AllThingsD » Mike McCormack

Investors Wary of AT&VoIP

John Paczkowski — Wed, 07 Oct 2009 21:33:25 +0000

A complete reversal of its earlier policy restricting Internet telephone services to Wi-Fi only, AT&T’s decision to allow iPhone owners to use such services on its 3G network has gone over well with consumers, and more importantly, with Apple.

“We are very happy that AT&T is now supporting VOIP applications,” said Apple (AAPL) spokeswoman Natalie Kerris. “We will be amending our developer agreements to get VOIP apps on the App Store and in customers’ hands as soon as possible.”

But the new policy hasn’t gone over well with AT&T investors. Shares in the company slipped on the news yesterday and they’re falling still further today. AT&T (T) is trading at $26.21 as I write, down more than two percent from its open. Why? Perhaps due to concerns that the carrier might take a revenue hit when iPhone owners who are using telephony services to make cheap calls switch to low-minute voice plans.

As JP Morgan analyst Mike McCormack notes, voice accounts for $50-$60 of the $95 in monthly revenue generated by the typical iPhone user. If the average user were to drop AT&T’s unlimited voice plan ($99.99/month) in favor of its cheapest ($39.99/month), the carrier could lose upward of 20 percent of voice revenue.

That’s an ugly drop. And while AT&T might offset it by raising its data plan rates, doing so would inevitably outrage customers who are already giving it hell for poor coverage and lousy call quality.

Investors Wary of AT&VoIP

John Paczkowski — Wed, 07 Oct 2009 21:33:25 +0000

Verizon, AT&T: J.P. Morgan Sees Trouble In Wireless

Eric Savitz — Thu, 07 May 2009 15:15:35 +0000

For many quarters now, telco giants Verizon (VZ) and AT&T (T) have suffered sharp declines in the residential wireline business, but have been bailed out the by rapid growth of their wireless businesses. But J.P. Morgan analyst Mike McCormack this morning warns that fundamentals in wireless are now deteriorating. As a result, he downgraded both stocks today to Neutral from Overweight. McCormack cut his target to $28 from $30 for AT&T; for Verizon he goes to $32, from $36.

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Clearwire Sinks; Attractive Spectrum Isn't Enough

Eric Savitz — Tue, 02 Dec 2008 16:21:16 +0000

Clearwire shares are down sharply following negative comments on the company this morning from analysts at J.P. Morgan and Stanford Group.

The company’s shares gained ground yesterday following the completion of its deal to acquire Sprint’s (S) Xohm wireless broadband business; it also closed a $3.2 billion investment from Google (GOOG), Comcast (CMCSA), Time Warner Cable (TWX), Intel (INTC) and others. But there are concerns that the company still faces daunting challenges, including a highly competitive market and a need for substantially more capital.

J.P. Morgan’s Mike McCormack resumed coverage with a Neutral rating, from Overweight previously. That’s an eye-opening change, given that Morgan was one of Clearwire’s advisers on the Sprint deal. He has a $6 price target on the stock.

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