AT&T/T-Mobile/Verizon Satellite JV, Panasonic, and T-Mobile/Sprint Merger Lawsuit

Full Transcript

Don Kellogg 0m10s

Hello, and welcome to the three hundred and sixteenth episode of the week with Roger, conversation between analysts about all things telecom, telecom, media, and technology by Recon Analytics. I'm Don Kellogg, and with me as always is Roger Retner. How are doing, Roger?

Roger Entner 0m22s

I'm great. How are you?

Don Kellogg 0m24s

I'm good. So we've got some more news on the satellite front, specifically around a joint venture. You wanna tell us about it?

Roger Entner 0m32s

Sure. So a couple months ago, just before the Starlink IPO, the three large MNOs in The United States, T Mobile, AT&T, and Verizon, announced a joint venture to harmonize how satellite networks are interacting with ground based networks to standardize that protocol. And the... How can I say? The joint venture was nameless and leaderless.

Roger Entner 1m3s

Now we just had the announcement that the joint venture is no longer leaderless, but it is still nameless.

Don Kellogg 1m10s

Well, it's unofficially called the no Elon club. Right?

Roger Entner 1m13s

Some... Well, no. No. No. They...

Roger Entner 1m15s

They're open for everybody to join. This has to be standardized. And so I think what they want is that it is an open standard for everybody rather than a Elon standard. Because I think everybody saw what happened with car chargers, where every EV company had their own standard, which is bad, led to fragmentation. And because of the great success of Tesla and the hard work of Elon Musk, you have to give him credit.

Roger Entner 1m45s

And putting out all these charging stations and everything, the Tesla charger is now the standard. So they have seen this movie before. And here in satellite, Elon Musk is miles ahead of everybody else. Kudos to him. But nobody wants to live in Elon's world.

Roger Entner 2m4s

And so they want to have a world where there's an open standard. And so Paul Roth, former AT&T singular executive, very good executive, he ran for a long time their distribution. He was a protege of Ed Whitaker. His father also was a senior AT&T executive way back when. So really safe hand, very knowledgeable, very skilled, also knows Washington, where I think he will spend a lot of time, is now running this joint venture on an interim basis.

Roger Entner 2m44s

Now, we don't know if he will be an interim CEO, just like Steve Jobs was an interim CEO or not. But at least now, this joint venture has a senior carrier executive that is trusted and known in the industry. So congratulations to Paul. I know Paul and I have a very high opinion of him. Good man.

Roger Entner 3m8s

Very good man. Nice guy. Too bad he's out of retirement, you know.

Don Kellogg 3m12s

So speaking of nice guys, the next topic we have, there's a lawsuit against Deutsche Telekom. Yeah. And this is some real palace intrigue here.

Roger Entner 3m22s

Oh, it's it's

Don Kellogg 3m23s

It's it's like, get your popcorn

Roger Entner 3m25s

priceless. Right? So it's a lawsuit. And the thing is, nobody in The US is reporting about this. So it's Dinkevich versus Deutsche Telekom, and it's in the Delaware state court.

Roger Entner 3m42s

And to make your life easier, the docket number is 2021 dash 4079 dash PAF. That's the docket number. And I only found out due to our friends from Handelsplat. Philipp Alvarez wrote about it and it's like, it's bonkers. Right?

Roger Entner 4m3s

Because it's like all the things that usually are remaining secrets are being dragged out into the open. Things I didn't know. And it's like Tim Hodges told John Ledger, you are not going to run T Mobile after the merger has concluded.

Don Kellogg 4m22s

The Sprint. Yeah. Yeah. So

Roger Entner 4m23s

like The Sprint.

Don Kellogg 4m24s

So the backdrop on this

Roger Entner 4m25s

didn't know that. Right?

Don Kellogg 4m27s

The backdrop on this is this is like all the inside baseball that was happening during and after the Sprint acquisition.

Roger Entner 4m32s

Yeah. And some of the allegations are pretty hefty, like insider trading. You can read how the politics, how the Game of Thrones gets done, and you read like the internal emails. Like, oh, we have to pressure this person and she has to feel your wrath. If you have a subscription of Handelsblatt, you can read it in German or you can copy and paste it and put it in an AI and it will translate it into English, or you can get the transcripts.

Roger Entner 5m10s

Fascinating, fascinating things. It beats the living daylight out of anything else I've read this year. You know, it's like Ledger writing to Marcelo Claret that he's a money launderer, but that he still likes him. Things like that. If you ever thought that John Ledger was unfiltered, read that.

Roger Entner 5m31s

And you see like how the advisors are talking to the senior executives and all of that stuff. So we leave all of this for other people to report about. But I am like...

Don Kellogg 5m42s

It's worth the time to read it. It's worth... If you're a journalist, it's worth the time to read it. It's pretty wild.

Roger Entner 5m47s

Oh, yes. It is wild. It is wild.

Don Kellogg 5m49s

So keeping on the T Mobile track here, we had another fee increase that happened recently. Right? Regulatory fees are going up on a per line basis by anywhere between 50¢ and a dollar, depending on the type.

Roger Entner 6m2s

But because it's a below the line charge, it does not trigger the

Don Kellogg 6m8s

Price lock.

Roger Entner 6m9s

Price lock.

Don Kellogg 6m10s

Yeah. But sadly, as a customer, you still have to pay it. Right?

Roger Entner 6m13s

Yeah. And it will filter into the wireless CPI. The CPI thing is going to happen. And so the bigger backdrop is the wireless industry has been really good with affordability. The wallet share has gone down, all of these things.

Roger Entner 6m34s

There were price increases a while back. And then I had like a lot of inquiries from financial analysts who all looked at the CPI and were like, oh my god, this went up by 5.9% in that one month. And it's just a one month blip. And what's going on? And I said like, well, these were like the fee increases and like the rerating.

Don Kellogg 6m55s

Plan migrations, yeah, all that stuff.

Roger Entner 6m57s

On the back end of the book by AT&T and T Mobile, Verizon was the main suspect in the past or the main perpetrator in the past. They have not done this anymore. And Dan Schulman has said he's going to get more money from more customers and not from more money from the same customers or fewer customers. And I think that's the right strategy. So they're going play both sides of the book.

Roger Entner 7m21s

I hope it's not going to put the spotlight on affordability that we're already seeing from this White House, and depending on how the midterms go, from one or two houses of Congress when the Democrats win, or if they win, or how that plays out. But both sides are looking at affordability. Telecom, to its credit, has been a lot more measured its price increases. Costs go up, right? And so you have to hand it through.

Roger Entner 7m54s

Telecom has been very responsible.

Don Kellogg 7m57s

My phone bill is a lot more predictable than my gas bill, let's put it that way.

Roger Entner 8m0s

Absolutely, right? Or your egg bill and whatever else is out there, right? I go to the grocery store and I'm like, I didn't buy anything then, this was $80 I'm like, nuts. Like I went to Costco, bought water and two, three more things, and I was at $60 I was like, Jesus. You know, at the other hand, things are getting more expensive, but be careful what you wish for.

Roger Entner 8m25s

If you're getting ahead of yourself, there might be a congressional oversight or White House wrath of White House coming.

Don Kellogg 8m34s

To be honest, prepaid is a stalking horse too, right? I mean, you can save a lot of money by moving to prepaid if you really want.

Roger Entner 8m40s

Oh, absolutely. So there are plenty of alternatives. And then last but not least, I was in New York at the beginning of the week. Panasonic invited me to the Toughbook launch and its thirtieth anniversary. So the Toughbook is this really, really rugged laptop that you can drop and it doesn't break.

Roger Entner 9m4s

You can submerge it in water and it keeps working. Right? It's for engineers, police officers. It fits into that first responder thing. And the neat thing is you can have your brightness on the screen from like two nits so that it doesn't blind you when you're at night in your police cruiser or whatever you do, to like ultra high that if you are controlling a drone in midday sunlight.

Roger Entner 9m33s

So it's like really, really robust. And they launched it for the thirtieth time. It has like WiFi and it has five gs connectivity with AT&T and Verizon. And it's like one of these examples. And we're going to get a lot more in 2027 into things like that.

Roger Entner 9m54s

We have some really cool things in stock where you will see us coming, where we will look at devices a lot harder. And so this is just the first thing. And also shout out to Mike Ng from Goldman who very kindly hosted an investor lunch with me on Tuesday. So that was very nice. Thank you, Mike.

Roger Entner 10m13s

And so we're we're making the rounds.

Don Kellogg 10m15s

Alright. Well, we'll continue to cover all these topics, particularly, I think, the Deutsche Telekom thing. I don't think we've heard the last on that.

Roger Entner 10m23s

No. And... Get out your

Don Kellogg 10m25s

popcorn, folks. It's gonna be good.

Roger Entner 10m26s

Yeah. And we're gonna get a subscription. You have to pay for getting the transcript. So we were, like, downloading the transcripts as they come. It's where you learn all the real things.

Don Kellogg 10m38s

Alright. We'll talk to you next week.

Roger Entner 10m39s

Talk to you next week. Thank you.