Google To Enter Into MVNO Arrangement With T-Mobile
Jan. 22, 2015 8:58 AM ET | 3 comments | About: T-Mobile US, Inc. (TMUS), Includes: GOOG, GOOGL
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)
Summary
•TMUS reported strong postpaid net ads in fourth quarter.
•GOOG decides to enter into MVNO arrangement with TMUS and S.
•MVNO arrangement will help TMUS increase its future revenues.
In my last article on T-Mobile (NYSE:TMUS), I mentioned that TMUS would report solid postpaid net additions in future. I pointed out that the iPhone 6, launch of new handsets, attractive 4G LTE speeds and promotional pricing would be responsible for the solid postpaid momentum in the fourth quarter. The company recently reported the preliminary numbers for the fourth quarter, and added around 1.3 million net postpaid subscribers; out of which, 1 million were phone net additions, which is an encouraging sign, as phone net adds also have voice revenues.
There has been encouraging news for the company, as Google (NASDAQ:GOOG) (NASDAQ:GOOGL) has now decided to directly sell mobile phone plans to its customers. Obviously, GOOG cannot build its own network in this short period of time, so it has decided to enter into a MVNO arrangement with TMUS and Sprint (NYSE:S). In a MVNO arrangement, the company does not need to own a wireless network, and instead buys bulk access to network services from wireless carriers and then operates the network itself.
This news might not help the company add more postpaid customers in the future, but it will help the company drive higher revenues by giving GOOG access to its network. TMUS has 1.5x-to-1.6x of spectrum per subscriber, whereas its competitors Verizon (NYSE:VZ) and AT&T (NYSE:T) have the same number in a range of 1x or less. So this means the company has the capacity to sell some of its network services and maintain its robust network. Furthermore, this could provide the company with much needed funds to participate in future spectrum auctions and expand its 4G LTE framework. Lastly, it will increase competition in the market, and GOOG will set its own packages and prices, which is not welcome news for giants like VZ and T.
http://seekingalpha.com/article/2840276-updat...bile?ifp=0
......with increased data flow projections, there seems to be a war going on between the Big Corps for control of some of it : )
Pony Up Mc
Jan. 22, 2015 8:58 AM ET | 3 comments | About: T-Mobile US, Inc. (TMUS), Includes: GOOG, GOOGL
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)
Summary
•TMUS reported strong postpaid net ads in fourth quarter.
•GOOG decides to enter into MVNO arrangement with TMUS and S.
•MVNO arrangement will help TMUS increase its future revenues.
In my last article on T-Mobile (NYSE:TMUS), I mentioned that TMUS would report solid postpaid net additions in future. I pointed out that the iPhone 6, launch of new handsets, attractive 4G LTE speeds and promotional pricing would be responsible for the solid postpaid momentum in the fourth quarter. The company recently reported the preliminary numbers for the fourth quarter, and added around 1.3 million net postpaid subscribers; out of which, 1 million were phone net additions, which is an encouraging sign, as phone net adds also have voice revenues.
There has been encouraging news for the company, as Google (NASDAQ:GOOG) (NASDAQ:GOOGL) has now decided to directly sell mobile phone plans to its customers. Obviously, GOOG cannot build its own network in this short period of time, so it has decided to enter into a MVNO arrangement with TMUS and Sprint (NYSE:S). In a MVNO arrangement, the company does not need to own a wireless network, and instead buys bulk access to network services from wireless carriers and then operates the network itself.
This news might not help the company add more postpaid customers in the future, but it will help the company drive higher revenues by giving GOOG access to its network. TMUS has 1.5x-to-1.6x of spectrum per subscriber, whereas its competitors Verizon (NYSE:VZ) and AT&T (NYSE:T) have the same number in a range of 1x or less. So this means the company has the capacity to sell some of its network services and maintain its robust network. Furthermore, this could provide the company with much needed funds to participate in future spectrum auctions and expand its 4G LTE framework. Lastly, it will increase competition in the market, and GOOG will set its own packages and prices, which is not welcome news for giants like VZ and T.
http://seekingalpha.com/article/2840276-updat...bile?ifp=0
......with increased data flow projections, there seems to be a war going on between the Big Corps for control of some of it : )
Pony Up Mc
