- The document analyzes T-Mobile US, Inc. as an investment opportunity and recommends selling the stock.
- Key points include T-Mobile's business overview as the 3rd largest US wireless carrier, its competitive strategies to attract customers from rivals, and financial analysis showing the stock is overvalued compared to the author's price target of $20.48 per share.
- The author cites concerns about T-Mobile's high debt levels, slowing revenue growth, and cyclical earnings patterns in recommending against establishing a position in the company.
AOL Time Warner Merger Case Study Strategic Analysis, performing a SWOT, discussing the Culture of both firm's using Henry Mintzberg's Model, and evaluating the strategy.
Author:
Guilherme Lopasso
Over-the-top (OTT) services are those delivered to the customers over the internet and not usually provided directly by the telecom operator. Services such as searching tools provided by Google or webmail provided by Microsoft Hotmail are examples of OTT.
OTT services became a concern to telecom operators when they started to compete directly with services traditionally offered by telcos: voice, messaging and pay TV. For example, Skype, which now belongs to Microsoft, was founded in 2003 and has currently achieved 250 million active users per month, who talk 100 minutes on average, avoiding the use of traditional telephony. As Skype became a telco competitor on voice, several new OTT service providers have entered as substitutes to traditional telecom services.
AOL Time Warner Merger Case Study Strategic Analysis, performing a SWOT, discussing the Culture of both firm's using Henry Mintzberg's Model, and evaluating the strategy.
Author:
Guilherme Lopasso
Over-the-top (OTT) services are those delivered to the customers over the internet and not usually provided directly by the telecom operator. Services such as searching tools provided by Google or webmail provided by Microsoft Hotmail are examples of OTT.
OTT services became a concern to telecom operators when they started to compete directly with services traditionally offered by telcos: voice, messaging and pay TV. For example, Skype, which now belongs to Microsoft, was founded in 2003 and has currently achieved 250 million active users per month, who talk 100 minutes on average, avoiding the use of traditional telephony. As Skype became a telco competitor on voice, several new OTT service providers have entered as substitutes to traditional telecom services.
Strategic Management Case
T-Mobile US
03/26/2017
Mba-599
Introduction
T-Mobile US, Inc. (NASDAQ: TMUS) is Based in Bellevue, Washington. T-Mobile US is the third largest provider of wireless voice, messaging and data communications services in the United States. T-Mobile US was named after T-Mobile Germany. T-Mobile US offers its services through its subsidiaries such as GoSmart Mobile. T-Mobile US operates two flagship brands, T-Mobile and MetroPCS. T-Mobile acquired MetroPCS in a reverse takeover in 2013. T-Mobile offers post-paid plans and MetroPCS offers pre-paid plans. Deutsche Telekom is the majority shareholder of T-Mobile US, owning 65% of the company. Deutsche Telekom is a German based company. T-Mobile US sells mobile phones, tablets, and wireless internet. T-Mobile US offers unlimited wireless voice, messaging, and data communications. T-Mobile also offers WIFI calling when overseas or if network is out of reach. This technology allows customers to turn a WIFI connection to their own towers. The company offers its services through its advanced 4G LTE network to 71.5 million customers as of 2016. T-Mobile is capable of reaching 308 million in their homes and workplace. The company also offers global plans. T-Mobile US customers can use their services in Canada and Mexico at no extra charge. Customers can also use their phones in Europe using Deutsche Telekom’s network. Customers can also use their cellular devices in Puerto Rico and the U.S Virgin Islands. T-mobile has about 55 million post-paid customers which make up about 77% of its customers. MetroPCS has about 16 million pre-paid customers. T-Mobile also sells service wholesale, including to Google's Project Fi- program, adding another 373,000 customers in the quarter. Between T-Mobile and MetroPCS, T-Mobile US operates about 8000 stores. Most of the stores are authorized vendors and the rest are company owned. According to Fortune.com, Approximately 230 million people live within 10 miles of T-Mobile's (tmus, +1.66%) roughly 3,600 current stores. The company reaches 98% of Americans. T-Mobile US has about 50000 employees. The CEO of the company is John Ledger. He is known to be an outspoken leader and does not fit the mold of a typical CEO. According to CNNMoney.com, Consumer Reports named T-Mobile the number one American wireless carrier and in 2017, T-Mobile was ranked number one in Customer Service Satisfaction by Nielsen.
T-Mobile US started as VoiceStream Wireless PCS which was a subsidiary of Western Wireless Corporation. VoiceStream Wireless was purchased by Deutsche Telekom in 2001 for $35 billion and renamed T-Mobile USA, Inc. Deutsche Telekom completed the acquisition of VoiceStream Wireless Inc. for $35 billion and Southern US regional GSM network operator Powertel, Inc for $24 billion. In 2013, T-Mobile US, Inc. was formed through the business combination between T-Mobile USA and MetroPCS Communications, Inc. The business combination was accounted for a.
Socially mobile draft overview powerpoint 102114Julio Macias
Looking for network marketing leaders interested in FREE mobile service willing to show people how to achieve the same goal. FREE MOBILE SERVICE!!
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1COMPARISON OF AT&T & VERIZONRunning head COMPARISON OF .docxhyacinthshackley2629
1
COMPARISON OF AT&T & VERIZON
Running head: COMPARISON OF AT&T & VERIZON 3
Times Corporate Comparison of AT&T Verizon
Financial Management 360
April 17, 2014Corporate Comparison of AT&T and Verizon
As cellular phones became more common and as technology emerged that combined the ability to send data as well as voice via this infrastructure, telephone companies expanded their product offerings to include content as well as infrastructure. Today, telecommunication giants such as AT&T and Verizon have a global reach in Internet, cellular communications and other technologies, but they are increasingly operating in mature markets that should be characterized by declining profit margins and slower revenue growth. This research considers financial performance for both of these companies over the past three years as well as evaluating both companies in terms of investing attractiveness and their effectiveness in operating in a mature market.About AT&T
AT&T is a holding company that offers telecommunication products and services throughout the world. These include wireless communications, local landline service (exchanges), long distance service, Internet/broadband service, equipment, video service and wholesale services. The company is organized into three business segments: wireless, wire line and other. The wireless subsidiaries provide service in the United States as well as in a significant number of other countries. The wire line business segment includes the company's U-verse television and high-speed broadband service as well as its landline offerings. Other includes operator services as well as miscellaneous corporate services. At the end of 2012, AT&T had more than 107 million wireless subscribers using contract as well as prepaid service options. More than half of the company's revenues come from its wireless operations(Reuters, 2013). In September 2013, AT&T purchased unused spectrum from Verizon, one of its main competitors (Musil, 2013).About Verizon
Like AT&T, Verizon is a holding company that operates through subsidiaries. It also operates both wireless and wire line business segments, but does not provide operator services. Verizon provides wireless devices, wireless infrastructure, broadband services, Internet services, and other services to both consumer and business customers. The company has operations in more than 150 countries around the world. The company has formed strategic partnerships with a number of different companies, including General Motors. It operates the technology infrastructure for OnStar provided on cars from General Motors. Verizon has one of the largest 4G LTE networks as well as a large fiber optic network (Reuters, 2013).AT&T Financial Data
Following is key financial data for AT&T for 2010-2012. The company has seen a decline in equity as its liabilities have increased significantly during that time. There was a year-to-year increase of 5 percent in the company's liabilities from.
Wireless providers will need to adjust their strategies to accelerate innovation, cement customer relationships and improve operational efficiency to maintain revenue and profit growth.
See John Legere, CEO TMUS, N. Ray CTO TMUS, M. Sievert, COO TMUS & Braxton Carter, T-Mobile US CFO for a review and outlook of the US business. To download the presentation including the disclaimer in pdf format and to find further material please visit http://www.telekom.com/cmd15
Business of Value Added Services in New Mobile Era: From Strategy and Busines...Ali Saghaeian
Please email me "saghaeian [at] gmail.com" for any request on VAS research, consulting and training.
This presentation includes topics such as:
The mobile 3.0 – The trends for Multimedia Services and Value Added Services
The 4th revenue curve of mobile communication – The business of Value Added Services.
Differences in doing business with Multimedia and Value Added Services than voice, messaging and access (data) services.
Mobile Operator Strategy and implications for the ecosystem
The Impact of 4th curve on mobile operator’s financials
Investing in the 4th Curve
How can Operators become Digital Lifestyle Solution Providers (DLSP)?
Play book 100-ways-to-boost-your-business-finalSean Broderick
At Openet we are obsessed with solving problems for our customers. In 2016 these problems come down to a number of key areas, how do I get my customers to use more data and boost their spend, how can I reduce churn and improve LTV, how can I grow my subscriber base, leverage fixed line assets and Wi-Fi, launch sponsored services?
To provide the answers to these questions and more we have created a Propositions Playbook with 100 use cases that will help boost an operator's business.
Running Head AT&T AND TIME WARNER 1AT&T AND TIME WARNER.docxtoddr4
Running Head: AT&T AND TIME WARNER 1
AT&T AND TIME WARNER 2
AT&T and Time Warner
Institution
Name
Course Title
Date
5 Porter’s Forces on AT&T and Time Warner
Porter’s Forces are the most essential framework which is being applied in most industry analysis since its introduction in the 1970s. They are embraced most because of their ability to measure the capability of a business’ competitive attractiveness with regard to its market industry. Most of the creditors as well as investors make use of the conclusion that are drawn from the Porter’s 5 Forces in determining the business’s risk as per the current market competition. In this paper, Porter’s 5 Forces analysis of the Company in relation to its market competition will be discussed.
Competitive Rivalry
From the history of telecommunications in the United States, there are 10 main competitors of the firm. Although there are other companies approaching 70 in the telecommunications industry in the United States, these 10 are the one offering a direct competition to AT&T and Time Warner according to…?. These direct competitors include T Mobile, COX, Sprint, Google, Apple, EarthLink, NETFLIX, ADT, Vodafone, and DISH. Together, they have raised over $5.6 billion between there estimated 480,700 employees (Pouryeganeh, 2015).In terms of employees, AT&T and Time Warner have got 268,000 employees as per the 2018 analysis and it’s ranked at the top of all the competitors with the top 10 average number of employees being 68,531.
Considering the revenues of the company and its competitors, the following analysis table can be generated. How have the companies competing in this industry changed over the past decade or two, how have their market shares changed and how have those changes impacted sales and profitability in those industries….
Company Name
Average Annual Revenue
AT&T and Time Warner
$177.5 billion
T Mobile
$43.3 billion
COX
$39.0 billion
Sprint
$33.2 billion
Google
$110 billon
Apple
90,2 billion
EarthLink
$0.206 billion
NETFLIX
$4.19 billion
ADT
$1.185 billion
Vodafone
$46.5 billion
DISH
$13.94 billion
From the above financial information of the following regression graphical analysis can be done concerning the market competition in terms of revenue of AT&T and Time Warner.
It’s clear from the above statistical analysis that, the top most competitors for the company are Google and Apple telecommunication companies, please explain how you reached this conclusion…, with EarthLink being the least competitors among the ten considered companies. Google as well as Apple companies have been presented as the major competitors due to their time to time innovations on issues to do with internet services connectivity as well as their relative competitive costs as far as their services are a concern. Although other close competitors who are becoming popular in the market of telecommunications like Vodafone as well as T Mobile without forgetting COX and Sprint companies s.
Nibc 2016 mba-m fin - true north investments - pptJohn McGlynn
Our Team was selected as one of 25 teams from the 350 applicants to advance to the final round!
Created a Pitch-Book for a hypothetical presentation to AT&T, outlining our current valuation of the firm under multiple valuation techniques, and describing how my team's recommended corporate action fits AT&T's current strategy and increases shareholder value.
This pitch included a detailed valuation of AT&T using a Discounted cash flow approach, Comparable Firms approach, and a Precedent Transactions approach.
Our Corporate Action recommendations were tailored to AT&Ts current strategy. For acquisition recommendations a accretion/ dilution analysis was provided.
The ultimate guide to AT&T cell phone network and how to lower billsAnubhai Sura
Tired of paying huge cell phone bills, cable bills, internet bills, electricity bills, insurance bills more than your monthly subscription. Your search ends here. All we need is your bills and we will do the rest part. Till now, 300,000+ customers save $1+ million every month with us. Are You Next?
The ultimate guide to AT&T cell phone network and how to lower bills
T-MobileValuation
1. Andrew McGee
April 14, 2015
Action:
Sell/Hold
T-Mobile (NYSE: TMUS)
Sector: Telecommunications
Industry: Telecommunications Services
C-NYSE(4/13/15) Open: $31.19
Company Description:
T-Mobile U.S. is a subsidiary of the German
company Deutsch Telekom. The headquarters
of T-Mobile U.S. are located in Bellevue,
Washington. This company is a provider of
wireless voice, messaging and data service
through the United States. It also provides
service in Puerto Rico and the U.S. Virgin
Islands. T- Mobile has over 55 million
customers and approximately $29.56 in annual
revenue. This makes T – Mobile the third
largest wireless network in the United States.
Its products reach 96% of Americans and has
been ranked highest for retail store satisfaction
for customers the past four years. It also has
been ranked highest for wireless customer care
the past two years. T – Mobile was originally
VoiceStream Wireless PS. VoiceStream was established in 1994 as a subsidiary of Western
Wireless Corporation. In 1999, VoiceStream was spun off from Western Wireless and went
public. In 2001, the German telecommunications company Deutsch Telekom purchased
VoiceStream for $35 billion. In 2002, VoiceStream was renamed T – Mobile. In 2011, AT&T
attempted to purchase T – Mobile for $39 billion in stock and cash. The U.S. government
resisted this merger heavily and after realizing the tough legal situation of the merger, the deal
52 WeekRange: 24.26 – 35.50
SharesOutstanding: 807.8m
Floating: 268.0m
Avg.10 day Vol. 2,358,320
Market Capitalization: 25.67 billion
Dividend/Div.Yield: N/A
BookValue: 19.40
ROE: 1.7%
LT Debt: 24.4m
BETA: 1.248
Price Target: 20.48
2. fell through. In 2012, T – Mobile merged with MetroPCS, which was the 6th largest carrier in the
United States. This deal increased T – Mobile competitiveness with its competitors. After the
merger, the company was renamed T – Mobile US, Inc. In 2013, Sprint began to make a push to
take a majority share holder stake in T – Mobile of about $20 billion. This move would be
beneficial to T – Mobile because it would drastically increase its market share. Sprint eventually
withdrew from the attempted merger for fear that the government would not approve it. There
was a lot of anti-trust concern involving this merger.
Products:
T – Mobile has multiple phone plans and services they provide. T – Mobile focuses on trying to
get customer away from the major providers like Verizon and AT&T. In an attempt to do this T –
Mobile does a lot of lower prices and deals to help get people out of their long term contracts
with other providers. Some examples are:
Uncarrier
This deal does not require a contract, drops overage fees for data usage and covers any early
termination fees.
Simple Choice
This deal offers unlimited calling and text messagine with 500 mb of data usage for $50 a
month.
Early Termination Fees
T – Mobile is willing to pay off a customer’s early termination fees up to $375 per line when the
customer turns in a current device.
Test Runs:
T – Mobile also tries to get new customers by providing free test runs. In June, 2014 T – Mobile
was offering customers a free IPhone 5s to test out T – Mobile’s network for one week. The
offer was limited to one per house hold per year. Apple even provided T – Mobile with free
IPhones for this promotion.
Gogo Inflight Wifi:
Enables customers to send text messages and visual voicemails on Gogo equipped U.S. flights.
Data Stash:
T – Mobile customers have the ability to roll over unused high speed data for up to a year.
3. Competitive Analysis:
T-Mobile is considered one of the four major wireless providers in the United States. Its major
competitors are Verizon, AT&T and Sprint. T-Mobile is trying to gain market share against these
major competitors by offering low prices for their services, paying off termination fees and high
demand products. T-Mobile recently started offering high demand products such as the Iphone
6 & 6+ ad the Samsung Galaxy, along with other high demand smart phones. This will cause
people to consider T-Mobile when they are choosing a provider or switching providers. T-
Mobile likes to try to take customers away from the other three major providers. AT&T is one
customer base it targets specifically because about 20% of AT&T customers do not have
contracts.
Revenue Growth:
For the past 6 years, T-Mobile has demonstrated consistent growth in its revenue. From 2008
through 2011, it had consistent revenue growth of approximately 20%. In 2012, the growth
slowed to about 5%. This may have been cause by the merger with MetroPCS and finalizing the
transition. After the merger with MetroPCS, the revenue jumped up a large amount. In 2012,
the revenue was $5,000. In 2013, after the merger the revenue was $24,000. This is clearly
more because of the merger instead of a massive increase in sales. However, in 2014 there was
still consistent growth of 21%. Analysts are anticipating growth to slow down in the next couple
of years though. In 2015 growth is expected to slow to 9% and in 6% in 2016.
In Millions of USD except Per
Share FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
12 Months Ending
2008-12-
31
2009-12-
31
2010-12-
31
2011-12-
31
2012-12-
31
2013-12-
31
2014-12-
31
Revenue 2,751.5 3,480.5 4,069.4 4,847.4 5,101.3 24,420.0 29,564.0
Growth (YOY) 26.5% 16.9% 19.1% 5.2% 378.7% 21.1%
4. Earnings:
Ann Date Per Per End C Reported Comp Estimate
02/19/2015 Q4 14 12/14 0.198 0.12 0.073
10/27/2014 Q3 14 09/14 -0.051 -0.12 0.035
07/31/2014 Q2 14 06/14 0.498 0.48 0.093
05/01/2014 Q1 14 03/14 -0.18 -0.18 -0.105
In the past four quarters, T-Mobile has had some interesting earnings. In the first quarter of
2014, analysts expected a loss of earnings but T-Mobile lost more than anticipated. Then in
quarter 2, T-Mobile’s earnings out performed analysts’ expectations by more than 5 times.
Following this strong earning quarter, analysts were anticipating small earnings in quarter 3 but
T-Mobile ended up having negative earnings. Finally, in quarter 4 the earnings outperformed
expectations by more than double. It appears as if T-Mobile has a cyclical earnings pattern.
Following a quarter with a negatives earning, the company posts a strong earning period which
is then followed by a negative earning period in the next quarter. Analysts anticipate the first
quarter of 2015 to have negative earnings which would follow this cycle. However, I have not
found any reason or explanation as to why their earnings have this cyclical approach.
Valuation:
EquityValue 16,547.71
SharesOutstanding 807.8
Value perShare 20.48
Cost of Equity
Beta 1.248
Rm 11.7%
Rf 3.8%
Ke 13.7%
Gn 4.0%
5. Based on the discounted cash flow method for valuation, I have concluded that T-Mobile US,
Inc. is over valued trading at $31.77. Based on my valuation, I believe that the stock should be
trading at approximately $20.48. Based on how the revenue growth is anticipated to slow
within the next couple of years, I do not see establishing a position in this company being
profitable. I believe that the stock price has been inflated in the past couple of years because of
excitement from the merger with MetroPCS and an anticipated growth in market shares based
on new products and marketing approaches.
T-Mobile has a lot of debt on its books as well. Its total liabilities in 2014 were approximately
$41 billion. Its long term debt in 2014 was $24 billion. The revenue in 2014 was $29 billion.
Therefore, although T-Mobile is producing a higher revenue than its long term debt, the
amount of debt is still too high for me to see a strong growth in their stock price.
In the past 7 years, TMUS has had an extremely volatile pattern. It has had multiple major fall
offs, one in 2009 and one in 2011. Since 2013, the stock has settled around the $25 - $30 range.
Based on the slowing of growth and massive amounts of debt, I cannot foresee a major growth
in the stock price.
Action: Sell
6. Based on my valuation, I would not recommend establishing a position in T-Mobile US, Inc. Due
to the large amounts of debt, high chance of default and slowing revenue growth I do not see a
position in T-Mobile being profitable. Although T-Mobile is considered one of the four major
wireless providers in the United States, this company still has a lot of growth potential.
However, the risk involved in taking a position in this company does not have an equivalent
potential return. Therefore, my recommendation is to avoid a position in T-Mobile.