updated 07:50 am EDT, Mon March 21, 2011
ATT and T-Mobile conference call coverage
AT&T and T-Mobile held a conference call to discuss their merger plans unveiled yesterday. The call included both boilerplate details as well as new insights into the 4G rollout and how phones would work. Check in starting from 8AM Eastern for updates, which we'll post below as they become relevant.
9:15AM: Q&A is over. Reiterates how they believe it's good for the country and the President's/FCC's goals.
9:12AM: Transitioning customers on 1,700MHz 3G phones off to 850/1,900MHz. Concerns about capital expenditures: the spike in spending on the network in the past two years has gone up (i.e. iPhone effect). Ramp capital spending for the integration, but synergies are already factored in. Equipment re-use. It's already been factored in.
9:07AM: Mostly touching on existing terms. Believed the assets were good at T-Mobile even if short-term performance was low. Noting the CWA union has approved of the deal so far.
9:00AM: No changes in expectation of using 700MHz spectrum for LTE; used early on. 1,700MHz is a nice compliment for outside of metro areas, where AT&T doesn't have as much spectrum. Contiguous 20MHz of spectrum. Still committed to getting Qualcomm spectrum, although that's further out.
8:56AM: Competition worries: worried about shrinking from 4 top carriers to 3. Are you prepared to float price caps, etc.? Sidesteps concerns about real competition for major competitors and repeats the arguments including smaller carriers.
8:53AM: Anything you can do, like roaming, to bring benefits earlier? No: we're still competitors until the merger is approved. LTE still on track for some markets this year [mid-year]. Expect to pick up about 15% of rural America as the LTE network finishes in 2013.
8:51AM: Q&A. Talking earnings per share, T-Mobile's pricing and brand [fears it would be hurt by AT&T]. On T-Mobile: best spectrum with the most efficiency. Lowest cost per megabyte. Great value.
8:48AM: Lindner sums up. He believes the value exceeds the purchase price. Casts AT&T/Cingular as a "very successful" integration that portended the future. Noting shareholders still get their dividend.
8:44AM: Cellular revenue would jump to $80 billion. Network-related costs in the first three years. $2 billion in capital expenditures. Synergies would hit $3 billion in year three. Cut redundant cell sites, improve revenue per person, consolidate call centers and offices. Reduce future outlays for spectrum.
8:42AM: Lindner talking finances. T-Mobile can't sell shares in a certain period, conditions if it goes below 5% stake. No debt in this transaction.
8:40AM: Talks about explosive growth of non-phone devices. Tablets, e-readers; graph below.
8:39AM: AT&T would bring T-Mobile ARPU [average revenue per user] up to its level. 65% of AT&T customers are smartphones. Churn improves through coverage, Wi-Fi, rollover minute "stickiness," device lineup "second to none." Churn was cut by nearly half after the previous AT&T merger seven years ago. Retail store rationalization, billing consolidation, etc. to come, and savings through "natural attrition."
8:36AM: Ralph de la Vega up. He's familiar with integration (like Cingular). Will improve voice and data; opportunity to grown ARPU and churn. Margin opportunity. "Incredible opportunities" for new services with LTE. World-class network experience. Fast dividends for network quality. Both HSPA+ and LTE for a more consistent experience over the next several years [dig at Verizon's EVDO to LTE jump].
Rollover minutes and the like would carry over.
8:34AM: Benefits of reduced operating costs, take advantage of automation, fewer roaming payments. Ready the day it closes to make cost savings.
8:33AM: Integration benefits should take place for some within a year of closing, and for all within two. Benefits allegedly both for the largest and smallest businesses. Improves global solutions, improves "connected device" capability.
8:30AM: Merging 2G and 3G networks. Designate sites they plan to keep; immediately dual-banded for AT&T and T-Mobile. Open roaming on both networks. T-Mobile customers will get access to the spectrum and the Wi-Fi network. Consolidate 3G into the 1,900MHz band to free up AWS (1,700MHz) for 4G. Fiber backhaul deployment to continue. AT&T LTE still launching mid-year.
8:27AM: Noting that the capacity could go up 25-45%. Dense grid much better first step for indoor coverage. Helps address clustering at events. LTE will deliver efficiencies, but that migration will take several years. Identifying and getting spectrum can take a decade in some cases. Users are accelerating their expectations.
8:24AM: John Stankey up. Mobile broadband is the critical enabling technology for content, app, cloud service providers. From network ops, this is exciting, but also a bit humbling. At the front end of this curve. Demands will be intense in the future. Optimal combination. Highly complimentary assets. Same global technology path (GSM/HSPA+). Lets us plan with more certainty.
Repeats claims about LTE expansion and capacity.
8:22AM: Notes that carrier mergers from 1999 on actually dropped prices. Company synergies actually improved prices. Claims the US market is one of the most competitive industries, citing "strong competitive presence" from Cricket, MetroPCS, rural carriers [note: not entirely true]. Recapping choice of at least 5 carriers in 18 of 20 markets. Competition is "only increasing," referring to Clearwire and LightSquared [which isn't up yet].
8:18AM: More spectrum is in the public interest. Impending spectrum shortage [note: doubts exist over this] would make this valuable. T-Mobile has no spectrum to build out an LTE network. "Natural fit" for the networks. More capacity and output almost immediately. Improve voice and data services in the public interest. Achieve FCC policy for spectrum. Recap: 95% of population would get LTE, including rural. Billions of investment in the US.
8:15AM: General Counsel Wayne Watts up. Why do we think we can do this? Experience with the regulatory process. Deep analysis. Regulators will "focus on the facts." Won't be presumptuous about every issue, but we considered every aspect. Respect the process. Have the obligation to bring forward the facts; "we accept that burden."
8:12AM: Promise to work "diligently" with the FCC and DOJ. We're at a point where we have to work differently. Reiterating beliefs about the data use spike: tablets and mobile video. Believes data volumes will grow 8-10X. Use will go up "several powers." Whenever we increase speeds or access to content, usage jumps. Doing both now at the exact same time.
Everything in your home, all your personal data will be wirelessly connected. First and foremost: spectrum. Dense network, sustained development.
8:08AM: Conference call starts. Randall Stephenson, General Counsel Watts, John Stankey, Ralph de la Vega, CFO Rick Lindner up, followed by a Q&A.
Recapping beliefs of what the merger would do: infrastructure would be a "competitive advantage" for the US as a whole. LTE expansion, talking about how it's invested more than anyone. Leading the world in mobile broadband subscribers and smartphone users. Only carrier with a unionized workforce.
7:52AM: Waiting for the call to start. We won't be surprised if it starts slightly late, as is often the case.