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Posted
Apr 03 2008, 11:45 AM
by
Douglas McIntyre
Filed under: Apple, Comcast, Ford, DirecTV, Verizon, Sirius, XM Satellite Radio, AT&T, Time Warner Cable, Toyota, GM, Clear Channel, Dish Network
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When the Justice Department cleared the merger of Sirius with XM Satellite there was anticipation that once the deal got done the shares of both companies would go up. A year ago, the combination was viewed as a dream deal.
If anything, the shares have dropped. Sirius is below $3 and XM is below $13. The market began to realize that the year wasted on getting government approval was a year the companies need to stay competitive. XM has over $1 billion in debt. Refinancing it in the current market would be nearly impossible. Selling shares would lead to extremely large dilution. As we recently noted, Goldman Sachs even put Sirius on its "Conviction Sell List" with a price target of $2.25.
Growth at Sirius has slowed considerably. In the fourth quarter revenue rose only 29% to $250 million. But, for the full year, revenue was up 45%. Subscriber deactivations in the fourth quarter were almost 540,000 compared to 330,000 in the same quarter of 2006. The firm's net loss was $166 million. Long-term debt was almost $1.3 billion.
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Posted
Mar 26 2008, 12:10 PM
by
Kim Peterson
Filed under: Google, Comcast, Time Warner, Sprint, wireless, Intel, Verizon, AT&T, Kim Peterson, Clearwire, WiMax
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Lots of big numbers are being tossed around today in support of WiMax, a wireless technology that can deliver high-speed Internet access over several miles. Clearwire is a leader in developing WiMax, and has been trying to hammer out a partnership with Sprint for months. But working out a deal hasn't been easy, partly because building out WiMax is so expensive and partly because both companies have their own struggles to deal with.
Now, the two biggest U.S. cable companies are stepping in with loads of cash. According to the Wall Street Journal, Comcast and Time Warner are talking about funding a new WiMax company, one that would be run by Sprint and Clearwire. The company would operate a nationwide WiMax network. Comcast is reportedly offering $1 billion and Time Warner is adding $500 million. Bright House Networks, a small cable company, might pony up between $100 million and $200 million.
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Posted
Mar 13 2008, 12:18 PM
by
Kim Peterson
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DirecTV is finally going to offer a video-on-demand service. About time, too. Comcast and other companies are light-years ahead in this area, and on-demand is becoming a required feature for some consumers these days. It's taken DirecTV this long because, as a satellite provider, it broadcasts a one-way signal. The technology doesn't allow for the two-way conversation that an interactive service like on-demand uses. DirecTV is going to work around this using broadband connections and digital video recorder (DVR) technology, according to the WSJ. DirecTV shares are up nearly 1% on the news today to $25.21. The project is expected to launch in the second quarter.
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Posted
Feb 20 2008, 08:38 AM
by
Douglas McIntyre
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Verizon has been the ruler of the walk, but that has changed. Yesterday, the shares hit a 52-week low at $35.19.
The large run-up in Verizon's stock last year was based on two things. The first was that its new fiber-to-the-home TV and broadband service was picking up customers from cable companies like Comcast. That sent Comcast shares to multi-year lows. Comcast's latest earnings showed that the impact of Verizon's initiative was less than expected. More recently the phone company said that it could not get HD set-top boxes to many of its new fiber customers. Motorola had fallen behind in making them. All of a sudden, the $23 billion that Verizon put into the fiber project did not look quite so good.
Then the market was hit with news of a cellular price war between Verizon Wireless and AT&T. T-Mobile got in on the action just or fun. Cellular revenue is what has driven Verizon's revenue and operating income over the last several years as it has lost landline business to VoIP.
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Posted
Jan 08 2008, 12:19 PM
by
Kim Peterson
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The Blu-ray and HD-DVD folks can bicker all they want about whose next-generation format is going to win. Comcast and other companies are laying plans now that could make that battle irrelevant. Comcast today announced "Project Infinity," a grandiose name for a plan to make 1,000 high-def movies and TV shows available each month by the end of this year. By 2009, Comcast wants to offer 6,000 movies on demand -- half in HD. Comcast will also begin rolling out ultra-high-speed Internet that allegedly allows you to download a high-def copy of a movie like "Batman Begins" in four minutes. I say "allegedly" because downloads in real life never seem to happen as fast as promised.
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Posted
Dec 12 2007, 04:13 AM
by
Kim Peterson
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After years of paying Comcast at least $100 a month for cable and Internet, I can't help but cheer AT&T on these days. The company is going after cable in a big way by aggressively expanding its U-verse digital television service. AT&T said yesterday it wants to have signed up 1 million video customers by the end of next year. And by 2010, the company said, the service will be available to 30 million customers.
Getting there isn't cheap: AT&T is planning to spend about $5 billion this year and next to deploy U-verse, which could cut into 2008 earnings by as much as 14 cents a share. It wants to up its weekly installs from 10,000 to 40,000 by next year.
U-verse's TV signal comes over Internet Protocol through broadband, and you don't need a traditional voice line to use it. The service's advantages include fast channel changing, the ability to record four shows at the same time on a DVR, and a picture-in-picture tool that lets you watch one channel and browse another. You can only watch one HD channel at a time, but AT&T said it will change that in the future.
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Posted
Nov 29 2007, 03:01 AM
by
Kim Peterson
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Poor TiVo. The company pioneers the DVR business only to watch the market being taken over by cable and satellite. It's hard to sell your DVR to people when Comcast is practically forcing a DVR set-top box into their hands.
Luckily, TiVo is working out some deals that might keep it in business, and some of them were announced this week.
First, NBC agreed to place TiVo "tags" in its commercials, so that viewers can click the TiVo remote during an ad to get more information about the product. And to counter the legendary TiVo ad-skippers, NBC signed up for a TiVo service that measures audience viewing behavior on a second-by-second basis. Basically, the network is going to test advertising campaigns to see which, if any, can hold on to its audience during commercials. Good luck -- that fast forward button is a very good thing indeed.
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Posted
Sep 26 2007, 12:44 PM
by
Kim Peterson
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Tough week for Vonage, the one-time Internet calling darling that has more courtroom drama than a season of "Law & Order." But I think the company could be an attractive acquisition target.
 Today an appeals court upheld a verdict against Vonage in a patent case involving Verizon. Now the courts will recalculate how much money Vonage should pay (the previous total was $58 million plus 5.5 percent royalties on future sales). Trading was halted briefly on the stock, and its share price fell 26 percent to 96 cents.
This follows yesterday's news that a jury found Vonage guilty of infringing patents owned by Sprint Nextel. Vonage was ordered to pay nearly $70 million, which caused the stock price to plummet 34 percent. Woe to the investors that got in at the company's $17 IPO price
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