Category Archives: Telecom

Verizon Acquires Yahoo for $4.83 Billion



Setting the stage for a bigger internet leap, Verizon Communications Inc. has acquired Yahoo Inc’s core internet business for a sum of $4.83 billion.

The country’s largest telecom giant has revealed its plans to combine Yahoo with another faded online star AOL, which was also acquired by Verizon last year for an amount of $4.4 billion. The costs of high stock compensation deals that were given to employees by Marissa Mayer, Yahoo CEO, will also be covered by Verizon.

The current CEO, Marissa Mayer, seems to remain with the company for the time being. Although speculations are there that she is not going to remain for long at the position.

The acquisition is expected to complete by the first quarter of next year. Tim Armstrong, AOL CEO passed a statement stating “We have enormous respect for what Yahoo has accomplished: This transaction is about unleashing Yahoo’s full potential, building upon our collective synergies, and strengthening and accelerating that growth,” “Combining Verizon, AOL and Yahoo will create a new powerful competitive rival in mobile media, and an open, scaled alternative offering for advertisers and publishers.”

Lowell McAdam, Verizon chief executive said “Just over a year ago we acquired AOL to enhance our strategy of providing a cross-screen connection for consumers, creators and advertisers. The acquisition of Yahoo will put Verizon in a highly competitive position as a top global mobile media company.” Verizon will take over the ailing company’s online assets including mail, search and instant messaging, as well as its real estate holdings and ad technology. Yahoo’s cash, stakes in Alibaba Group Holdings and Yahoo Japan are excluded from the sale.

By combining AOL and Yahoo, Verizon is looking forward to providing a serious challenge to its two main competitors, Google and Facebook. However, a UBS analyst commented “Consumer interest in Go90, Verizon’s mobile video portal, has been tepid,” “Meanwhile, trends at Yahoo have been difficult, with the company losing share of mobile ad dollars to the heavy weights (Google, Facebook, etc.)…. While this deal will barely move the growth or margin profile of Verizon, synergies over time could provide upside to earnings.”

Major US Carriers Extend Condolences in the Form of Free Calls and Texts to Turkey After Istanbul Airport Attack


The Istanbul Airport Attack has shaken the very basis of humanity, leaving dozens dead and many severely wounded. The major US carriers have come forward and extended a helping hand in the tough times for the relatives and family members of the unfortunate victims. AT&T, Sprint, Verizon and T-Mobile are providing free calls and text messages from the US to Turkey.

As per an announcement made by AT&T, any charges for calls made by landline or wireless customers from the US to Turkey in between June 28 to June 30, were waived or credited. This covered texting, landline, and mobility (GoPhone and Postpaid) calls. “Our thoughts are with the people of Istanbul and our customers who have friends and family there,” as per a statement passed by AT&T following the attacks.

Another major carrier, Verizon also wanted to support its customers affected by the airport attack in Istanbul. As per an announcement, the company did not charge its customers for international texts and calls made in between June 28 and June 29 from the US to Turkey. The announcement covers both landline as well as wireless calls. “More than 170,000 Verizon employees worldwide extend condolences to all our friends and family in Turkey,” the company mentioned in a statement posted on its website.

T-Mobile also joined other carriers in helping its customers connect with family and friends by offering free services from the US to the affected country. John Legere, president and CEO of T-Mobile said “Today’s attack in Istanbul is both tragic and horrifying,” “Our hearts are with everyone affected by this senseless act.” The offer is in effect from June 28 to July 5, 2016 and valid for all T-Mobile Simple Choice prepaid and postpaid customers, as well as customers of GoSmart Mobile, MetroPCS and WalMart Family Mobile.

Marcelo Claure, Sprint CEO, also passed a message “Our thoughts and prayers go out to all of those personally affected during this difficult time,” “We want to do everything we can to show our support and heartfelt sympathy to all Sprint, Boost Mobile, and Virgin Mobile customers with family and friends in the region.” The company is waiving international call fees as well as message fees from June 28 to July 5.

Verizon May Beat AT&T in Bidding for Yahoo

Verizon to overtake Yahoo

According to financial analysts at Barclays, AT&T does not seem to be serious about bidding for Yahoo, leaving Verizon to be the front runner buyer of the company.

A research note written by Barclays analysts says “We are hard pressed to see AT&T enter the Yahoo frenzy.” “Recent reports from Bloomberg suggest that AT&T might be interested in Yahoo’s Internet business. While it is premature to assume that AT&T is not interested, we find it hard to envision the carrier earnestly would move forward with a bid given it has its hands full integrating DTV, is participating in the broadcast spectrum auction and seems focused on asset optimization vs. augmentation.”

AT&T’s decision to buy Yahoo would depend on many aspects, such as the content included in the deal, the scalability of the deal in terms of subscribers, the additives available through transaction and the bidding amount.

Last month, AT&T emerged to be in direct competition with Verizon by submitting a bid for Yahoo. The internet company received nearly 10 offers ranging from $4 billion to $8 billion from the interested companies. AT&T was initially disinterested but later entered into the list of bidders by submitting a bid for the company’s core internet business. Other bidders include entities supported by Warren Buffett and Bain Capital.

AT&T is currently working to incorporate its $49 billion purchase of DirecTV. The company has committed to offer a refreshed DirecTV service with availability across AT&T’s networks as well as the networks of its competitors in the later part of this year.

The company seems interested in Yahoo’s advertising business, as it may help in AT&T’s strategy to increase its advertising technologies and offerings. The results of the cross-screen advertising trials for AdWorks business conducted with Opera Mediaworks, was announced by the company last month. Among the companies that participated in the trials, Walmart was also one and reported “a statistically significant lift in both brand and message favorability.” The trials pooled the advertising reach of AT&T’s 13 million TV households with 285 million mobile phones running the advertising technology of Opera.

As per Barclays analysts, the bidding for Yahoo is one of the rare major potential transactions in the telecom sector. “The combination of a presidential election year and the current broadcast spectrum auction process has diminished the prospect for larger scale M&A activity across the U.S. telecom sector, in our view,” commented analysts.

ROBOCOP Act: The Act to Stop Unwanted Calls Rises Again in Senate

robocop act

The act that would coerce service providers to enable customers to block unwanted automated and prerecorded robocalls was introduced two months ago by Jackie Speier, Congresswoman. Under the act, consumers would have the choice of whether or not they want to use a call blocker. The bill is currently lying indolently in committee. The reason cited by AT&T CEO Randall Stephenson, mentions that permission needs to be given from FCC and without its approval, robocall blockers cannot be deployed, which authorities have claimed to be wrong.

Chuck Schumer, New York Senator, announced at his weekly press event on Sunday that he would be reintroducing the ROBOCOP Act, which would instruct the FCC to necessitate that telephone service providers give their customers access to robocall-blocking technology without any charge.

“Despite the existing ‘Do Not Call’ registry, the robocall problem has returned in a serious way,” said Schumer. “It’s an epidemic that we’ve got to stop — whether it’s the landline or the mobile phone. It’s taking far too long for telecom companies to act.”

Chuck Bell from Consumers Union was also present to stand beside Schumer in demanding federal lawmakers do something about robocalls.

He said “Most Americans have signed up for the Do Not Call list, but the unwanted calls from telemarketers and scam artists have just gotten worse.”

The present mounting issue with robocalls is that the majority of them come from ID thieves and scammers, who care about very little about any laws against the practice. Most of these use spoofed numbers, which is legal if done without intention to defraud, such as protecting news sources. But it also makes it much more difficult for investigators to track culprits.

In spite of the availability of certain methods to reduce these calls, the number that has been deployed so far by telecom service providers on any large scale is very small.

Certain campaigns to end robocalls have been ongoing to compel companies to stop making excuses and block the infuriating robocalls.

Verizon Reaches an Agreement with Unions to End Strike


As per the U.S. Labor Department, Verizon and its two unions extended an agreement on a new labor contract, flagging about 39,000 landline employees to resume work after a long strike of 44 days.
As per a statement passed by Labor Secretary Thomas Perez, the four-year deal is going to be put into writing and the union members will start working next week. It will be the first time that the agreement will be expanded to 165 Verizon wireless employees.
Union leaders are thankful to Perez who brought Verizon Chief Executive Officer Lowell McAdam and two union executives to Washington for discussion of alternatives to resolve the issue.
“This proves that when we stand together we can raise up working families, improve our communities and protect the American middle class,” said CWA President Chris Shelton.
IBEW President Lonnie Stephenson shared that the provisional contract is a significant advancement in bringing the six-week strike to an end and keep “good Verizon jobs in America.”
Chief Administrative Officer Marc Reed said in a statement “Verizon is very pleased with this ‘agreement in principle.” “We look forward to having all of our employees soon back at work in their regular positions and doing what they do best — serving our customers.”
The shares of Verizon grew less than 1 percent to $50.62 at the close Friday in New York.
Roger Entner, an analyst with Recon Analytics LLC said “In the end, it looks like everyone wins.”
“The employees will get an increase over four years, which is a year longer than originally proposed. And Verizon can get all its employees back to work, including those that had been filling in on the landline side.”
To fulfil business requirements during the strike, Verizon had dispatched non-union workers and managers to call centers and field-service assignments. As per Chief Financial Officer Fran Shammo, the strike has affected the company’s landline business. After-effects of the strike might result in non-inclusion of FiOS TV or broadband customers in the quarter.
In addition to FiOS business, the company has been casting off union-heavy operations in three states since last month.
“This might be the last big strike for Verizon because wireline will have less and less leverage in an increasingly wireless business,” said Entner.

Verizon Trademark “One Talk” Hints Mobile, Landline Combination

Verizon, a leading network carrier in the US, filed a trademark application for a “One Talk” service which hints at a potential move from the carrier to integrate fixed and mobile services. The network’s trademark application states- “Telecommunications services, namely, providing telephone services; and providing a unified system of integrated fixed and mobile voice services where landline and mobile communications devices can take the same calls, use the same telephone numbers and share the same calling features such as voice and text messaging.”

verizone network

Verizon’s trademark application, reported by Phandroid, indicates the network’s plan to offer a service that would allow its landline and mobile customers to seamlessly shift their conversations to and from the company’s wireless and wireline calling services. The Phandroid report states- “We imagine the company will require a special home phone to take full advantage of the feature, though it’s possible the call mirroring options could be made available no matter which phone you use. Although many people have moved to mobile phones for their primary communication needs, there’s still a big crowd of folks who subscribe to home phone service, else availability of those services wouldn’t be as plentiful as they are today. For those people, using your phone while you’re at home doesn’t need to be a watered down, ancient experience — make it just as smart and convenient as if you were using a smartphone, and we’re happy.”
And, Phandroid also said that such services are already hitting the market. Last year, AT&T detailed its “NumberSync” technology that is designed to allow customers to share their primary phone number with other connected devices such as smartwatches, even if their phone isn’t connected to a cellular network.
Also, in March, Google announced its Fiber Phone service, which builds on the Google Fiber Internet and TV service to create a triple-play service offering. Shiver-Blake said “Your Fiber Phone number lives in the cloud, which means that you can use it on almost any phone, tablet or laptop.” He further added, “It can ring your landline when you’re home, or your mobile device when you’re on-the-go.”

Performance of Top U.S. Carriers in 2014

top usa


Providing services to millions of people and ruling the telecom sector of one of the most competitive and dynamic countries of the world, these are companies that have topped the charts as strong U.S. carriers of 2014. In an interesting and eventful year for the U.S. carriers, the race paced up with intense competition and aggressive price wars among major players.

Among the stronger U.S. carriers, Verizon, who is also the market leader in the telecom sector, generated the highest revenue from wireless services in the first three quarters owing to its large postpaid subscriber base and higher plan charges than its other competitors. Verizon can certainly manage to charge more for its services because of its network quality and wide 4G LTE and enhanced LTE coverage. Its LTE network covers about 500 locations, while XLTE has been launched in over 400 cities across the country. Verizon’s XLTE has the potential to be twice as fast as its existing 4G network, however, that depends on the user location. T-Mobile, in the man time, took the lead in the top line growth. Pushing its wireless revenues that grew over 21% year-over-year in the ninth period ending September 2014, it proudly boasted of robust postpaid subscriber gains (6.2 million). Sprint chased its competing carriers because of its declining user base and low ARPU (Average Revenue per User).

As far as EBITDA and EBITDA margins are concerned, Verizon yet again led its peers owing to its higher-margin plan offerings, bounded marketing expenses and lower proportion of customers opting for no-subsidy plans. Both Sprint and T-Mobile seem to be left behind the market leaders owing to their high marketing expenses and more humble service revenues. Although T-Mobile’s service revenues and margins have improved over the last few quarters, Sprint is supposed to face downward pressure in the near future based on its declining postpaid subscriber base and heightened competition.

In 2013, T-Mobile assumed control of MetroPCS and Sprint assumed control of Clearwire, after which AT&T closed its acquisition of Leap Wireless in 2014. Also, Cincinnati Bell announced its intention to slip out of the wireless business, and no longer exists on this list. Finally, Shentel has been added to this list as nTelos exits its Eastern markets.

While the fourth-quarter reporting period comes to a close, it’s time to start analyzing the information to spot out the carriers that slipped and those which managed to get ahead.