Verizon (VZ), AT&T (T) Fight Back Against FCC Roaming Decision

Verizon (NYSE:VZ) and AT&T (NYSE:T) are fighting back against the decision by the FCC to adopt automatic data roaming rules, which allow competitors unwilling to invest in wireless infrastructure to use theirs.

Tom Tauke, Verizon Communications' executive vice president of public affairs, policy and communications, said in a statement, "By forcing carriers that have invested in wireless infrastructure to make those networks available to competitors that avoid this investment, at a price ultimately determined by the FCC, today's order discourages network investment in less profitable areas. That is directly contrary to the interests of rural America and the development of facilities-based competition and potential job creation. Therefore, it is a defeat for both consumers and the innovation fostered by true competition."

Expectations are Verizon will probably legally challenge the decision.

For AT&T, they're in the midst of attempting to acquire T-Mobile USA, and so unfortunately will have to walk softly, as the implications are if they fight too hard the deal may be rejected.

It does make you wonder if the timing of the FCC was based on that event.

Verizon was trading at $37.71, falling $0.05, or 0.13 percent, as of 12:13 PM EDT. AT&T was at $30.52, down $0.02, or 0.05 percent.

AT&T (T) CEO Rejects Higher Price Theory in T-Mobile Deal

Assertions by AT&T Inc (NYSE:T) detractors coming as a result of the bid of the company for T-Mobile, saying it will result in higher prices, was argued against by AT&T CEO Randall Stephenson

Speaking at an event in New York sponsored by the Council on Foreign Relations, Stephenson cited a government report which stated prices over the last 10 years have dropped about 50 percent after the merger of five wireless companies during that time.

Another argument he used was concerning AT&T customers themselves, which had paid in the past about $1.90 a megabyte of wireless data, which has been whittled down to close to 16 cents at this time.

AT&T offered $39 billion to Deutsche Telekom AG's T-Mobile USA unit, which is the fourth-largest in the country, and is a low-price leader.

AT&T closed Wednesday at $30.71, gaining $0.66, or 2.20 percent.

AT&T (T) Faces Divestitures in T-Mobile Deal

Facing scrutiny and some opposition from competitors, AT&T (NYSE:T) CEO Randall Stephenson said he expects to have to divest of some of the assets they get when they acquire T-Mobile.

Included in the divestiture will be some of the wireless spectrum and customers that come with the company.

“We anticipate there will be some markets we will have to divest,” Stephenson said.

"AT&T’s plan to buy T-Mobile from Deutsche Telekom AG for $39 billion is expected to face heavy scrutiny from regulators and opposition from consumer-advocacy groups and competitors. Rivals Sprint (NYSE:S) and Clearwire Corp. (NASDAQ:CLWR) have been vocal about the alleged harmful impact of the deal," said Marketwatch.

Verizon Wireless (NYSE:VZ) Chief Executive Dan Mead previously said his company sees an opportunity to potentially scoop up some divested assets.

This is how Sprint and Clearwire need to view the potential transaction, not from a place of weakness where all they attempt to do is stop the deal from going forward.

AT&T was trading at $30.89, gaining $0.84, or 2.80 percent, as of 1:19 PM EDT.

Sprint (S) Should Focus on Self, Not AT&T (T)

Sprint (NYSE:S) seems to be losing its focus on the proposed deal for AT&T (NYSE:T) to acquire T-Mobile, fighting hard to influence the merger not to be allowed to go forward.

The problem for Sprint is even if the deal isn't allowed to go ahead, how does that help them if after the smoke clears they still have to deal with the same issues they faced before the bid by AT&T.

Sprint said in a press release that the merger "would reverse nearly three decades of actions by the U.S. government and the courts that modernized and opened U.S. communications markets to competition."

That would be more convincing if Sprint was in a more competitive position. But since they're struggling to find themselves, it's hard to see why the deal shouldn't go through from that perspective, as if it doesn't, they would still have to compete against the two entities.

It's there they must find the answer, not in worrying about what its competitors are doing that they have no control over.

When measured against lobbying spend, Sprint is also way behind AT&T, making the time and effort spent on the actions dubious at best, and unlikely to succeed.

Instead they should focus on growing and innovating their way out of the challenges they face; something they'll have to do either way.

Sprint closed Tuesday at $4.62, falling $0.16, or 3.35 percent.

Nvidia (NVDA) Shares Soar on Mobile Computing Outlook

Shares of Nvidia Corp. (NASDAQ:NVDA) were hopping today on news JMP Securities upgraded the stock, citing a stronger outlook in the mobile computing market for the company.

JMP analyst Alex Gauna drew attention to Nvidia’s Tegra mobile computing chip as strengthening into a major player in the market for smartphones and tablet PCs.

Nvidia and its “ARM-based Android (NASDAQ:GOOG) and Windows (NASDAQ:MSFT) initiatives are in a position to re-accelerate financial performance in coming quarters and years,” Gauna noted.

“We believe Nvidia Tegra technology will continue to be in the lead reference designs for new Android operating systems," he wrote in a note to clients.

The Tegra processors produced by Nvidia are also in popular tablets and smart phones including those made by such companies as Motorola Mobility (MMI) and Samsung.

Gauna also noted that the proposed merger between AT&T Inc. (T) and the Deutsche Telekom-owned T-Mobile USA could work to the benefit of Nvidia, saying “it is likely to ignite subscriber retention/acquisition campaigns.”

“Nvidia’s position as the high-performance multi-core Apps processing leader will make it one of the cornerstones of these marketing campaigns,” Gauna said, adding that Nvidia is “largely agnostic to share shift among the carriers.”

Nvidia was trading at $19.50, up $0.87, or 4.64 percent, as of 2:49 PM EDT.




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Silver Lining for Sprint (S) in AT&T (T) Deal?

After digesting the consequences of the AT&T (NYSE:T) bid for T-Mobile for Sprint (NYSE:S), some analysts are seeing some positives in the situation which could help the company grow in that scenario.

One is the strong possibility prices will rise because of less competition, which Sprint could probably successfully offer a lower but profitable alternative.

Second, there are a number of consumers who don't want to do business with AT&T, especially with its network and that could mean if the deal goes through, a number of T-Mobile users could migrate to Sprint.

Sprint was trading at $4.69, up $0.13, or 2.74 percent, as of 12:11 PM EDT.

Goldman (GS) Plunges in M&A Ratings

Goldman Sachs (NYSE:GS) plunged to 10th place in M&A rating in the quarter, missing out on the two mega deals which made the difference between now and its second place finish in the last quarter.

Goldman (GS), advised on $71 billion worth of U.S. deals in the first quarter, far less than JPMorgan Chase & Co's (NYSE:JPM) chart-topping $170 billion, and even beneath much smaller banks such as Rothschild, Evercore Partners Inc (NYSE:EVR) and Lazard Ltd (NYSE:LAZ).

It is Goldman's lowest quarterly ranking since Thomson Reuters began tracking U.S. M&A deals in 1990. The drop is mainly because the firm did not advise on two mega deals: AT&T Inc's (NYSE:T) $39 billion deal for T-Mobile USA and the $59 billion restructuring of insurer American International Group Inc (NYSE:AIG).

"The numbers are an example of the lumpiness of the business, particularly when you get the mega-deals," said Michael Holland, chairman of New York-based money manager Holland & Co.

Goldman closed Thursday at $159.91, gaining $0.38, or 0.24 percent.




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Sprint (S) Value So Low Must Merge

After the offer by AT&T (NYSE:T) for T-Mobile, it appears that Sprint Nextel Corp. (NYSE:S) has been put in the postiion where it must make a merger deal with someone.

Sprint’s 11 percent plunge to $4.49 after the announcement of the T-Mobile USA deal has left its stock trading below the company’s $4.87 a share in assets minus liabilities. That means investors can now buy Sprint for 92 cents on the dollar, cheaper than 99 percent of companies in the Standard & Poor’s 500 Index excluding financials, according to data compiled by Bloomberg. Sprint’s licenses from the U.S. Federal Communications Commission, which give it the right to operate its network in specific regions, alone are worth $19.9 billion, 46 percent more than its market capitalization of $13.6 billion, the data show.

AT&T’s purchase of T-Mobile USA from Deutsche Telekom AG (DTE) will give the combined company more than double the customers of Sprint, while Verizon Wireless has almost twice the market share. To boost value, Overland Park, Kansas-based Sprint may buy the remaining stake in partner Clearwire Corp. (CLWR) or another carrier such as MetroPCS Communications Inc. (PCS), according to Dan Hays, a director at consultancy PRTM. It may also become a target for Verizon as carriers that run on the same network technology are forced to combine, he said.

“Someone, whether it’s Sprint or Verizon (NYSE:VZ), is going to have to serve as a catalyst for the consolidation,” said Washington- based Hays, who specializes in telecommunications. “What’s clear is that they can’t all afford to remain independent.”

Sprint closed Wednesday at $4.49, up $0.02, or 0.45 percent.



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Nokia (NOK) Says No to Symbian CDMA Phones

One of the major transitions that Nokia (NYSE:NOK) will make as it changes under new CEO Stephen Elop is an embrace of the wireless technology CDMA, which Verizon Wireless (NYSE:VZ) and Sprint (NYSE:S) use. For years, Nokia has only released devices that work on another — more widespread — wireless technology called GSM. In the U.S., that limited the introduction of Nokia phones to AT&T (NYSE:T) and T-Mobile USA. In a strategy to widen its addressable audience, however, Nokia will eventually issue CDMA handsets, Elop revealed at the February Mobile World Congress trade show.

Those Nokia CDMA handsets, though, are still off in the future. In an interview at the CTIA Wireless conference, Nokia USA Vice President and General Manager Mark Slater told Forbes that the Finnish company is unlikely to make any CDMA phones that run on Symbian, Nokia’s longtime mobile operating system. Instead, Nokia will wait until it has devices on Microsoft’s (NASDAQ:MSFT) Windows Phone platform. “Our go-forward smartphone platform for CDMA will be Windows,” said Slater.

That means no CDMA Nokia phones until 2012 or even later, potentially. Nokia has been understandably vague about the timing of its Windows Phone handsets, hinting that the first device may arrive before the end of the year. The bulk of Nokia Windows Phones will come later. In a recent regulatory filing, Nokia indicated that its transition to Windows Phone as its primary smartphone platform would take two years.

For now, Nokia’s focus in the U.S. remains on affordable, Symbian, GSM-based smartphones. On Sunday night, the day before the CTIA show officially kicked off, Nokia unveiled its latest entry, the T-Mobile Astound. The device is a slim touch-screen powered by the latest version of Symbian. It will go on sale exclusively at T-Mobile USA in April for $79.99.

Nokia was trading at $8.39, down $0.01, or 0.12 percent, as of 1:56 PM EDT.



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Sprint (S) CEO Hesse Fears AT&T (T), T-Mobile Deal

In a deal that could result in Sprint (NYSE:S) being considered largely irrelevant, CEO Dan Hesse said he believes the deal would "Stifle Innovation," i.e. they couldn't compete with the new entity.

Hesse's comments were made at the CTIA WIRELESS 2011 Conference today, where he was part of a keynote address to launch the event.

CEOs from AT&T (NYSE:T) and Verizon (NYSE:VZ) were also part of the keynote.

Hesse noted that the merger of T-Mobile and AT&T would result in a 79 percent market share in the U.S. if it is allowed to proceed.

Verizon CEO Dan Mead on the other hand wasn't that concerned, saying his company has also grown via M&A, and there is a lot of competition in the wireless sector.

Sprint was trading at $4.51, gaining $0.1475, or 3.38 percent, as of 12:02 PM EDT.

Sprint's (S) Future Bleaker with AT&T (T) Deal

If the bid by AT&T for T-Mobile from Deutsche Telekom AG (NYSE:DTE) is allowed to go forward, the future of Sprint (NYSE:S) is much bleaker and more challenging, as it would fall to an even weaker No. 3 position.

Shares of Sprint had been trading down by about 17 percent in earlier trading, and closed down well over 13 percent on the day, as implications of the deal for Sprint hit investors.

With the takeover announced yesterday, AT&T would become the largest U.S. mobile-phone company. The deal still needs regulatory approval. Sprint also held talks with Deutsche Telekom about buying T-Mobile, people with knowledge of the matter said this month.

By acquiring T-Mobile, Sprint would have gained ground on larger rivals Verizon Wireless (NYSE:VZ) and AT&T. Now, AT&T could leave Sprint as a far weaker No. 3 player in the industry, said Craig Moffett, an analyst at Sanford C. Bernstein & Co. in New York.

“A Sprint deal is now off the table and Sprint is left to go it alone,” Moffett said in a research note today. The AT&T deal, if approved, makes Sprint’s prospects “decidedly worse,” he said.

Moffett cut his rating on Sprint to “underperform” and lowered his price estimate for the stock to $3 from $5, saying the company is worth about $9.2 billion. Moffett estimates Sprint’s operations are worth $22.2 billion and that the net value of its non-operating assets, including debt, cash and a stake in Clearwire Corp. (NASDAQ:CLWR), is negative $13 billion.

Sprint closed Monday at $4.36, falling $0.69, or 13.61 percent.

Verizon (VZ) May Win in AT&T (T), T-Mobile Deal

The proposed acquisition by AT&T (NYSE:T) of T-Mobile could end up being a major positive for Verizon Wireless (NYSE:VZ).

"While Verizon Wireless would clearly become the nation's second-largest mobile carrier after the deal, industry consolidation that marginalizes low-cost offerings could benefit the company by boosting its power to control pricing. Additionally, Verizon could win customers from a distracted AT&T, which analysts say likely will face tough and prolonged regulatory scrutiny for the merger," said the Wall Street Journal.

"AT&T's deal for T-Mobile also contains some worrisome aspects for Verizon Wireless, including a larger and more emboldened rival in AT&T. RBC Capital Markets wrote in a note Monday that Verizon "could see incremental pressure from facing a stronger competitor."

"Another possible investor concern is that Verizon may be spurred to spend money in reaction to the AT&T deal. While analysts say it's unlikely Verizon would go after Sprint Nextel Corp., they say the company could improve ties with Vodafone, a relationship that has had its rocky points."

Verizon was trading at $36.44, up $0.60, or 1.67 percent, as of 2:52 PM EDT.




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JPMorgan (JPM) Flexes Muscles in AT&T (T) Loan Deal

While the size of the loan as measured by other takeovers isn't that big of a deal, JPMorgan (NYSE:JPM) has definitely made a statement as to their confidence in themselves and the market, as well as AT&T (NYSE:T), with the $20 billion in financing provided to AT&T for their bid for T-Mobile USA from Deutsche Telekom AG.

The loan will cover about half of AT&T's surprise $39 billion acquisition attempt of T-Mobile USA from Deutsche Telekom AG. JPMorgan is also advising AT&T in an investment-banking capacity. The acquisition, which still must clear regulatory reviews, could create the largest wireless company in the U.S.

If the loan is completed with J.P. Morgan as the sole lender, it would represent the largest single-bank loan funding a takeover deal in history.

A person familiar with the loan, one of the biggest ever single-bank-led financings for a takeover, said the deal would show J.P. Morgan was "open for business" and that banks have the ability and willingness to make loans.

The loan is an 18-month commitment for a one-year unsecured bridge loan that AT&T can use to fund the deal. Further terms of the deal haven't been made public.

While other bank financings have been bigger, most this size would require multiple lenders syndicating the loan. Such a large loan coming from one institution signals J.P. Morgan's muscular lending ability and its confidence in the capital markets and in the borrower.

JPMorgan was trading at $45.51, down $0.23, or 0.50 percent, as of 1:20 PM EDT.




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AT&T (T) Acquiring T-Mobile USA for $39 billion

The announced acquisition of T-Mobile USA by AT&T (NYSE:T) from Deutsche Telekom in cash and stock for $39 billion will make it the largest cellphone company in America.

The deal would reduce the number of wireless carriers with national coverage from four to three, and is sure to face close regulatory scrutiny. It also removes a potential partner for Sprint Nextel Corp. (NYSE:S), the struggling No. 3 carrier, which had been in talks to combine with T-Mobile USA, according to Wall Street Journal reports.

AT&T is now the country's second-largest wireless carrier and T-Mobile USA is the fourth largest. The acquisition would give AT&T 129 million subscribers, vaulting it past Verizon Wireless' 102 million. The combined company would serve about 43 percent of U.S. cellphones.

For T-Mobile USA's 33.7 million subscribers, the news doesn't immediately change anything. Because of the long regulatory process, AT&T expects the acquisition to take a year to close. But when and if it closes, T-Mobile USA customers would get access to AT&T's phone line-up, including the iPhone (NASDAQ:AAPL).

The effect of reduced competition in the cellphone industry is harder to fathom. Public interest group Public Knowledge said that eliminating one of the four national phone carriers would be "unthinkable."

AT&T was trading at $28.20, up $0.26, or 0.93 percent, as of 11:35 AM EDT.





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