Upcoming AT&T iPhone 7 price promotion blitz leads to T-Mobile downgrade

Upcoming AT&T iPhone 7 price promotion blitz leads to T-Mobile downgrade
It seems that the Uncarrier crusade that T-Mobile launched not long ago, and which made AT&T and the others bleed both subscribers and revenue, could be losing steam in the next few months, at least that's what the analysts from Nomura Securities think. According to Jeffrey Kvaal from Nomura, T-Mobile's stock should be downgraded to neutral outlook, and Kvaal even set a new 44 price target on T-Mobile, from his current 46. Nomura's previous rating had the stock set to "buy".

The reasons outlined in the memo are not something that T-Mobile is doing or not, but rather the rumored AT&T promotional onslaught for the iPhone 7 that is allegedly coming down the marketing pipe. "We expect the iPhone 7 launch to return promotional intensity and phone upgrade rates to second-half 2015 levels," said Kvaal. "AT&T may also become a shade more competitive. We expect T-Mo's share of industry net adds to fall (as it did in second-half 2014) and thus limit upside to estimates." 

T-Mobile's shares fell nearly 4% on Friday, but it's not clear how much of this slump was the result of Nomura's outlook downgrade from "buy" to "neutral," and how much due to the markets' kneejerk reaction to the Brexit vote. In any case, it seems that carriers might jump back into the subsidies and promotions game once the iPhone 7 is released, which may benefit us users in the end.

source: The Street


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5 Comments

1. fyah_king unregistered

All that because of an iphone? Lol

3. Finalflash

Posts: 4063; Member since: Jul 23, 2013

There is this big hope from wall street that Apple will come back swinging because people buy iPhones not because they're good phones, but because they're Apple products. Even though rumors are pointing to the most disappointing iPhone release in a decade, even Apple is ordering 75 million phones because they think its "upgrade" time for the iPhone 6 crowd and they have no where else to go but iPhone 7 (or 6ss whatever it is called). This will be an interesting year. If people buy the iPhone 6ss in droves, then you can rest assured that Apple will remain dominant because their flock is sheep is ready at all time. If not, then the industry might get a kick in the nuts it needs to get its act together.

4. Acdc1a

Posts: 473; Member since: Jan 21, 2016

What's worse is they assume that people are shopping phone price while ignoring the price of the plans.

2. Xkoiul

Posts: 36; Member since: Dec 16, 2015

looking forward to

5. WillieFDiaz

Posts: 127; Member since: Dec 22, 2010

This is stupid. T-Mobile's stock has dropped a bit because ALL FINANCIAL BANKS are being hit, for one. Second, the largest telecom's in Europe Voda and Deutsche Telekom are taking huge hits as they are multinational EU-UK companies that will have to restructure their business ventures. And who's the parent and majority stockholder of TMUS? Deutsche Telekom. So yeah, naturally the stock will take a hit, and be downgraded to Neutral. This is not because of an iPhone specifically, however, if TMUS can't get the necessary means to pull off a huge "break even" promotion that AT&T might be able to, then yeah, there might be some issues with Uncarrier movement - but again, we are talking about a $33 Billion company (TMUS) vs $230 Billion company (AT&T) - and in all honesty, T-Mobile is killing AT&T for its size.

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