In this segment from Motley Fool Money, the teamconsiders the state of the wireless business in the U.S.
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No. 1 player Verizon(NYSE: VZ)saw its number of subscribers shrink last quarter, and based on numbers from the past several years, it appears consumers are happily switching to the more competitive services of T-Mobile(NASDAQ: TMUS), and to a lesser degree, Sprint.
A full transcript follows the video.
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This video was recorded on April 21, 2017.
Chris Hill: For the first time ever,Verizonreported a quarterly loss. David,I'm sure there are other things of notein their first quarter report but a loss?
David Kretzmann: Yeah. It was their first-ever quarterlydecline of wireless subscribers. So, they're finally, I think, feeling somepressure fromT-MobileandSprint. ButI think T-Mobile deserves a lot of the credit here.T-Mobile has really been aggressively going after Verizon andAT&T.Since2013, the number of wireless subscribers with T-Mobile has grown from 44 million to over 71 million today. Verizon has 145 million, so they're still in that lead position. ButI think they might be getting a little bit complacent here, and I think there is room for T-Mobile to disrupt Verizon andcontinue to gain some share. Therewas a recent spectrum auction with the FCC,essentially, where companies like Verizon,AT&T, and T-Mobile can bid on that spectrum from the FCC to grow their networks and grow the amount of data they can process and the speeds and so forth. T-Mobile spent nearly $8 billion for 45% of the available spectrum in that auction. AT&T did $900 million.Verizon didn't bid anything, they didn't bid for any of the available spectrum. For me, that signifies it. Maybe Verizon is a little bit complacent here. That leaves a lot of room for T-Mobile to boost the speed and capacity of their network. I like the position that T-Mobile is in. Over the past year,T-Mobile shares are up61%, Verizon down 4%.
Hill: Is there a CEOin the public market that's more entertaining onTwitterthan T-Mobile CEO John Legere? The way he justaggressively trolls,in particular, Verizon?
Kretzmann: Somehow he worked #verHIGHzon into one of his tweets going after Verizon CFO, he said, "Stopgouging your customers andstart doing more for them! Seriously, how #verHIGHzon are you?!?"
Jason Moser: He actually sent that out on 4/20, too, right? April 20th? There you go.
Kretzmann: The man's brilliance just compounds.
Chris Hill has no position in any stocks mentioned. David Kretzmann owns shares of T-Mobile US and Twitter. Jason Moser owns shares of Twitter. The Motley Fool owns shares of and recommends Twitter and Verizon Communications. The Motley Fool recommends T-Mobile US. The Motley Fool has a disclosure policy.