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Monday 22 August 2016

AT&T And Verizon Communications Plan to Get Back to the Top with Three Things


AT&T and Verizon Communications are soon likely to join hands to extend their reach to new consumers for new growth. This seems to be a tough call taken by the two free government cell phones service providers. Most of the business analysts in the global telecom industry are biting their nails to see if this alliance can survive the fierce market competition from T-mobile US or not.

Both of the telecom giants focused on investing on their network and additional spectrum. This allowed AT&T and Verizon Communications to generate a huge amount of profit in operating cash flow to secure enough funds to pay a generous dividend and reduce debt to ensure free government cellphone service. Verizon Communications had invested $7.7 billion and generated the amount of $12.8 billion whereas AT&T capital expenditure of $10.6 billion ensured the recovery of $18.2 billion in operating cash.

This is certainly helping both of the free cellular phone service providers survive fierce market competition from T-Mobile. A number of other factors mentioned below are also equally responsible:

•    Wise investments
•    Efforts to seek regulatory approval for Acquiring XO Communications
•    Digesting

Let’s see how these factors bring the both of the free cellular service providers close for extending their reach to new customers for new growth.

1.    Wise investments:
AT&T has recently taken over DirectTV as a parent company whereas Verizon Communications has acquired Yahoo INC and Fleetmatics. Now both of the companies are working out a plan to roll out 5G wireless network across the nation in 2017. The alliance of these two free cellular service providers and their financial investments for acquiring companies like Yahoo INC, Fleetmatics, and DirectTV is a strategic move to increase their capital expenditures so as not to lag behind in the race for the best coverage and quality of network.

2.    Efforts to seek regulatory approval for Acquiring Xo Communications:
Verizon Communications has been trying to seek regulatory approval for acquiring XO Communications at the cost of $1.8 billion for 20000 fiber optic miles in 40 major markets connecting almost 85 cities in the United States. This has certainly forced all of the rivals to do some serious thinking. The company is planning to complete the entire acquisition process of XO Communications before 30th June 2017 whereas Fleetmatics will be acquired fully by the end of 2016. As for the Yahoo acquisition, the whole process should be a cakewalk for Verizon Communications.

On the other hand, AT&T plans to complete the entire acquisition process of DirectTV at the earliest for securing cross selling opportunities.

Check your Lifetime Qualification for Free Government Cell Phone Plans

3.    Digesting:Both AT&T and Verizon Communications have always been strong on strategic front. Their efforts to complete their entire acquisition plans well within the time reflects exactly that. It is very easy for both of the free cellular service providers to complete the accusation process without any financial hiccups. Most importantly, future earnings of these two free government cellphone service provider will not get affected at any cost to stay on top of the market through constant innovations.

Now it is just a matter of time when AT&T and Verizon Communications get back at the top of the telecom market to consolidate their position. 

Wednesday 17 August 2016

Analysis of Yahoo INC., AOL and Fleetmatics's Acquisition by Verizon Communications - Its Business Growth in the Wireless Service Sector


The period from 2006 to 2015 can easily be called a golden period in the history of Verizon Communications. The company witnessed the compounded growth of at least 4% on a yearly basis in its revenue on the New York Stock Exchange. This golden period for Verizon has contributed to sales of almost $88 billion in the government assisted cellphone sector. 

Verizon’s wireless service subscribers increased at a rate of 9% every year from 2006 to 2015. In simple words, the company’s consumer pool grew from 59.1 million subscribers in 2006 to almost 140 million subscribers in 2015. Coming to the revenue, it grew at a pace of 9.2% every year.

To be honest, it is not so easy to continue consistent growth in the wireless business sector. There are not many subscribers available in the market for the company to switch subscribers from their current government assisted cellphone service providers to Verizon’s free cellphone plans.

This is perhaps why the company is facing a snail’s pace growth going forward in the wireless sector. And this just seems to be the icing on the cake. There could more serious reasons responsible for leading the company towards potential financial disaster in the times to come. Let’s now go through those reasons and analyze Verizon’s financial future in the government assisted cellphone sector.

The company lacked patience for seeking new growth in wireless advertising and IoT (Internet of Things) considerably. Rapid acquisitions by Verizon Communications cannot be ignored. How? See below:

  • AOL’s acquisition at a cost of $4.4 billion in the month July 2015.
  • The company took no time in buying a privately held company named Telesis at the start of 2016.
  • Recently the company has paid almost $2.4 billion for taking over Fleetmatics.
  • The biggest announcement came when Verizon Communication announced the acquisition of Yahoo INC, one of the largest e-mail service provider in the world, at a cost of $4.8 billion.
  • Increasing market impact of new business has also played an important role.
 Most experts, including the entire management of Verizon Communications, are very positive about finding new business growth, especially in the domain of government assisted cellphone and free cellphone plans including the Internet of Things.  


Verizon communication’s acquisition of AOL and Yahoo INC indicates that free cellphone plans had been setup for ripping through the internet and all forms of media in future. The combined acquisition of Yahoo INC and AOL is a golden opportunity for new growth in the wireless sector via more than 600 million mobile users and almost 280 million e-mail users.

Most importantly, Verizon’s revenue will increase to help the company increase its market share up to 10%. In this way, the company will only be behind Facebook with 30% and Google with 16% market share.  These Acquisitions must help Verizon’s advertisement business on wireless devices through free cellphone plans without much problems.

Monday 8 August 2016

T-Mobile Recorded 890K Postpaid Subscriber Additions in Recent Quarter


T-Mobile lead other carriers by adding a considerable number of post-paid customers in the latest quarter.

The post-paid customer additions did not reach the standards set in last year’s quarter, but the customer increase is way ahead of the combined number of AT&T, Sprint and Verizon additions. Not only this, there is a remarkable growth in prepaid customers as well. The company’s post-paid phone additions correlates with Wall Street estimates and the total revenue as well as service escalated annually.

Jennifer Fritzsche, analyst at Wells Fargo said the numbers are “solid” and stressed over the significance of free cash flow in near future for the company. T-Mobile is also a provider of government cell phone service or government assisted cell phone plans.

Fritzsche commented "While gross adds for the industry were slow overall (and growth driven more by lower churn), TMUS lead the industry by a wide margin in handset adds,"  "The Free Cash flow metric is becoming increasingly meaningful for TMUS and (depending on the auction spending) is a metric which should see a significant ramp in 2017. Free cash flow expectations for the remainder of 2016 should largely depend on the amount of working capital outflows from handset purchases and its spend in the upcoming broadcast auction." 


The company gained 890,000 net post-paid customers, including 646,000 post-paid phone adds in the second quarter. T-Mobile's latest quarter revenues surged 12 percent year over year to $6.9 billion and the total revenues mounted 13 percent year-over-year to $9.2 billion.

As a result of another successful quarter due to continued strong customer growth and improved revenues, the company’s shares rose slightly. The carrier also provides services for the Lifeline program which is known as government cell phone service.

Moffett said "For the record, we've never thought T-Mobile would be acquired. But more importantly, we've never though that one need to think it would be in order to want to own the stock," "T-Mobile's remarkable growth rate -- service revenues were up 12.1 percent from a year in today's report in a market that is down year-over-year -- and free cash flow trajectory make the case without one having to believe it will be acquired."

Wednesday 3 August 2016

Sprint Beats Expectations by Adding a Significant Bulk of Subscribers


The fourth largest telecom giant in the nation rose above expectations with a net gain of 173,000 postpaid subscribers in the second quarter of the year, which also includes several government cell phone plans. With the aid of heavy discounts and free cell phone services, the company managed to attract more subscribers for any first quarter in the past nine years. In contrast to a pervious net loss of 12,000 customers last year at this time, the company seems to be on cloud nine with the significant addition this quarter which ended June 30.

The company also faced a lower postpaid phone churn of 1.39 percent in the second quarter which is an improved churn over the last five quarters. Another achievement was that it’s postpaid base is net positive against the other three rivals. For the first time in the more than 5 years it has gained more subscribers from each of the rivals than it lost.

Though the company reported a considerable number of customer gains with certain plans including government cell phone plans, these came at a good cost. The loss figures soared to $302M, which is much larger than its $20M loss last year for the same period. Not only this, the wireless revenue topped at $6.1 billion rather than expected $6.2 billion expected by those at Wells Fargo Securities.

CEO Marcelo Claure shared "We had another quarter of solid progress in our turnaround, with the highest first-quarter postpaid phone net additions in nine years, the lowest postpaid phone churn in company history, and finally being postpaid net port positive against all three national carriers after five years," "We also grew wireless net operating revenue year-over-year while aggressively reducing the cash operating expenses of the business and our network is performing better than ever."

The contract termination charges totaled $113M, mostly related to a deal with Ntelos. The net operating revenue dropped to $8.01 billion, against $7.98 billion predicted by the analysts at Thomson Reuters. 


With a close at $4.62, the telecom company’s shares rose 27.6% since the beginning of the year.

Though the company has won postpaid customers in the country, but the analysts show doubt about how it is going to improve its network without increasing the capital expenditure.