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2014 Q2 Carrier Earnings Analysis

2014 Q2 Carrier Earnings Analysis

Carrier reports by Cannon Group

August 2014

Download the PDF Version

 

As part of our ongoing vendor knowledge process, Cannon Group reviews Q2 earnings in 2014 for AT&T, Sprint, T-Mobile and Verizon.

We use this information to get a macro view of carrier financial health. In addition, when working and negotiating on behalf of our clients, it helps us to understand the carriers’ positioning, as well as the pressures that both carrier and account teams face with regards to margins and revenue.

 

AT&T Sprint T-Mobile Verizon
Total Revenue Growth (y/y) 1.6%
(Down from 3.6)
1.0%
(Up from 0.9)
8.0%
(Dn from 15.3)
5.7%
(Up from 4.8)
Wireline Margins 26.9%
(Dn from 29.5)
4.7%
(Up from 1.6)
N/a 23.2%
(Up from 22.3)
Wireless Margins 42.6%
(Dn from 45.4)
25.3%
(From 25.3)
26.5%
(Up from 20.4)
50.3%
(Dn from 52.1)
Wireline Capital Expense ($MM) 2,516
(Dn from 2,689)
66
(Dn from 72)
N/a 1,345
(Dn from 1,385)
Wireless Capital Expense ($MM) 3,480
(Up from 3,082)
1,276
(Up from 930)
940
(Dn from 947)
2,771
(Up from 2,554)
*Based on reports by Morgan Stanley

 

A few highlights from the earnings reports:

AT&T

Sprint

T-Mobile

  • As VoLTE emerges in the U.S. T-Mobile covered 107M POPs at the end of 2Q, but the company now covers more than 200M POPs.
  • Regarding subscribers, branded postpaid net adds of 908k (579k phone) were above Morgan Stanley’s expectations, while postpaid churn of ~1.5% was roughly in-line with expectations.
  • T-Mobile’s has maintained its position as the carrier with the fastest download speeds at 19.3 Mbps (see: The State of LTE in the U.S.). Compare that to Verizon at 16.8, AT&T at 13.8, and Sprint at 9.7 Mbps. However, T-Mobile has a ways to go in terms of network coverage (see: Comparing Network Coverage in 2014).
  • Regarding LTE, T-Mobile (along with Sprint) has made leaps and bounds (see: T-Mobile is Next in Line to Expand LTE). Currently, T-Mobile now covers more than 233M POPs in 325 metro areas – furthermore, T-Mobile now believes that it could cover more than 280M POPs with 4G / LTE by mid-2015.

Verizon

  • This year in Q2, Verizon achieved its highest consolidated revenue growth rate in six quarters, with better results from wireless and wireline (especially thanks to equipment revenues and enterprise, respectively).
  • This quarter also marked the first quarterly year-over-year increase in total wireline revenues in more than seven years, with strength in consumer and better results in enterprise.
  • As Verizon Aims to Expand 4G LTE with Q2 Spend we’ll see where Verizon falls amid the carriers all striving to be the best in LTE network capacity.

 
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Download the full Morgan Stanley reports below:


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