The Sunday Brief

Connecting technology, telecommunications, and the internet

Value Creation – Long-term charts, Fab Five vs. Telco Top Five (June 21)

by | Jun 22, 2024 | TSB

This was a quiet week for the Fab Five (+$33 billion) and the Telco Top Five (+$15 billion). No WWDC news, and Nvidia’s wild ride was more of a headline than anything going on with the Fab Five.

One interesting thing to note was the breadth of Telco Top Five gains. Every stock was up, signaling confidence in the sector yet not a lot of conviction for one stock over another. According to their June 13th SEC 13D/A filing (which was released after the last Interim Brief) , Deutsche Telekom still owns 57% of total T-Mobile USA shares outstanding, and their recent sales through June 18th had a fractional impact. Our belief is that this will continue to overhang T-Mobile USA shares and will disproportionately benefit Deutsche Telekom shareholders.

While there was not a lot of stock price movement, there were quite a few news items. AT&T announced (here) that they would be increasing the price of legacy Unlimited plans by $10/ month for single line subscribers and $20/ month for multi-line accounts. They have increased their premium data allocations to 75 and 100 GB respectively for their two tiers of legacy plans, while increasing their allocation of Hotspot data for each tier to 30 or 60 GB.

AT&T is also raising prices by $5/ month for fiber if you don’t use a debit card or your bank account as a form of automatic payment (the autopay discount increases to $10 only if a bank account or a debit card is used). This likely corresponds to their credit card processing fee changes.

Per this CNET report, Spectrum is going to be raising prices in July by $3/ month on legacy Internet services (post-promotion, which should take the price to $82.99 before taxes and fees for the up to 300 Mbps rate. On a percentage basis, the change is close to the overall CPI). They also raised prices by $3/ month on some Spectrum TV Select packages. While the TV price increase is not surprising, the Internet increase seems enough to create a lot of calls to care (and for customers who have options to look around).

We don’t think that this is the end of the price increases (we covered the T-Mobile price increases in last week’s Brief). This does open the door for competitors after Spectrum’s promotional periods have ended.

One final note – in Jim’s new role as CEO of CellSite Solutions, he will be at the INDATEL annual show in Nashville next week and has time to catch up (Wednesday) as your schedule permits.

File is below. 2Q earnings dates are now beginning to trickle in and are included on and “earnings calendar” tab.

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