DT lost $39 billion when federal officials killed a deal for AT&T (NYSE: T) to buy T-Mobile. The German company stepped away with a $4 billion break-up fee. That is not nearly enough to maintain and build the infrastructure T-Mobile needs to compete in new 4G technology. T-Mobile also has nothing close to the marketing money AT&T and Verizon Wireless have. Neither does T-Mobile have the Apple (NASDAQ: AAPL) iPhone — the greatest customer magnet in the industry.

DT has access to capital to pump billions of dollars into T-Mobile, but it will not. T-Mobile has only 35 million subscribers. Fourth place in the market is not attractive, especially when even the third place company — Sprint-Nextel (NYSE: S) — is struggling with losses and subscriber attrition. AT&T and Verizon (NYSE: VZ) are too big and have too much market share to be challenged. And the wireless subscriber level in the U.S. is nearly 300 million. In other words, without a growing pie, the battle is over market share.

There is often speculation that Sprint and T-Mobile might combine. Yet, two weak companies cannot make a strong one. Sprint is also saddled with debt, and the infrastructures of the firms are not compatible.

T-Mobile has been orphaned by its own parent, and no company will risk picking it up.

Douglas A. McIntyre

Whether or not that’s true is certainly arguable. What is not arguable is that usage-based pricing is better for cable operators and for wireless carriers. Comcast Corp. (NASDAQ: CMCSA) last week said that it planned to drop its 250-gigabyte data plan and introduce a new pricing scheme that would allow its customers to consume 300 gigabytes of data at a base rate and pay $10 for each 50 gigabytes customers use above that limit. The usage-based plan could squeeze streaming video providers like Netflix Inc. (NASDAQ: NFLX) that have built their entire business models on essentially unlimited bandwidth. Streaming a 2-hour movie in HD consumes about 4 gigabytes.

It’s probably only a matter of time before other cable providers like Time Warner Cable Inc. (NYSE: TWC) and Cablevision Corp. (NYSE: CVC) adopt similar plans. Wireless carriers AT&T Inc. (NYSE: T) and Verizon Wireless, the joint venture between Verizon Communications Inc. (NYSE: VZ) and Vodafone Group plc (NASDAQ: VOD), appear set to announce shared data plans that will allow more than one device to share usage on a single data plan. The carriers already charge more for usage above the plan limit.

Genachowski appears to believe that usage-based plans will level the playing field between the cable operators and the wireless carriers. Time Warner Cable experimented with a usage-based plan in 2009, but decided not to adopt the plan because customers hated it. Customers will still hate the plans, but without FCC backing customers no longer have any heavyweight help.

Comcast and the other cable companies will argue that the 300-gigabyte limit affects a small number of very high usage customers. They will also argue that by adopting a usage-based plan the vast majority of customers will pay less. But the data plan will also include internet access from computers, smartphones, and tablets, as well as Wi-Fi access from the local coffee shop.

Comcast has not yet announced pricing for its usage-based plan, but the odds of prices actually dropping don’t seem particularly good. Especially because the company is throwing in another 50-gigabytes of usage.

Cable companies need to prevent customers from “cutting the cord” and choosing to use their wireless data plans to drive home entertainment. An Internet TV box that really works is their biggest nightmare.

But if the cable guys and the wireless carriers can grab enough wireless spectrum and do enough cross-licensing deals and keep the content creators happy, the cost to consumers will not fall. The cable and wireless industries will appear to be competitive, but they’ll really operate an oligopoly and some small carriers and cable companies will be allowed to stick around to make things look good by providing service to low density markets. If the FCC really wants competition in the wireless business, then the agency better stick up for consumers, not cable or wireless providers.

Paul Ausick

Of the top brands, the following came in after Apple:

2. International Business Machines Corporation (NYSE: IBM)

3. Google Inc. (NASDAQ: GOOG)

4. McDonald’s Corporation (NYSE: MCD)

5. Microsoft Corporation (NASDAQ: MSFT)

6. Coca-Cola Corporation (NYSE: KO)

7. Marlboro of Altria Group Inc. (NYSE: MO)

8. AT&T, Inc. (NYSE: T)

9. Verizon Communications, Inc. (NYSE: VZ)

10. China Mobile Limited (NYSE: CHL)

11. General Electric Co. (NYSE: GE)

The ‘Top Riser” from 2011 to 2012 was Facebook, Inc. (NASDAQ: FB) with a 74% rise

The full Millward Brown study on these brands gets broken down into segments such as industry, brand growth, geographic, and sectors.

JON C. OGG

The Facebook IPO, priced at $38, will raise $16 billion. (Reuters)

A new poll shows Greeks favor pro-bailout leaders who will keep the country in the eurozone. (Reuters)

Verizon’s (NYSE: VZ) wireless operations will charge more for 4G data plans. (Reuters)

Hewlett-Packard (NYSE: HPQ) to cut its workforce by 25,000 to 30,000 people. (WSJ)

The United States sets duties on Chinese solar panels. (WSJ)

Gamestop (NYSE: GME) cuts its sales forecast. (WSJ)

Though Angela Merkel’s view of austerity for the region has been challenged recently, she appears to have no interest in changing her approach. (WSJ)

Twenty venture-backed U.S. firms are now valued above $1 billion. (WSJ)

The custodian of a group of New York City pension funds wants shareholders to vote against two directors on the Chesapeake Energy (NYSE: CHK) board. (WSJ)

The Gap (NYSE: GPS) raises its sales forecasts as its turnaround finally takes hold. (WSJ)

JP Morgan (NYSE: JPM) had no treasurer in place when its CIO made risky trades. (WSJ)

Treasury yields hit their lowest level ever as a flight to quality accelerates. (WSJ)

The eurozone may have done a good job preparing for a Greek exit. (NYT)

The U.S. Post Office will consolidate 48 mail processing centers to save money. (NYT)

JP Morgan’s trading unit has $100 billion in risky assets. (FT)

Apple (NASDAQ: AAPL) may offer an iPhone with a larger screen. (Bloomberg)

In China, home prices fall and car inventories rise — more signs of a slowing economy. (Bloomberg)

Douglas A. McIntyre

AT&T Inc. (NYSE: T) has been talking about a similar plan for at least a year now, while Sprint Nextel Corp. (NYSE: S) and T-Mobile USA, which is owned by Germany’s Deutsche Telekom AG (OTC: DTEGY), still focus on family plans that offer limited 4G data for up to two phone lines, which is not the same thing.

The carriers see the shared data plans as a new opportunity for growing revenues. The new iPad from Apple Inc. (NASDAQ: AAPL) with its high-resolution retina display can chew through a standard 2 Gbyte data plan in just a couple of hours of streaming video.

At its investor meeting yesterday, Verizon had this to say:

As [subscribers] start to migrate into 4G, they will have to come off of unlimited and go into the data share plan. And that is beneficial for us for many reasons, obviously.

And that “obviously” means that more subscribers will purchase the more costly cellular-enabled tablets and use more data, boosting monthly payments to Verizon Wireless. With only Verizon and AT&T likely to offer the plans, at least at the beginning, subscribers should not be looking forward to any great bargain. The shared data plans are not intended to be a public service.

Paul Ausick

Japanese GDP

Japan’s surprisingly sharp rebound in gross domestic product shows how resilient its economy can be despite years of growth that has been hobbled by a sort of stagflation, and more recently, the value of the yen. GDP rose at an annualized rate of 4.1% in the first quarter. Almost 40% of the improvement was due to government expenditures to rebuild parts of Japan after the horrible earthquake a year and a half ago. But even the speed with which the government turned on stimulus to fuel this is impressive. The Japanese consumer also was active in the period. Sales of cars and other consumer goods were strong. The earthquake may have shattered a large part of the economy, but many consumers have put that behind them, at least as far as their spending habits are concerned.

Shaky Greece

The situation in Greece almost certainly will drag on for another month. A caretaker government is about to take over ahead of June elections. Greece may say it cannot make the next debt payment, which is due before voters go to the polls. It could become obvious, well before the vote, that enemies of austerity will be clear winners. There is still no consensus about what happens if Greece leaves the eurozone. Some economists believe the impact will be benign. Debt held by banks and the International Monetary Fund could be wiped out. It is too early to predict what that would mean, other than to say some large private financial firms may barely survive it, if pessimists are correct. Greece’s own banking system took a blow, which is a signal for what will continue to happen to the financial companies there. The European Central Bank said it would not provide capital to four Greek banks it believes are insolvent. As Greeks continue to take money out of bank accounts, the trouble will only get worse.

Verizon Plan Changes

Verizon (NYSE: VZ) will end its unlimited data plan for existing subscribers. As customers upgrade to superfast 4G LTE service, Verizon will use the opportunity to take away something many consumers thought was routine pricing. 4G networks carry larger amounts of data than 3G ones. Verizon will make the case that the expense of customers who use these networks is high. Verizon has a strong enough lock on the American market to hold most customers to such a plan. So does AT&T (NYSE: T). Sprint (NYSE: S) and T-Mobile are in another class. They cannot alienate their smaller pools of customers and need to try to take subscribers from their larger rivals. Their one point of leverage could be to keep 4G unlimited plans and promote them as superior for heavy users of data on 4G networks.

Douglas A. McIntyre

T-Mobile’s customer base is about 35 million. Sprint’s is 50 million. AT&T and Verizon (NYSE: VZ) have about double the Sprint count. AT&T Wireless and Verizon Wireless have rich parents, each of which can draw money from their dwindling but profitable landline businesses, as well as wireless subscriber units that also have high margins. Each can afford to pay for aggressive infrastructure expansion of 4G ultrafast wireless networks. Each easily can afford to pay Apple (NASDAQ: AAPL), the most important chess piece in market share battles, the subsidies it demands for the iPhone.

T-Mobile has just announced it will cut 900 positions. The cuts will continue. DT is not likely to want to support a business that it must already know has no future.

Sprint and T-Mobile are faced with the difficult reality that each is too small and has no ready chance to grow. The technologies of the two companies are not entirely, or even partially, compatible. This makes a merger between them unlikely. Either could marry with smaller MetroPCS (NYSE: PCS). Sprint was close to such a deal, which would have cost $8 billion, but its board of directors rejected the plan as too risky and expensive.

There will be no foreign buyers for Sprint or T-Mobile, although several huge telecom companies in Europe and Asia could afford to make offers. They have watched Deutsche Telekom, one of the world’s largest carriers, struggle to keep T-Mobile afloat without any success.

T-Mobile’s presence in the United States probably will continue for years, as it becomes orphaned by its parent and slips inexorably toward ever greater loses.

Douglas A. McIntyre

CalPERS vs. Jamie Dimon

The California Public Employees Retirement System (CalPERS) remarked that it will pressure the JP Morgan (NYSE: JPM) board to split the CEO and chairman roles to water down the power of long-time leader Jamie Dimon. Under most circumstances, the proposal would be ludicrous. But JP Morgan just admitted that it lost $2 billion on a series of trading positions. Top management at the investment unit already has been forced out. No one has shown conclusively that Dimon knew the details of the risks or the trades themselves. There are concerns that he did push his traders to improve results, which could have fostered a dangerous attitude toward risky positions. CalPERS does not have the votes to win the issue, but it can further embarrass Dimon and his board.

Facebook’s IPO

The price of Facebook’s IPO is likely to fall between $34 and $38. That is above the previous forecast of $28 to $35. Of course, this means that demand for shares has risen sharply in the past few days. This is despite evidence that Facebook’s revenue growth has slowed and its mobile sales are almost nonexistent. The lure of the offering remains Facebook’s 900 million users. Investors believe that there must be some way to turn that population into tens of billions in high-margin revenue. Facebook still may be able to pick the lock of display advertising, which it has been unable to sell at high prices. Whether it can win a race to smartphones against other social networks, like Twitter, and search companies like Google (NASDAQ: GOOG) is less likely. Only so many angels can sit on the head of the mobile device pin.

Wireless Customer Satisfaction

Customer satisfaction with wireless subscriber companies steadied last quarter, according to the widely followed American Customer Satisfaction Index. On a 100-point scale, AT&T (NYSE: T) and T-Mobile each posted a 69. Verizon’s (NYSE: VZ) wireless division has a score of 70, and Sprint-Nextel (NYSE: S) came in first at 71. The news is good for Sprint, which has been criticized for poor customer service in the past. It probably will not keep the company from bleeding subscribers. AT&T and Verizon Wireless continue to take customers in a U.S. market that is not growing. What is notable about the figures is that 70 is a low score. Even though the four companies have similar levels of satisfaction, it is at a poor level.

Douglas A. McIntyre

The news is good for Sprint which has been criticized for poor customer service in the past. It probably not keep the company from bleeding subscribers. AT&T and Verizon Wireless continue to take customers in a US market which is not growing.

What is notable about the figures is that 70 is a low score. Even though the four companies have similar levels of satisfaction, it is at a poor level.

Douglas A. McIntyre

People are going to buy Coke and Pepsi, most likely, in almost any economy.  Pepsico, Inc. (NYSE: PEP) is actually up 0.6% at $67.23 against a 52-week high of $71.89; Coca-Cola Company (NYSE: KO) is down 0.6% at $76.95 against a 52-week high of $77.82.  With yields of about 3% on average, these pay about the same as the 30-Year Treasury’s long-bond.  The beer segment remains uncorrelated to defensive stocks as it did last week (in part due to currencies): Anheuser-Busch InBev SA (NYSE: BUD) is down by 0.7% at $71.43 and Molson Coors Brewing Company (NYSE: TAP) is down 1.2% at $40.81.  Even the best water utility in America via American Water Works Company, Inc. (NYSE: AWK) is down another 1% $33.99 against a 52-week and all-time high of $34.89.

Food is supposed to be defensive.  You gotta eat, right?  McDonald’s Corporation (NYSE: MCD) is down almost 0.4% at $91.55 and getting further and further away from that $102.22 all-time high recently seen.  The rest of the defensive food segment is up to mixed as food is defensive and with dividends:

• Kraft Foods Inc. (NYSE: KFT) is up 0.4% at $39.20 with a 3% yield that challenges the long-bond;
• ConAgra Foods, Inc. (NYSE: CAG) is down 0.2% at $25.67 with a 3.7% yield that beats the long-bond;
• Campbell Soup Co. (NYSE: CPB) is up 0.25% at $34.49 with a 3.4% yield that beats the long-bond;
• Hormel Foods Corporation (NYSE: HRL) is down only 0.1% at $29.08 but its 2.1% yield is ‘only’ paying what the 10-year has been paying recently.

Smoking has those nice 5%-plus yields for the defensive tobacco sector: Altria Group Inc. (NYSE: MO) is down only 0.1% at $31.75 against a 52-week high of $32.62; Vector Group Ltd. (NYSE: VGR) is down 0.5% at $16.73; and Reynolds American Inc. (NYSE: RAI) is down only 0.2% at $40.41 against a high of $42.81.

Diapers, toothpaste, deodorant, and shaving… consumer products are acting defensive: Procter & Gamble Co. (NYSE: PG) is down only 0.3% at $63.50 with a 3.5% yield; Kimberly-Clark Corporation (NYSE: KMB) is up by 0.3% at $79.62 with a 3.7% yield; Colgate-Palmolive Co. (NYSE: CL) is down 0.1% at $99.20 but it only pays about 2.5% for a dividend yield.

Drug and medical is mixed to positive: Merck & Co. Inc. (NYSE: MRK) is up by over 0.8% at $38.35 with its 4.4% yield; Pfizer Inc. (NYSE: PFE) is down only $0.01 at $22.64 with its 3.9% yield; and Johnson & Johnson (NYSE: JNJ) is down 0.5% at $64.00 with its 3.8% yield.

Those smartphones and telephones are not acting defensive at all today with Verizon Communications Inc. (NYSE: VZ) down 0.9% at $40.80 with its 5% yield and with AT&T, Inc. (NYSE: T) down 0.7% at $33.36 with a 5.4% yield.

Some investors are willing to suffer from the near-zero return of Treasuries, while others are going to try to look for the safest of stocks to seek safe and steady dividends.  The DJIA is down 0.7% and the S&P 500 was down 0.6% at last look.  Both are actually much better than what we were looking at just two hours or so ago.

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JON C. OGG