Wall Street Transcript Interview with Philip Cusick, Managing Director at J.P. Morgan: More Device and Revenue Growth to be Driven by Data Usage over Next Few Years

Wall Street Transcript

67 WALL STREET, New York - November 14, 2012 - The Wall Street Transcript has just published its Entertainment, Toys and Games Report offering a timely review of the sector to serious investors and industry executives. This special feature 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: Cable Subscription Rates - International Paid Television Growth - Digital Advertisement Trends - Mobile Device Gaming Prospects - Content Quality

Companies include: AT&T, Inc. (T), Verizon Communications Inc. (VZ), Time Warner Cable Inc. (TWC), Comcast Corporation (CMCSA), DIRECTV Group, Inc. (DTV), American Tower Corp. (AMT), Centurytel, Inc. (CTL), Frontier Communications Corpor (FTR), Windstream Corporation (WIN), Sprint Nextel Corp. (S), Dish Network Corp. (DISH), Clearwire Corporation (CLWR), Telephone & Data Systems Inc. (TDS), Netflix, Inc. (NFLX), Amazon.com Inc. (AMZN), SBA Communications Corp. (SBAC) and many others.

In the following excerpt from the Entertainment, Toys and Games Report, an expert analyst discusses the outlook for the entertainment segment of the telecommunications sector for investors:

TWST: Would you begin with a brief introduction to your coverage, including some of the specific names you follow?

Mr. Cusick: We cover sort of a telecom and cable core. So AT&T (T), Verizon (VZ), Time Warner Cable (TWC), Comcast (CMCSA) and DIRECTV (DTV) are big-cap names. American Tower (AMT) is the biggest among the tower companies, and we cover those as well. And then we cover some more rural companies like CenturyLink (CTL), Frontier (FTR) and Windstream (WIN). So it's companies that provide video, broadband or voice solutions or the companies that support them on the tower side nationwide.

There's a lot that's going on in the space on the wireless side. You've got a market that's essentially saturated on the voice side, but smartphones are ramping up and driving higher spending across the board. You've also got tablets that people are starting to come in and use more often - not only use more often, but also starting to create an environment where it's much easier and cheaper to activate that tablet on a wireless carrier that used to cost $25 to $30, and now it costs $10 for a tablet to share your voice or your wireless data package.

On the wireline side, you've got perpetual declines in voice usage. Broadband continues to go higher though in terms of penetration today. About 70% of the homes in the U.S. pay for broadband. Most of the incremental growth in broadband has been captured by the cable companies rather than the attritional wireless or wired voice companies. And then there's video, which the number of video-paying homes in the U.S. just continues to rise. And although the cable companies have seen negative subscriber growth for a long time, that's been much more driven by legacy telcos, like AT&T and Verizon, coming in and taking share than in the so-called cord-cutting sort of trend that's out there.

TWST: Of the subsegments you cover - telecom, cable, satellite and towers - about which are you most bullish at the moment and why?

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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