Communications

New Vivendi band member requires artistic vision

14 Feb 2019

Vincent Bolloré’s group may sell half of music label Universal. The returns are low at a mooted $40 bln price tag. That favours buyers with a strategic interest in controlling music rights over financial investors. Tencent, Apple and Liberty Media are the most likely auditionees.

Nokia valuation lacks Huawei boost

31 Jan 2019

Like Sweden’s Ericsson, the Finnish telecom-kit maker will gain if the Chinese rival is shut out of more markets. Yet Nokia’s valuation is lower than for much of last year and CEO Rajeev Suri expects a so-so 2019. A European ban on Huawei would change that.

Vodafone’s good signals are jammed by interference

25 Jan 2019

The $50 billion telco’s revenue is shrinking in Europe and slowing elsewhere. On top of that, 5G spectrum looks pricey, while its acquisition of Liberty Global assets faces regulatory risks. CEO Nick Read can only expect credit for cost cuts after some of these worries disperse.

AT&T has a satellite-TV reception problem

24 Oct 2018

The U.S. telecom operator splashed out nearly $50 bln for DirecTV in 2015. Since then, video profitability has eroded and efforts to get customers to take a new streaming product have stalled. The challenges may have implications for AT&T’s latest $85 bln addition, Time Warner.

Verizon’s Oath is breaking its promises

23 Oct 2018

The renamed Yahoo-AOL combo saw quarterly revenue drop 7 pct despite previously projecting growth. Its $227 bln parent Verizon spent relatively little to buy the dying internet firms. But Oath’s decline shows how daft it was to try marrying the telecom’s data with advertising.

$34 bln U.S. defense deal covers all bases but two

15 Oct 2018

The planned combination of Harris and L3 is a real merger of more-or-less equals with little overlap and CEO succession set in advance. The U.S. government even comes off better. Yet for most stakeholders to win, someone must lose. In this case, it’s suppliers and employees.

Robocall infestation demands robot solution

20 Sep 2018

Scam calls may make up nearly half U.S. traffic next year, data suggests, up from under 4 pct last year. Society bears the costs in wasted time and swindles. The experience with email shows engineering will eventually provide more consistent relief than laws or fines.

Telstra’s slashing falls short of a full strategy

20 Jun 2018

The $26 bln Australian telco will cut one in four jobs, sell assets and put infrastructure in a standalone unit that could raise fresh capital. CEO Andy Penn’s austerity beats past scattergun attempts at reinvention. But there is no clear growth plan to get investors fired up.

AT&T gets law right this time, but could regret it

12 Jun 2018

A judge cleared the telco’s $85 bln Time Warner purchase in a clean ruling against U.S. regulators who tried to block it. That’s a victory for CEO Randall Stephenson, but it could come with a winner’s curse. AT&T is new to the media business and has barely any room to cut costs.

Verizon’s new boss will unscramble M&A signals

8 Jun 2018

Outgoing CEO Lowell McAdam sent mixed messages on whether the U.S. telecom would buy a big media company. Replacing him with the chief tech guy suggests Verizon is more interested in growing its reach than its content. A bid for $15 bln satellite operator Dish could follow.

Apple is bumping up against iPhone limits

1 May 2018

The smartphone market is mature, and soft demand for the $1,000-plus X model suggests the company led by Tim Cook has maxed out on pricing. Quarterly results show Apple can sell more accessories and services. But the lack of a hot product could start to test investors’ patience.

Apple may double capital returned to investors

30 Apr 2018

Memories of nearly going bankrupt scared the $840 bln firm into keeping an absurdly conservative balance sheet for two decades. Returning about $50 bln to investors annually shows progress in overcoming the trauma. Eliminating over $160 bln of net cash could be next.

T-Mobile US avoids risk that gave it new life

30 Apr 2018

The U.S. telco is offering no reverse break fee to Sprint if watchdogs nix its $26 bln deal. Boss John Legere knows better. His success shaking up his rivals came partly thanks to a $6 bln payout from AT&T. Sprint’s willingness to forgo the insurance underlines its weak position.

Ericsson rebirth as much made in China as Sweden

20 Apr 2018

The Swedish telecom-kit maker’s shares soared 15 pct after quicker-than-expected cost cuts. That adds credibility to boss Borje Ekholm’s previously unimpressive rescue effort. An even bigger boost could come from anti-Chinese sentiment harming rivals like Huawei and ZTE.

Market jitters accentuate M&A regulatory risk

26 Mar 2018

Dealmaking sprees are prone to extinction events. Market panics erode the value of buyers’ stock, make bankers reluctant to lend, and change the outlook violently. Recent tumult doesn’t yet qualify, but it makes it harder to overlook deals that push the regulatory limits.

Guest View: Why the government will lose to AT&T

23 Mar 2018

The U.S. Department of Justice is tuning in to old channels in its case against the telephone company's Time Warner deal, argues a former Federal Communications Commission chief economist. The Trump administration has crocheted a quilt lacking awareness of historical pattern.

Qualcomm needs an intermediator more than a buyer

16 Mar 2018

The $90 bln chipmaker’s ex-chairman Paul Jacobs’ improbable buyout idea would need lots of help. The real key to boosting Qualcomm’s value is mending its rift with Apple. While Jacobs isn’t the man for that job, deep-pocketed SoftBank founder Masayoshi Son theoretically could be.

China and U.S. trade places in 5G space race

14 Mar 2018

America is nudging Qualcomm into the role of a national tech champion. China is a potent rival, and has pushed home champs Huawei and ZTE into global leaders. The trouble is that Beijing is expert at bending firms to its will, while Washington is grappling to define its new role.

U.S. simplifies Qualcomm decision by complex means

5 Mar 2018

The foreign-investment watchdog has told the chipmaker to delay a vote that could give board control to nominees of Singapore-based Broadcom, which wants to buy its rival for $117 bln. It’s a surprising twist in a tangled situation. But it removes a big unknown from the equation.

Broadcom’s new Qualcomm bid both petty and smart

21 Feb 2018

The chipmaker is reducing its offer per share by 4 pct if its rival completes its sweetened acquisition of NXP. Sure, Broadcom would still be paying more in total. But the $4 bln price cut looks mean and lowers the odds the two sides can ever plug in a friendly transaction.