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Is Sprint Mulling Over Wireless Talks with Comcast-Charter?
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Per the latest The Wall Street Journal report, U.S. national wireless carrier Sprint Corp. (S - Free Report) might be eyeing a merger or network-resale agreement with two major U.S. cable multi-service operators (MSOs), Comcast Corp. (CMCSA - Free Report) and Charter Communications Inc. (CHTR - Free Report) . The approval of the negotiation is likely to boost the two U.S. cable companies' wireless offerings.
If reports are to be believed, we might witness two scenarios unfolding in the coming days. On one side, Comcast and Charter Communications may be working on plans to ink a network-resale agreement on better terms, which will enable them to resell services on Sprint’s wireless network. On the other side, the two cable giants may be jointly mulling over to acquire Sprint.
Nothing concrete has been confirmed by any of the companies'. This reported negotiation with Comcast and Charter Communications has put Sprint’s merger talks with T-Mobile US Inc. (TMUS - Free Report) on hold till the end of this July.
If this wireless services deal with the cable companies materializes, then the merger with T-Mobile US remains unpredictable. It is yet to be seen whether Sprint and T-Mobile US will try for a merger yet again or not. However, if a merger happens, a combined Sprint-T-Mobile US will become a formidable entity which can challenge the telecom market supremacy of Verizon and AT&T.
We see a lot of uncertainties have already started clubbing up together and this will continue until something factual definite information in unveiled by the companies.
Comcast-Charter Communications’ Wireless Venture
Comcast and Charter are entering the wireless business in hopes of adding another product to their suite of services and check subscriber churn management.
On May 8, 2017, Comcast and Charter Communications agreed to jointly work on their wireless services businesses so as to better explore their opportunities, accelerate and enhance each other’s ability to participate in the national wireless marketplace.
For this much-hyped wireless venture both companies have already inked a Mobile Virtual Network Operator (MVNO) agreement with U.S. telecom behemoth, Verizon Communications Inc. (VZ - Free Report) , to utilize its wireless network.
Comcast is expected to launch its new ‘Xfinity Mobile’ wireless service for its existing broadband customers over the next few weeks of this month. The company also bought $1.7 billion in wireless spectrum at a Federal Communications Commission’s (FCC) Broadcast Incentive auction in Apr 2017, to bolster its wireless services. Meanwhile, Charter Communications plans to offer wireless service in 2018.
Bottom Line
The wireless venture may be aimed at retaining customers in this competitive world. Apart from a saturated multi-channel U.S. video market in the U.S., the US. pay-TV industry remains affected by the ongoing massive consolidation between telecom and cable TV operators to strengthen their base. Online video streaming service providers such as Netflix Inc. (NFLX), Hulu.com, YouTube etc., pose severe competitive threats to cable TV operators because of their extremely cheap source of TV programming which is in vogue even in volatile economic conditions.
Zacks Rank and Price Performance
The three wireless companies, Sprint, Verizon and T-Mobile US fall under the Zacks-categorized Wireless National industry. The cable companies, Comcast and Charter Communications have been sited under the Zacks categorized Cable Television industry.
Let’s see how the companies’ price performance has varied with their sub-industry and how they are ranked under the Zacks classification.
From May 8, 2017 till date, the share price of Sprint has climbed 3.35%, while that of Verizon and T-Mobile US has declined by 1.89% and 4.52%, respectively. The Zacks categorized Wireless National industry has declined by 1.97% over the said time frame.
Over the abovesaid time frame, share price of Comcast and Charter Communications inched up 0.99% and 2.71%, respectively, outperforming the Zacks categorized Cable TV industry’s 0.62% gain.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500.
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Is Sprint Mulling Over Wireless Talks with Comcast-Charter?
Per the latest The Wall Street Journal report, U.S. national wireless carrier Sprint Corp. (S - Free Report) might be eyeing a merger or network-resale agreement with two major U.S. cable multi-service operators (MSOs), Comcast Corp. (CMCSA - Free Report) and Charter Communications Inc. (CHTR - Free Report) . The approval of the negotiation is likely to boost the two U.S. cable companies' wireless offerings.
If reports are to be believed, we might witness two scenarios unfolding in the coming days. On one side, Comcast and Charter Communications may be working on plans to ink a network-resale agreement on better terms, which will enable them to resell services on Sprint’s wireless network. On the other side, the two cable giants may be jointly mulling over to acquire Sprint.
Nothing concrete has been confirmed by any of the companies'. This reported negotiation with Comcast and Charter Communications has put Sprint’s merger talks with T-Mobile US Inc. (TMUS - Free Report) on hold till the end of this July.
If this wireless services deal with the cable companies materializes, then the merger with T-Mobile US remains unpredictable. It is yet to be seen whether Sprint and T-Mobile US will try for a merger yet again or not. However, if a merger happens, a combined Sprint-T-Mobile US will become a formidable entity which can challenge the telecom market supremacy of Verizon and AT&T.
We see a lot of uncertainties have already started clubbing up together and this will continue until something factual definite information in unveiled by the companies.
Comcast-Charter Communications’ Wireless Venture
Comcast and Charter are entering the wireless business in hopes of adding another product to their suite of services and check subscriber churn management.
On May 8, 2017, Comcast and Charter Communications agreed to jointly work on their wireless services businesses so as to better explore their opportunities, accelerate and enhance each other’s ability to participate in the national wireless marketplace.
For this much-hyped wireless venture both companies have already inked a Mobile Virtual Network Operator (MVNO) agreement with U.S. telecom behemoth, Verizon Communications Inc. (VZ - Free Report) , to utilize its wireless network.
Comcast is expected to launch its new ‘Xfinity Mobile’ wireless service for its existing broadband customers over the next few weeks of this month. The company also bought $1.7 billion in wireless spectrum at a Federal Communications Commission’s (FCC) Broadcast Incentive auction in Apr 2017, to bolster its wireless services. Meanwhile, Charter Communications plans to offer wireless service in 2018.
Bottom Line
The wireless venture may be aimed at retaining customers in this competitive world. Apart from a saturated multi-channel U.S. video market in the U.S., the US. pay-TV industry remains affected by the ongoing massive consolidation between telecom and cable TV operators to strengthen their base. Online video streaming service providers such as Netflix Inc. (NFLX), Hulu.com, YouTube etc., pose severe competitive threats to cable TV operators because of their extremely cheap source of TV programming which is in vogue even in volatile economic conditions.
Zacks Rank and Price Performance
The three wireless companies, Sprint, Verizon and T-Mobile US fall under the Zacks-categorized Wireless National industry. The cable companies, Comcast and Charter Communications have been sited under the Zacks categorized Cable Television industry.
Let’s see how the companies’ price performance has varied with their sub-industry and how they are ranked under the Zacks classification.
From May 8, 2017 till date, the share price of Sprint has climbed 3.35%, while that of Verizon and T-Mobile US has declined by 1.89% and 4.52%, respectively. The Zacks categorized Wireless National industry has declined by 1.97% over the said time frame.
Over the abovesaid time frame, share price of Comcast and Charter Communications inched up 0.99% and 2.71%, respectively, outperforming the Zacks categorized Cable TV industry’s 0.62% gain.
Sprint and Charter Comuunications carry a Zacks Rank #3 (Hold), while Comcast carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Sell These Stocks. Now.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500.
See today's Zacks "Strong Sells" absolutely free >>.