SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

   Technology StocksSprint Nextel Corporation (S)


Previous 10 Next 10 
To: kech who wrote (1667)7/1/2004 11:54:32 PM
From: Jon Koplik
   of 1691
 
WSJ -- SEC Dials 411 on Telecom Math.

July 1, 2004

SEC Dials 411 on Telecom Math

Agency Asks Many Companies How They Count Subscribers To Check for Signs of Inflation

By RANDALL SMITH, SHAWN YOUNG and JESSE DRUCKER
Staff Reporters of THE WALL STREET JOURNAL

The Securities and Exchange Commission has asked more than 20 telecommunications companies for information about how they count their subscribers. The request is an apparent effort to determine whether any have changed their practices or taken other steps to bolster the appearance of growth.

Those receiving the requests include AT&T Corp., BellSouth Corp., Verizon Communications Inc. and Cingular Wireless, a joint venture of SBC Communications Inc. and BellSouth, officials at the companies said.

One such letter, dated June 17, asks AT&T to "explain in detail the methodologies that the company currently uses to calculate numbers of customers and/or subscribers, and access lines, for the purpose of releasing such information publicly." The information sought includes how the company insures that customers who cancel service are removed from the totals.

An AT&T spokesman said, "It's a routine request for information and we always cooperate with the SEC." A spokesman for Verizon, the nation's largest telephone company by revenue, said the company intends to respond. BellSouth and Cingular declined to elaborate beyond confirming receipt of the letter. A spokesman for the SEC declined to comment.

The SEC letter to AT&T also asks whether the long-distance company has changed the methodology or applied it consistently over the past three years, and to explain any changes and whether they have been disclosed publicly. The letter, which says the SEC staff is "conducting an informal investigation" into the subject at "certain telecom companies," asks for the data to be provided voluntarily by July 19, 2004.

The enforcement-division request is part of the SEC's new "wildcatting" program of trying to find possible scams and abuses without necessarily having hard evidence of misconduct, according to a person familiar with the request. Indeed, the SEC letter to AT&T noted: "This request should not be construed as an indication by the commission or its staff that any violations of law have occurred, nor should it be considered an adverse reflection upon any person, entity or security."

The wildcatting program was created after New York Attorney General Eliot Spitzer exposed a number of abusive anti-investor practices in the securities markets, upstaging the SEC. The Spitzer inquiries found research that was biased to win investment-banking fees and improper mutual-fund trading in which fast-trading professionals took advantage of individual, long-term investors.

One example of the kind of inflated customer counts the SEC is checking for at the telecom companies was contained in a set of fraud charges filed in July 2002 against Adelphia Communications Corp. and six of the cable-TV company's former officials, according to one person familiar with the telecom probe.

In the Adelphia charges, which remain pending, the SEC accused the company of misstating the number of its basic-cable subscribers, which the agency described as one of the factors that are "crucial to the metrics used by Wall Street to evaluate cable companies." A spokesman for Adelphia, based in Greenwood Village, Colo., said the company has "been in discussions" with the agency "to work on some kind of outcome."

For example, the SEC said Adelphia in 2000 and 2001 added 15,000 subscribers of an affiliate in Brazil that hadn't previously been counted in Adelphia's reported financial results, and 28,000 customers in a similar venture in Venezuela. In 2001, the SEC said, Adelphia added 39,000 subscribers of its "Powerlink" Internet services to its cable-subscriber count. Also in 2001, Adelphia counted 60,000 customers of its home-security service as cable subscribers.

In all, the SEC said, Adelphia used such tactics to overstate its number of reported basic-cable subscribers -- which it said totaled 5.8 million at the end of 2001 -- by 142,000, which the SEC said were "improperly included in [the] number of reported basic subscribers."

Wall Street analysts say subscriber-number changes can have a big impact on stock price. Quarterly net customer additions are considered particularly important in the U.S. wireless industry, where carriers are typically ranked based on the size of their customer base, rather than on annual revenue.

Last October, for example, AT&T Wireless Services Inc. announced third-quarter results that included strong performances in several key areas. However, it reported disappointing net subscriber additions and the company's shares fell 10.8% in heavy trading.

A year earlier, Sprint PCS, the wireless division of Sprint Corp., said it expected to report its first-ever quarterly net loss of customers, largely because it disconnected hundreds of thousands of subscribers who weren't paying their bills. Sprint PCS stock fell as much as 16% on the news before closing down 5.8%.

Yet defining a subscriber is up to each company. "The definition of what counts as a subscriber isn't very scientific," says Jonathan Atkin, a telecom analyst for RBC Capital Markets. "Is a subscriber who hasn't paid for 60 or 90 days still considered a subscriber? Every company has a different definition."

Wall Street typically has a good idea in advance of quarterly subscriber announcements, since companies often provide subscriber-growth guidance during the quarter and typically preannounce any major changes. Indeed, Verizon Wireless -- the country's biggest cellular operator, which is a joint venture of Verizon Communications and Vodafone Group PLC -- earlier last month disclosed that it had already added more than one million net subscribers during the first two months of the second quarter.

Investors in traditional wire-line phone companies such as Verizon and AT&T haven't watched customer counts as closely as investors in newer areas like wireless and cable. That is partly because the traditional companies have typically reported profits, while newer segments like cable and wireless emerged with little besides revenue growth and a growing customer base for investors to measure.

"When those companies went public, that was all they had," said John Hodulik, an analyst at UBS, "and so that's what investors looked at."

Write to Randall Smith at randall.smith@wsj.com, Shawn Young at shawn.young@wsj.com and Jesse Drucker at jesse.drucker@wsj.com

Copyright © 2004 Dow Jones & Company, Inc. All Rights Reserved.

Share RecommendKeepReplyMark as Last Read


From: Keith Feral12/10/2004 1:54:10 PM
   of 1691
 
Anyone remotely interested in the Sprint Nextel merger? Any thoughts on the break up value of Sprint FON if Nextel buys the wireless and sells the wireline biz?

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


To: Keith Feral who wrote (1669)12/10/2004 10:55:37 PM
From: techlvr
   of 1691
 
My understanding is that FON is the buyer. I think that once done, a wireless only effort would be huge. The fixed line business is doomed to impossible overhead compared to wireless. If FON/NXTL could divest itself of the wireline business, pay down debt with the proceed, and continue on forward, it might mark a new era in telecommunications. The other combined players would be at a distinct disadvantage.

Your thoughts?

Techlvr

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


To: techlvr who wrote (1670)12/13/2004 10:16:09 AM
From: Keith Feral
   of 1691
 
I agree with you 100%. Now that the ratio is out of the bag, it doesn't matter which side - FON or NXTL. They will be one and the same. When you look at the MMDS synergy between the two companies, you not only get cellular and PCS CDMA potential for mobility, but you also get a whole new band of wireless for mobility and fixed wireless capabilities.

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


To: Keith Feral who wrote (1671)12/13/2004 10:18:15 AM
From: techlvr
   of 1691
 
And Sprint picks up the rights to the QChat tech that NXTL has sat on for the past few years.

I like it.

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


To: techlvr who wrote (1672)12/13/2004 10:23:12 AM
From: Keith Feral
   of 1691
 
There are two types of people I know with cell phones - NXTL and PCS. Yeah, I know a handful with VZ corporate accounts, but you have to be willing to pay through the nose to do business with VZ. The Cingular people are so stupid they don't deserve a cell phone in the first place. Eventually, they end up getting sucked into T Mobile for another round of terrible service. In the end, everyone ends up coming back to their Daddy - PCS. Anyone that starts with NXTL seems to stay because of the Direct Connect feature. It was my impression that PCS has long desried to make all of their handsets PTT compliant.

Share RecommendKeepReplyMark as Last Read


From: Keith Feral2/29/2008 8:07:43 AM
   of 1691
 
sprintspecialoffers.com

$99 plan cover family plans too. $15 extra for 3 lines. That's unlimited for everyone is the family for $114 a month.

Not too shabby. It's great to finally get access to gps and mobile tv!

Share RecommendKeepReplyMark as Last Read


From: hedgefund5/4/2008 7:22:03 PM
   of 1691
 
Wake up: Sprint may be bought....HF

online.wsj.com

Deutsche Telekom Considers Bid for Sprint
Purchase Would Aid
Effort to Move Beyond
A Tough Home Market
By MIKE ESTERL in Frankfurt and DANA CIMILLUCA and in London
May 5, 2008

Deutsche Telekom AG is weighing a bid to acquire Sprint Nextel Corp. that could catapult the German telecommunications giant's wireless arm, T-Mobile USA, to the No. 1 position in the U.S., according to people familiar with the matter.

Deutsche Telekom's deliberations are at a preliminary stage and management may very well turn away, these people cautioned. If a bid is launched for Sprint Nextel, which has a stock-market capitalization of $22 billion and is the No. 3 player in the U.S. wireless market, it could still be weeks, or even months, away, they added.

The potential bid is being considered as the former German monopoly scouts for acquisitions in countries outside the German market, where it has seen its revenue shrink in recent years amid rising competition and falling prices. Last year, it booked just over 50% of its revenue outside Germany for the first time.

T-Mobile is a distant No. 4 in the U.S. wireless market, with 28.7 million customers at the end of December. It invested heavily last year to acquire new wireless spectrum and is eager to expand. By acquiring Sprint Nextel, it could roughly triple its client base in the U.S. and surpass leaders AT&T Inc. and Verizon Wireless, a joint venture of Verizon Communications Inc. and Vodafone Group PLC.

Bonn-based Deutsche Telekom increasingly is focusing on its international wireless businesses as its domestic fixed-line services slump. Its wireless businesses generated more than half of the company's €62.5 billion ($96.3 billion) in revenue and €19.3 billion in operating profit last year.

The U.S. has been the biggest growth engine. T-Mobile USA added 3.6 million customers last year, boosting its revenue to $19.3 billion from $17.1 billion in 2006. In February, Deutsche Telekom completed its $1.6 billion acquisition of U.S. carrier SunCom Wireless Holdings Inc., which had 1.1 million customers.

The German company has a stock-market capitalization of $79 billion and money to spend after whittling down its debts in recent years.

Deutsche Telekom has looked more closely at Sprint Nextel since the U.S. company's share price has fallen below $10, far below its 52-week high of $23.42. The German company also may opt to strike while the euro is near record highs against the dollar, according to people familiar with the matter.

Still, there are many arguments against Deutsche Telekom making such a move, these people add, with one of them describing it as "a long shot." One major complication is that T-Mobile USA uses different wireless technology than Sprint Nextel, which would complicate the integration of their networks and increase costs. It is also unclear if U.S. regulators would permit a tie-up of the No. 3 and No. 4 carriers.

Adding Sprint Nextel to its roster also would saddle Deutsche Telekom's management with another big restructuring task in addition to its German operations.

Sprint Nextel has been struggling to retain customers, and its revenue slipped to $40.1 billion last year from $41 billion in 2006. The U.S. carrier booked a net loss of $29.5 billion in the fourth quarter, triggered by a noncash goodwill impairment charge of $29.7 billion.

Deutsche Telekom's management also is busy with a deal that would give it roughly a 25% stake in Hellenic Telecommunications Organization SA, or OTE, Greece's dominant telecommunications company. It agreed in principle in March to buy an initial 20% stake for €2.5 billion, but negotiations with the Greek government over management powers have been difficult.

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


To: hedgefund who wrote (1675)11/8/2009 11:54:06 AM
From: Keith Feral
   of 1691
 
I wonder if a combination of T mobile and Sprint makes more sense if Apple comes out with a GSM/UMTS & EVDO phone next year.

appleinsider.com

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


To: Keith Feral who wrote (1676)11/11/2009 8:15:36 AM
From: hedgefund
   of 1691
 
Interesting possibility; might be helpful if prior to any merger, Metro PCS and LEAP worked out a deal to create a more powerful no. 4 player, allowing present numbers 3 and 4 to combine. But, would T Mobile want to inherit the mess that I think WiMax will be? HF

Share RecommendKeepReplyMark as Last Read
Previous 10 Next 10