Market Overview

Guggenheim Underwhelmed By T-Mobile's New TV Service Plan

Share:
Guggenheim Underwhelmed By T-Mobile's New TV Service Plan

T-Mobile US Inc (NASDAQ: TMUS) unveiled a part of its new strategy in the cable TV industry Wednesday, with the service scheduled to launch April 14 in eight markets.

The latest announcement — which comes in the wake of Viacom (NASDAQ: VIA)'s content agreement — is little differentiated from the many offers available in the market and comes with a “synthetically bundled” price that is much higher than what is charged by telcos and MSOs, according to Guggenheim Securities.

The Analyst

Mike McCormack maintains a Buy rating on T-Mobile.

The Thesis

While it’s probably too early to draw significant inferences into T-Mobile's longer-term ambitions, the recently announced cable plan is uncharacteristic for the "uncarrier" and most unexciting, McCormack said in a Wednesday note. 

Consumers are going asset-light, which translates to significant CPE cost savings for PayTV providers, the analyst said. Against this backdrop, it’s surprising to see T-Mobile aiming to compete in the “thin-client” battle with its Layer3 TV division, he said. 

Consumers already have extensive choices, and it may have been better for T-Mobile to focus on an app-only service, McCormack said. The offering is undifferentiated in a crowded market, the analyst said, adding that the synthetic bundle price point is unlikely to attract significant interest.

While the launch begins in eight markets, T-Mobile plans to offer its streaming service nationwide in the back half of 2019.

Price Action

T-Mobile shares were trading up 0.87 percent at $72.79 at the time of publication Thursday. 

Related Links:
Guggenheim: T-Mobile Home Broadband Aimed At Boosting Sprint Merger, Not A Threat To Cable
A Preview Of T-Mobile's Q4 Earnings

Photo courtesy of T-Mobile. 

Latest Ratings for TMUS

DateFirmActionFromTo
Aug 2020ScotiaBankInitiates Coverage OnSector Outperform
Aug 2020Raymond JamesMaintainsOutperform
Aug 2020Morgan StanleyMaintainsOverweight

View More Analyst Ratings for TMUS
View the Latest Analyst Ratings

 

Related Articles (TMUS)

View Comments and Join the Discussion!

Posted-In: Guggenheim Mike McCormackAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga

Latest Ratings

StockFirmActionPT
JBLRBC CapitalMaintains38.0
COSTRBC CapitalMaintains412.0
COSTMKM PartnersMaintains325.0
NOWStifelMaintains500.0
MTNTruist SecuritiesMaintains243.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com