67 WALL STREET, New York - January 25, 2012 - The Wall Street Transcript has just published its Wireless Communications & Telecom Report offering a timely review of the sector to serious investors and industry executives. This Wireless Communications & Telecom report contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: 4G LTE and 3G Infrastructure Upgrades - Wireless Carriers Compete for Spectrum - Smartphone Operating Systems - Emerging Markets Growth Shifts to Data ARPU
Companies include: TriQuint Semiconductor (TQNT); U.S. Cellular (USM); AT&Ts (T); America Movil (AMX); Apple (AAPL); Atmel (ATML); Boingo (WIFI); Broadcast International (BCST); Broadcom (BRCM); Cavium (CAVM); CenturyTel (CTL); Cincinnati Bell (CBB); Cisco (CSCO); ClearOne (CLRO); Clearwire (CLWR); DISH (DISH) and many more.
In the following brief excerpt from the Wireless Communications & Telecom report, expert analysts discuss the outlook for the sector and for investors.
Jonathan Chaplin joined Credit Suisse in June 2009 as Senior Analyst covering the telecommunications services sector. Mr. Chaplin has been recognized as Best on The Street among telecom Analysts by The Wall Street Journal, second for stockpicking among telecom Analysts by Forbes magazine and as a leading stockpicker among Analysts covering all industries by Institutional Investor magazine. In addition, he was named as a runnerup in the Institutional Investor All-America Research team rankings. Before joining Credit Suisse, Mr. Chaplin was a Director and Senior Analyst covering the telecommunications, cable and DBS sectors at JPMorgan. Before joining equity research, Mr. Chaplin was an Investment Banker in the telecom media and technology group and the mergers and acquisitions group at JPMorgan. In addition to investment banking and equity research experience, he has direct industry experience consulting to telecommunications companies. Mr. Chaplin also started and ran several entrepreneurial ventures, including a magazine and two restaurants. Mr. Chaplin holds a B.A. and an LLB, J.D. equivalent, from the University of Cape Town.
TWST: What types of investors should be looking at this space right now?
Mr. Chaplin: Value investors and yield investors for the most part. Verizon will appeal to a broader range of investors. It's got a much more sort of growth, GARP, momentum following than any of the other names in the group.
TWST: Are any of these players looking at expanding outside of the U.S. into international markets?
Mr. Chaplin: AT&T (T) and Verizon (VZ) constantly look at assets internationally, but they haven't done any significant acquisitions for a while. They're always looking at acquisitions that could potentially increase the reach of their enterprise business or the depth of their enterprise business in a market that they're already in.
AT&T has looked at wireless opportunities internationally. They've got a tremendous position in the U.S. If they can export that scale advantage they have, they would. But neither of them have found anything particularly compelling in the last several years.
TWST: The AT&T/T-Mobile deal was a large potential merger that didn't go through. Are we going to see mergers in the space in the near term?
Mr. Chaplin: I think this is a consolidating space. It's a space that urgently needs consolidation. So I think we're far from done. I think in 2012 we're going to see mergers and consolidation, and we are going to continue to see a significant number of transactions over the course of the next couple of years.
TWST: Is the consolidation going to be among the carriers or will it include nontraditional wireless companies, such as the cable companies?
Mr. Chaplin: There are two consolidation themes. One of them is improving the market structure in wireless. The AT&T/T-Mobile deal didn't happen, but maybe a Sprint/T-Mobile deal could. That probably has to wait a year or two before it could happen because Sprint has got an awful lot on their plate at the moment. But at some point, that's a deal that makes a tremendous amount of sense.
In the meantime, you could see those companies start to consolidate networks and capture some of the benefits of consolidation without an actual merger. I think you'll see a lot of partnering and potentially a consolidation transaction around Clearwire.
I think there is a decent prospect that DISH will be acquired. So those are all transactions in and around the wireless space, either acquisitions to get access to more spectrum or mergers or acquisitions or partnerships that improve the industry structure.
The one remaining theme within wireless is a cleanup of the smaller second- and third-tier carriers. For example, Leap (LEAP) and MetroPCS (PCS) should have been put together years ago. That's a transaction that could happen. Both of them could be acquired by one of the smaller carriers like T-Mobile or Sprint. U.S. Cellular (USM) is another carrier that should have been consolidated away years and years ago and never has. Cincinnati Bell (CBB) has a wireless business that should have been consolidated away. There are still tremendous opportunities for consolidation in the wireless space.
The other area of consolidation is in wireline. You've got too many big national networks out there that don't have enough scale that need to be put together. Sprint has got one. Level 3 (LVLT), Global Crossing have two. They're in the process of being consolidated. Qwest (CTQ), CenturyTel (CTL) have one. Verizon has one. AT&T has one. Then there are a bunch of smaller carriers like Time Warner Telecom (TWTC) and a few others that all have more or less nationwide networks.
Then the carriers with big nationwide networks need a deeper footprint within metro markets. So there are opportunities for consolidation between those types of companies as well.
The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This Wireless Communications & Telecom report is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.
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