

Verizon

Prepaid plans, which have historically been marketed to lower-income customers, are becoming more attractive to all demographics as costs decline and handset choices improve. Verizon’s move to tap this market shows that it believes there is further growth potential in prepaid. Incidentally, AT&T also made a few tweaks this week to its GoPhone prepaid plans, including the introduction of a new $25 plan as well as new international and roaming features. [4]

See our company analysis

Notes:
  1. Sprint Said to Plan Unlimited Data Offer With Apple’s IPhone, Bloomberg, September 10th, 2011 [↩]
  2. China Mobile and Clearwire Announce Collaboration on TD-LTE Devices, Clearwire press release, September 14th, 2011 [↩]
  3. Sprint: We’re ready for the iPhone (but not confirming it), FierceWireless, September 14th, 2011 [↩]
  4. AT&T unveils $25 prepaid GoPhone plan, FierceWireless, September 13th, 2011 [↩]