© Provided by The Motley Fool Why Verizon Is Betting Big on Prepaid Wireless
- Verizon Gaming Phone
- Verizon Gambling Line
- Verizon Gaming
- Verizon Gaming Headset
- Verizon Gaming Hotspot
- Verizon Gambling Services
Such as exact roulette, gambling establishments feature become an alternative most popular on the web online game also. This game is accessible throughout particular and then multi-line play in addition, of which this right moment approximately patients may include several techniques offered to these when ever acquiring element in. The best online gaming with Verizon Internet Take down the competition with Fios Gigabit Connection – fast, fiber-optic internet that minimizes lag and buffering. Verizon Communications Inc. (NYSE:VZ) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time. LTE Home Internet is home broadband internet service that brings the Verizon 4G LTE network into your residence. It is available in certain areas with 4G LTE network service where there are no other Verizon broadband options (Fios, 5G Home, etc.). Prefer specific roulette, online casino include get the latest preferred on the net video game also. Cafe world is available around singular and additionally multi-line have fun with moreover, this type of best period roughly avid gamers can currently have quite a few alternate options offered to these folks if spending a part in.
Verizon(NYSE: VZ) is betting as much as $7 billion on the prepaid wireless industry. The wireless carrier recently announced its proposed acquisition of TracFone Wireless from America Movil. The deal seems like a smart move by Verizon, as it gives the company millions of new customers at what seems like a reasonable cost. If Big Red can cross-sell these customers postpaid plans or high-speed internet, this will have been a steal.
What happened?
Verizon is spending $3.1 billion in cash and $3.1 billion in stock to acquire TracFone. In addition, Verizon will pay additional $650 million to America Movil, depending on the performance of TracFone. In total, Verizon would be on the hook for $6.9 billion.
The deal will still need to go through regulatory approval, which could be a concern for investors. T-Mobile(NASDAQ: TMUS) already has over 20 million prepaid subscribers, and AT&T(NYSE: T) has about 18 million. However, 4 million existing Verizon prepaid customers, added to 21 million TracFone subscribers, means Verizon will jump into first place in the prepaid market.
Given that Verizon already holds the lead in postpaid subscribers, regulators may be hesitant to have the same company leading in both postpaid and prepaid wireless. TracFone sells prepaid wireless under the TracFone, Straight Talk, and Simple Mobile brands. It's possible that regulators could decide that one of these brands must be spun off or sold. While investors should keep an eye on this, it doesn't present an immediate threat to Verizon's stock.
Popular Searches
Verizon Gaming Phone
TracFone has been buying network capacity from Verizon along with other carriers for its service. This deal puts Verizon in the driver's seat as theoretically TracFone's sole network provider. TracFone should provide a funnel of prepaid customers that Verizon can potentially upsell on 5G service, postpaid plans, high-speed internet, or even Fios TV.
Is TracFone competitive?
Verizon investors looking at the potential benefit of the TracFone acquisition, should first consider if the prepaid wireless carrier is competitive. After all, if TracFone doesn't offer competitive pricing, or offers worse coverage than its peers, this acquisition may not be worth Verizon's time or money. Happily, whether we look at a TracFone plan, Metro prepaid by T-Mobile, or AT&T Prepaid, the companies offer similar plans and pricing.
Aside from the Metro plan by T-Mobile, most prepaid plans offer a data cap to keep costs down. There are other considerations such as smartphone pricing and short-term promotions, but TracFone's 21 million subscribers suggest the company is doing something right. Since TracFone runs its subscriber calls through the largest networks, there are millions of TracFone customers already using the Verizon network. When it comes to network quality, Verizon just won RootMetrics's overall network performance award for the 13th consecutive time. Verizon's reputation for quality service should virtually eliminate concerns about coverage.
Does the deal make sense for Verizon?
With a maximum deal cost of $6.9 billion, divided by 21 million new customers, Verizon's average cost per customer is $328.57. This math seems favorable, given that most of the popular prepaid plans are around $30 to $35 per month, which equates to $360 to $420 per year. These figures suggest a revenue payback period of less than one year.
In addition, investors shouldn't overlook the customer acquisition costs that Verizon avoids with this acquisition. When signing up a new customer, the wireless carrier often pays a subsidy for the device, as well as paying a commission to the store or agent making the sale. In addition, Verizon must foot the marketing costs to get the customer in the door.
Verizon Gambling Line
Across the industry, the estimated cost to acquire a new wireless phone subscriber is at least $350 to $400 . With Verizon getting TracFone customers at $328.57, the company is starting off at a lower cost basis than if it tried to organically win these accounts.
If we look at what TracFone customers could generate in revenue and income at different levels of churn, we get a sense of how this deal could affect Verizon's top and bottom lines. Most prepaid carriers report annual churn of 3% to 4%; TracFone brings in $30 per month or $360 per year in revenue per customer; and Verizon reported a net margin of 15.4% in its most recent quarter:
Churn Factor | TracFone Customers | Total 12-Month Revenue | Implied Net Income |
---|---|---|---|
With 3% Churn | 20.4 million | $7.3 billion | $1.13 billion |
With 4% Churn | 20.2 million | $7.26 billion | $1.12 billion |
Verizon Gaming
(Source: Author's assumptions based on TracFone acquisition and pricing.)
Issuing $3.1 billion of new shares at current prices of about $59, would create 52.5 million new shares -- about 1.2% of Verizon's current 4.14 billion shares -- for a new total share count of 4.19 billion shares.
Verizon Casino xmas party. | Q2 2020 Reported | Q2 2020 Adjusted for TracFone North myrtle beach casino cruises. Suncruz Casinos take you and a lot of others out to international waters to gamble. Black Jack, Poker, slots, 21 and other games are just waiting for you to come and play. You should make reservations as the cruise fills up, especially in the summer! Drinks flow while you are. The Big 'M'Casino boat is South Carolina's newest gambling cruise and offers a fun and spirited gaming atmosphere for the true gambler at heart. Aboard this one hundred eighty-six foot vessel, you will feel the anticipation of the win as you try your hand at the Dice tables, Blackjack tables, Let it. |
---|---|---|
Revenue | $30.4 billion | $32.2 billion |
Net income | $4.8 billion | $5.1 billion |
Diluted weighted-average shares outstanding | 4.14 billion | 4.19 billion |
Diluted Earnings Per Share | $1.16 | $1.22 |
(Source: Verizon. Author's calculations for adjusted figures.)
Even with 4% churn, Verizon generates roughly $300 million in additional quarterly net income. With a $3.1 billion cash cost to the TracFone acquisition, this suggests a cash payback in just a little over 10 months. From all angles, this looks like a solid deal for Verizon, and gives growth and income investors yet another reason to consider adding the telecom giant to their portfolios.
Chad Henage owns shares of AT&T. The Motley Fool recommends T-Mobile US and Verizon Communications. The Motley Fool has a disclosure policy. Income tax rate on gambling winnings.
SPONSORED:10 stocks we like better than Verizon Communications
Verizon Gaming Headset
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
Verizon Gaming Hotspot
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now.. and Verizon Communications wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Verizon Gambling Services
*Stock Advisor returns as of September 24, 2020