Telecom Weekly Notes: AT&T, Clearwire and Verizon
AT&T’s (NYSE:T) planned acquisition of T-Mobile continues to make headlines, as this week AT&T approached several smaller wireless players like Sprint (NYSE:S) and Leap Wireless (NASDAQ:LEAP) about selling spectrum and subscribers as part of an attempt to save its $39 billion acquisition of T-Mobile. [1] Clearwire (NASDAQ:CLWR) this week said that it is in talks with carriers such as Verizon (NYSE:VZ), AT&T and MetroPCS (NYSE:PCS) about a possible sale of the company’s excess spectrum that could help company fund the LTE buildout. Verizon this week started its ‘Network Optimization Practice’ or the data throttling techniques for data hogs. [2]
Here are some of the key updates from last week on these companies:
AT&T
- With Mid-Band 5G Gaining Momentum, What To Expect From Verizon’s Q1 Results?
- Up 8% Year To Date As 5G Gains Traction, What’s Next For Verizon Stock?
- Up 25% Over The Last Three Months, Will Verizon See Further Gains Following Q4 Results?
- Down 50% From Covid Highs, Will Verizon Stock Recover Post Q3 Results?
- Will Verizon Stock Recover To Its Pre-Inflation Shock Highs?
- Verizon Stock Has Over 60% Upside If It Recovers To Its Pre-Inflation Shock Highs
Ever since the U.S. government filed an antitrust lawsuit against AT&T to block the proposed T-Mobile deal, AT&T has been preparing to make concessions to address those concerns. The government’s primary concern was that the deal is potentially anti-competitive; if the merger goes through, AT&T and Verizon would control most of the wireless market. The government recently set a deadline of next February for the hearing, which should give AT&T time to get its ducks in a row.
See AT&T Trying to Sell T-Mobile Spectrum & Subscribers – But is it Enough?
Clearwire
Clearwire is looking to raise between $150 million and $300 million for the maintenance of its existing WiMAX network and $600 million to begin roll out of its LTE network. ((Clearwire Q2 2011 earnings conference call transcript, SeekingAlpha, August 4th, 2011)) The spectrum shortage is growing in the U.S., which is also the primary reason that AT&T is trying to buy T-Mobile. The excess spectrum that Clearwire possesses is an attractive asset for other wireless carriers, so a sale could be a win-win situation for both Clearwire and the purchaser.
Verizon
Just weeks ahead of the launch of the Apple (NASDAQ:AAPL) iPhone 5, Verizon has put “network optimization practices” into effect that will throttle the bandwidth of the top 5% of data users on its network. This means that Verizon will be slowing down connection speeds of these users when they are on a congested cell site.
Notes:- AT&T Approaches Rivals to Save T-Mobile Bid, Bloomberg, September 19th, 2011 [↩]
- Verizon Started Throttling Its Top 5% Data Hogs, Doesn’t Affect 4G LTE Or Tiered Data Customers, Droid Life, September 16th, 2011 [↩]