WEBVTT - P&L: Schork Says Oil Prices in Mid-50s Are 'Testing the Highs'

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<v Speaker 1>Welcome to the Bloomberg P and L Podcast. I'm pim Fox.

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<v Speaker 1>Along with my co host Lisa Abramowitz. Each day we

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<v Speaker 1>bring you the most important, noteworthy, and useful interviews for

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<v Speaker 1>you and your money, whether at the grocery store or

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<v Speaker 1>the trading floor. Find the Bloomberg P L Podcast on iTunes,

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<v Speaker 1>SoundCloud and at Bloomberg dot com. Let's talk about oil

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<v Speaker 1>and gasoline. Joining me now, Stephen Shorky is the president

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<v Speaker 1>of the Short Group. Joining me from Villanova, Pennsylvania or

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<v Speaker 1>at Stephen Shorka was noting that gasoline prices are at

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<v Speaker 1>a two year high, at least on the national average

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<v Speaker 1>track by the Triple A. Yes, they are on the high,

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<v Speaker 1>and of course this has to do everything with the

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<v Speaker 1>price rise in crude. All that has been going on

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<v Speaker 1>for the better part of the year, and it really

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<v Speaker 1>got a kick start last month. With regard to the

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<v Speaker 1>decision out of OPEC, I want to point out that

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<v Speaker 1>though yes, even no, gasoline prices are high relative to

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<v Speaker 1>where we've been in the past, that is to say,

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<v Speaker 1>adjusted for inflation, gasoline prices, while they are dearer relative

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<v Speaker 1>to a year ago, there are still relatively cheap and

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<v Speaker 1>keep in mind, we're also at the time of the

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<v Speaker 1>year where demand is very strong, and demand this December

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<v Speaker 1>happened to be stronger than usual because we had the

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<v Speaker 1>coincidence of the Hanakah holiday overlapping with the Christmas holiday,

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<v Speaker 1>so you had that many more shoppers hitting the road

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<v Speaker 1>just about at the same time. So you have the

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<v Speaker 1>combination of higher oil prices, strong demand, which is transitory,

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<v Speaker 1>but once again just for inflation, were still in very

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<v Speaker 1>good shape. Well, Stephen, what's your outlook oil right now?

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<v Speaker 1>West Texas up one percent? That's fifty three fifty eight

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<v Speaker 1>for a barrel of West test West Texas seccrued. Also

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<v Speaker 1>give us your thoughts on natural gas higher by one

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<v Speaker 1>and a quarter percent, three dollars seventy one cents per

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<v Speaker 1>million BTU. Yeah, absolutely, so, first and foremost with oil prices,

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<v Speaker 1>I've been in the camp for the past two years

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<v Speaker 1>and I will remain in that camp for seventeen. That

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<v Speaker 1>oil in the mid fifties is you are testing the

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<v Speaker 1>highs of what the market can bear. There was an

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<v Speaker 1>interesting study put up at the Dallas Federal Reserve a

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<v Speaker 1>couple of months ago where they interviewed a hundred and

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<v Speaker 1>fifty executives in the oil and gas industry. The key

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<v Speaker 1>question was at what price would you need to see

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<v Speaker 1>to bring back a substantial amount of production here in

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<v Speaker 1>the US, and the overwhelming response was oil in between

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<v Speaker 1>fifty five and sixty dollars a barrel. So now we

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<v Speaker 1>look at and what has happened during this rally. Well,

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<v Speaker 1>first and foremost, we had a sharp decline in US

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<v Speaker 1>production through the first half of this year, but that

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<v Speaker 1>decline ebbed and plateaued at the end of the summer,

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<v Speaker 1>and actually since October U S crudal production has been

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<v Speaker 1>inching higher, and so US production was already rising in

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<v Speaker 1>spite of what OPEC was or was not going to

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<v Speaker 1>a last month in Vienna. And then when we look

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<v Speaker 1>at some other metrics in the market, the CFTC data.

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<v Speaker 1>This is data that gives you and tells you and

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<v Speaker 1>breaks out the positions being held by speculators, producers, merchants,

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<v Speaker 1>so forth in the market. And when we look at

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<v Speaker 1>that data, producers are now holding the shortest position. And

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<v Speaker 1>when I say shortest position PIM, I'm talking about dy've

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<v Speaker 1>sold oil forward in the futures market. That position now

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<v Speaker 1>is at a nine year high. So a producer is

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<v Speaker 1>not a speculator. A producer will only sell oil forward

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<v Speaker 1>if they intend to bring more production to the markets.

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<v Speaker 1>So when we look at that data at a nine

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<v Speaker 1>year high, when we also look at the data of

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<v Speaker 1>the forward curve, if we look at the pricing as

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<v Speaker 1>you go out along the future, as we go out

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<v Speaker 1>along the X axis month after month, we've seen a

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<v Speaker 1>sharp rise in the oil prices through the next six months.

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<v Speaker 1>But that sharp rise has actually declined and we're actually

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<v Speaker 1>seeing heavy selling pressure because we have not seen a

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<v Speaker 1>commensurate increase in price in oil for priced in the

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<v Speaker 1>latta half of this year and in so anecdotally PIM

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<v Speaker 1>what I'm taking away from that is when we look

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<v Speaker 1>at the CFTC data, when we look at the Dallas Fed,

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<v Speaker 1>when we look at the fact that we have not

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<v Speaker 1>seen a knock on impact the prices out into the

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<v Speaker 1>future of the belief that producers, US shell producers are

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<v Speaker 1>getting ready to have a very productive and a lot

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<v Speaker 1>of the oil that OPEC has promised to take off

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<v Speaker 1>of the market. US producers are willing to put a

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<v Speaker 1>lot of that oil back onto the market. Thanks very much,

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<v Speaker 1>Stephen Short, he is the president of the short group.

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<v Speaker 1>He says, oil in the mid fifties barrel, that is

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<v Speaker 1>testing the highs of oil prices. All right, to learn

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<v Speaker 1>more are about consumer confidence? We turned to Lynn Franco,

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<v Speaker 1>director of Economic Indicators for the Conference Board, and just

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<v Speaker 1>to note, the headline is US Consumer Confidence Index increased

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<v Speaker 1>to one hundred and thirteen point seven in December. It

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<v Speaker 1>is the highest level since August of two thousand one.

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<v Speaker 1>Lynn Franco, thanks for being with us, Good to be back.

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<v Speaker 1>Tell us the details current conditions. Let's start there. Okay,

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<v Speaker 1>we had a little bit of a mixed picture. We

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<v Speaker 1>had a little bit of a decline in current conditions

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<v Speaker 1>as consumers us a little bit of softening and overall

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<v Speaker 1>economic conditions and economic conditions, but overall the figures for

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<v Speaker 1>the fourth quarter remain very strong. Now, the quote that

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<v Speaker 1>you have that leads the report talks about the post

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<v Speaker 1>election surge in optimism for the economy. How much of

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<v Speaker 1>that is tied to the stock markets performance? A lot

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<v Speaker 1>is tied to the stock market, but also consumers expectations

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<v Speaker 1>for business conditions, employment, and income really urged in December.

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<v Speaker 1>In fact, expectations are at the thirteen year high and

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<v Speaker 1>expectations for the stock prices and the stock market overall

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<v Speaker 1>are all sort of thirteen year high. Now this includes

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<v Speaker 1>the short term report as well, the short term outlook

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<v Speaker 1>improving in December as well. Absolutely, and that's what drove

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<v Speaker 1>consumer confidence this month. We saw expectations surged across the board.

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<v Speaker 1>And now the question becomes is, you know, do these

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<v Speaker 1>expectations become realizations, because that's really going to be the

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<v Speaker 1>key for holding these high levels of optimism going into

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<v Speaker 1>Then you mentioned consumer incomes and I'm wondering if you

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<v Speaker 1>could give us more detail. Well, we saw here that

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<v Speaker 1>the percent of consumers expecting their incomes to increase one

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<v Speaker 1>to that's the highest reading we've seen since December of

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<v Speaker 1>oh seven, which is right before sort of the crisis

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<v Speaker 1>hit a max um. And in terms of their decrease

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<v Speaker 1>again we're going all the way back to two thousand

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<v Speaker 1>and seven. So consumers are really positive about their income expectations,

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<v Speaker 1>and tied into that is their expectations for stock markets

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<v Speaker 1>as well. What about consumer expectations for the labor market

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<v Speaker 1>very good as well. Here we saw that increase to

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<v Speaker 1>about saying they expect more jobs versus just a four

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<v Speaker 1>saying they expect a fewer jobs, and that is the

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<v Speaker 1>highest level we've seen since back in February of eleven.

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<v Speaker 1>Conditions for businesses that's set to improve over the next

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<v Speaker 1>six months as well. Absolutely, there we saw twenty three

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<v Speaker 1>point six of consumers are telling us that they expect

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<v Speaker 1>conditions to improve. That's the highest level we've seen since

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<v Speaker 1>February of two thousand and eleven. So it's really these

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<v Speaker 1>expectations for business conditions, employment, and obviously that will then

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<v Speaker 1>lend itself to an increase in income that are driving

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<v Speaker 1>the surge that we've seen confidence this month. Now, Lynn,

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<v Speaker 1>this is not the only indicator that you look at,

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<v Speaker 1>For example, the measure of CEO confidence as well as

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<v Speaker 1>things such as help Wanted Online. Tell us about how

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<v Speaker 1>this all fits together in a picture? What would you

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<v Speaker 1>describe it as. I think what we're seeing right here

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<v Speaker 1>is just sort of some post election optimism from what

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<v Speaker 1>we're seeing with our under you know, other indicators, whether

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<v Speaker 1>it's UH employment indicators or Leading Economic Index all look

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<v Speaker 1>for a pickup in sort of economic activity in the

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<v Speaker 1>first quarter of I think with consumer confidence now, the

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<v Speaker 1>key is, you know, are we going to be able

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<v Speaker 1>to maintain these levels? And that then really becomes a

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<v Speaker 1>question of will the economy pick up further, will UH

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<v Speaker 1>employment gains pick up further, and will wage growth continue.

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<v Speaker 1>So we're expecting that whether or not we get a

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<v Speaker 1>little bit of a retreat in the next couple of months,

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<v Speaker 1>that could be possible, but we still see a very

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<v Speaker 1>confident consumer. And then just quickly, based on your experience,

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<v Speaker 1>is the is the economy going to lead this indicator

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<v Speaker 1>or is it going to lag the indicator. I think

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<v Speaker 1>it's going to sort of lead the indicator. And I

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<v Speaker 1>think key here is what really happens in terms of

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<v Speaker 1>job growth and wage growth. UH And if these both

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<v Speaker 1>of these don't sort of pick up in the next

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<v Speaker 1>couple of months, we could see a little bit of

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<v Speaker 1>a retreat and consumer confidence. But if we just take

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<v Speaker 1>a step back, I mean, we've been at very high

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<v Speaker 1>levels since the summer. We've been at over a hundred,

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<v Speaker 1>so I think overall we should maintain levels that reflect

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<v Speaker 1>a very confident consumer. Thank you very much, Lynn Franco,

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<v Speaker 1>Director of Economic Indicators for the Conference Board. Part one

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<v Speaker 1>stock that is falling and has well has fallen this year,

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<v Speaker 1>Rather is uh Banca mont Sienna down more than eighty seven.

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<v Speaker 1>Here I'll tell us more about the future of the bank.

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<v Speaker 1>Is Kiara Albanesi are room based markets reporter for Bloomberg.

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<v Speaker 1>Kara tell us the latest details on the rescue or

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<v Speaker 1>attempted rescue of Banka Monte di Paski. Good morning everyone. Yes,

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<v Speaker 1>indeed the stock, as you mentioned, has fallen, but trading

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<v Speaker 1>has been altered for a few days given that the bank,

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<v Speaker 1>which is that the world oldest bank, is actually in

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<v Speaker 1>the eye of the storm because of its inability to

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<v Speaker 1>have a sustainable plan to to plug in a capital

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<v Speaker 1>short fall. The latest on this front has been a

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<v Speaker 1>bank UM a letter from the European Central Bank to

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<v Speaker 1>the to the bank, which was acknowledged yesterday evening, saying

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<v Speaker 1>that the capital short fall is actually almost doubled that

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<v Speaker 1>what initially was expected. Uh. This means that a twenty

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<v Speaker 1>billion funds that was set up by the state UM

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<v Speaker 1>earlier earlier this month to help the bank could be

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<v Speaker 1>almost entirely taken up or for its most part taken

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<v Speaker 1>up by Montepasti only. Well, what has the government's response

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<v Speaker 1>been to the e c b S letter saying that

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<v Speaker 1>the bank needs more money and as you just described

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<v Speaker 1>that twenty billion euro effort was designed not just for

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<v Speaker 1>Monte di Paski, but for other Italian banks as well.

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<v Speaker 1>The government has been um silent at the moment, but

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<v Speaker 1>local media has been saying that the intervention could uh

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<v Speaker 1>could be almost UH six point five billion from the States,

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<v Speaker 1>so basically the government would step in covering most of

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<v Speaker 1>the capital shortfall. What about the bond holders? Will the

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<v Speaker 1>bond holders end up with any value if the bank

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<v Speaker 1>receives this injection of capital from the Italian government. The

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<v Speaker 1>bond holders could say could save parts of their investments,

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<v Speaker 1>but they will most definitely their loss in this case. UM.

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<v Speaker 1>Both the state and the ECB, especially in an interview

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<v Speaker 1>with the CB supervisory board member Angeline earlier today, saying

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<v Speaker 1>that yes, the bond holders also have to to chip

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<v Speaker 1>in into into the shortfallen and and basically combine their

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<v Speaker 1>efforts with the state. What is the state of the

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<v Speaker 1>bank's liquidity right now at the moment, The ECB said

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<v Speaker 1>that the bank is still solvent, which is definitely good

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<v Speaker 1>news for for the market, for investors and for those

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<v Speaker 1>following the story closely. UM, But the liquidity has been

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<v Speaker 1>deteriorating very quickly and the ECB mentioned in particular what

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<v Speaker 1>happened in terms of liquidity degrees during the month of

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<v Speaker 1>December and the days before. So it has been a

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<v Speaker 1>liquidity deterioration, quite sudden, quite fast, in the run up

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<v Speaker 1>to to to the latest news that we just we

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<v Speaker 1>just discussed KIA. It's worth noting that not all Italian

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<v Speaker 1>banks are facing the kind of pressure that Monte Dipaski

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<v Speaker 1>is facing. Correct. Correct, Not only Italian banks are in

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<v Speaker 1>the same condition, and Montepasky is definitely the bank which

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<v Speaker 1>is in the weakest position, but most or several other

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<v Speaker 1>banks are also feeling the pressure of non performing loans,

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<v Speaker 1>a burden that overall is about three hundred and sixty

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<v Speaker 1>billion for the country, and other banks are expected to

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<v Speaker 1>also seek the aid of the funds that was approved

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<v Speaker 1>by the government. Has there been any reaction to a

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<v Speaker 1>plan to put all of the bad loans into a

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<v Speaker 1>bad loan bank and be able to ring fence the

0:13:51.960 --> 0:13:56.360
<v Speaker 1>problems here Again, the issue is the European Central Bank,

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<v Speaker 1>which is monitoring closely what is going on with with

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<v Speaker 1>Monteparsky and UM. The plan that was advised by by

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<v Speaker 1>GPE market until a few weeks ago, a few days

0:14:08.080 --> 0:14:12.720
<v Speaker 1>actually go Um also looked into this possibility, but that

0:14:13.320 --> 0:14:17.839
<v Speaker 1>was set aside for the moment. What happens over the

0:14:17.880 --> 0:14:21.479
<v Speaker 1>next week or so. Are there meetings between the Italian

0:14:21.560 --> 0:14:25.680
<v Speaker 1>government and European Central Bank officials or they everyone just

0:14:25.760 --> 0:14:30.640
<v Speaker 1>taking a break. The contexts are are still ongoing, and

0:14:30.720 --> 0:14:34.560
<v Speaker 1>the fact that UM that the ECB responded to the

0:14:34.640 --> 0:14:38.080
<v Speaker 1>letter and Montepasky send out a statement on on a

0:14:38.200 --> 0:14:41.120
<v Speaker 1>day that is actually a holiday in Italy is a

0:14:41.160 --> 0:14:45.960
<v Speaker 1>signal that everyone is still very much UM at the table,

0:14:46.760 --> 0:14:50.800
<v Speaker 1>even if, of course UM that there is a festive break.

0:14:51.360 --> 0:14:54.800
<v Speaker 1>At the same time, it is likely that things are

0:14:54.840 --> 0:14:57.600
<v Speaker 1>going to slow down until the new year and and

0:14:57.760 --> 0:15:01.840
<v Speaker 1>more clarity is found between those the record discussion. Thank

0:15:01.880 --> 0:15:05.800
<v Speaker 1>you very much. Giara alban Asi, markets reporter for Bloomberg News,

0:15:05.840 --> 0:15:22.720
<v Speaker 1>reporting from Rome going up against Verizon and a T

0:15:22.920 --> 0:15:26.680
<v Speaker 1>and T. Some would think it is suicidal, but not

0:15:27.000 --> 0:15:30.400
<v Speaker 1>David Glickman. He is the chief executive of Ultra Mobile

0:15:30.840 --> 0:15:33.600
<v Speaker 1>and he's here to tell us more about the company

0:15:33.680 --> 0:15:36.760
<v Speaker 1>and its battle in the mobile phone business. David Glickman,

0:15:36.760 --> 0:15:39.320
<v Speaker 1>thank you very much for being with us. Thank you

0:15:39.680 --> 0:15:42.680
<v Speaker 1>all right, So you are serial entrepreneur, as I understand

0:15:42.720 --> 0:15:45.840
<v Speaker 1>it you you previously found it TelePacific that was back

0:15:45.840 --> 0:15:50.920
<v Speaker 1>in and that was to compete with landline phone exchanges.

0:15:51.320 --> 0:15:54.360
<v Speaker 1>Now you're going after mobile operators. Tell us about how

0:15:54.480 --> 0:16:01.480
<v Speaker 1>Ultramobile works. UM. Ultramobile is a nationwide mobile carrier, and

0:16:01.840 --> 0:16:07.160
<v Speaker 1>we uh, we have stores and offices all around the country. Uh.

0:16:07.200 --> 0:16:12.040
<v Speaker 1>And we assume that everybody has their own mobile phone handset,

0:16:12.240 --> 0:16:15.120
<v Speaker 1>and we offer sim cards uh to put in your

0:16:15.160 --> 0:16:18.280
<v Speaker 1>existing phones, very much like they do in Europe and

0:16:18.320 --> 0:16:21.960
<v Speaker 1>in Asia, just hasn't come to America just yet, um,

0:16:22.080 --> 0:16:25.400
<v Speaker 1>in full force, and we are making that happen. Well, David,

0:16:25.440 --> 0:16:28.080
<v Speaker 1>how is it possible that you are able to compete

0:16:28.080 --> 0:16:31.640
<v Speaker 1>against the likes of Verizon, A T and T T

0:16:31.880 --> 0:16:35.960
<v Speaker 1>Mobile uh in offering what looks like to be a

0:16:37.560 --> 0:16:42.440
<v Speaker 1>per month all you can eat mobile fare um. Well,

0:16:43.080 --> 0:16:46.560
<v Speaker 1>a little something that I like to call coopetition. UM.

0:16:46.680 --> 0:16:51.240
<v Speaker 1>We we actually purchase network from T Mobile so that

0:16:51.280 --> 0:16:55.720
<v Speaker 1>we have the same nationwide footprint. UM. And then since

0:16:55.760 --> 0:16:59.800
<v Speaker 1>we don't spend hundreds of millions of dollars on advertising, um,

0:16:59.840 --> 0:17:02.280
<v Speaker 1>and we just pass on all the savings to our

0:17:02.560 --> 0:17:06.520
<v Speaker 1>end users. So uh yeah, So for for nineteen dollars,

0:17:06.560 --> 0:17:11.240
<v Speaker 1>you can have unlimited talk, unlimited texts, unlimited UH data,

0:17:11.440 --> 0:17:17.119
<v Speaker 1>unlimited international calling and unlimited international texting. UM. All you

0:17:17.160 --> 0:17:19.800
<v Speaker 1>need to do is get one of our SIM cards

0:17:19.880 --> 0:17:22.320
<v Speaker 1>and put it into your phone. Now, in addition to

0:17:22.359 --> 0:17:25.960
<v Speaker 1>it being as you describe, unlimited, you can also customize

0:17:26.240 --> 0:17:30.720
<v Speaker 1>the service. Can you explain how that works? Sure? UM?

0:17:30.800 --> 0:17:35.159
<v Speaker 1>So UM at them at the lower price levels, for example,

0:17:35.320 --> 0:17:40.080
<v Speaker 1>nineteen dollars, UM, you get unlimited data. You don't get

0:17:40.840 --> 0:17:44.800
<v Speaker 1>unlimited high speed data. So we have very high speed

0:17:44.800 --> 0:17:48.080
<v Speaker 1>four g LTE and we give you a chunk of

0:17:48.119 --> 0:17:52.280
<v Speaker 1>that UM and if you want more, UM, you just

0:17:52.359 --> 0:17:55.880
<v Speaker 1>pay for exactly what you use UH, and you don't.

0:17:55.920 --> 0:17:58.919
<v Speaker 1>You don't end up having to pay sixty seventy eight

0:17:59.080 --> 0:18:02.080
<v Speaker 1>dollars like you do with some of the other carriers. UM.

0:18:02.200 --> 0:18:05.280
<v Speaker 1>And have you know, ten gigabytes of high speed data

0:18:05.320 --> 0:18:08.600
<v Speaker 1>if you only use one or two? So this way, UM,

0:18:08.840 --> 0:18:13.480
<v Speaker 1>you're you're unlimited. But after a certain amount you end

0:18:13.560 --> 0:18:17.439
<v Speaker 1>up going back to more of a three g UH

0:18:17.600 --> 0:18:20.880
<v Speaker 1>data and you can upgrade to whatever you want. How

0:18:20.880 --> 0:18:24.880
<v Speaker 1>did you decide to focus on what you describe as

0:18:24.920 --> 0:18:28.440
<v Speaker 1>an underserved demographic of the U S consumer market, the

0:18:29.000 --> 0:18:36.399
<v Speaker 1>foreign born US residents well, uh we uh. I. Basically

0:18:36.600 --> 0:18:39.440
<v Speaker 1>I've lived overseas. I started my first songing company when

0:18:39.480 --> 0:18:44.760
<v Speaker 1>I was living in South America and offered discounts to

0:18:45.359 --> 0:18:50.120
<v Speaker 1>businesses there. And uh, at the same time when when

0:18:50.200 --> 0:18:52.760
<v Speaker 1>I when living in America, it's so hard to make

0:18:52.800 --> 0:18:56.960
<v Speaker 1>international phone calls because usually the big mobile carriers want

0:18:56.960 --> 0:19:00.320
<v Speaker 1>to charge you a dollar a minute tall overseas, or

0:19:00.640 --> 0:19:03.680
<v Speaker 1>if you want to use the more inexpensive calling cards,

0:19:04.640 --> 0:19:06.520
<v Speaker 1>it's the pain. You have to dial and access number,

0:19:06.600 --> 0:19:09.600
<v Speaker 1>punch in your pin number, then punch in the destination number.

0:19:10.119 --> 0:19:13.000
<v Speaker 1>If you're on a smartphone, if somebody calls you, you

0:19:13.040 --> 0:19:16.760
<v Speaker 1>can't just hit reply and call back. Um. And so

0:19:16.880 --> 0:19:19.399
<v Speaker 1>we decided that we wanted to come up with a

0:19:19.480 --> 0:19:25.280
<v Speaker 1>system that employed either free international calls or inexpensive you know,

0:19:25.320 --> 0:19:29.600
<v Speaker 1>calling card rates on. Uh, it's not it's not free

0:19:29.600 --> 0:19:31.440
<v Speaker 1>in the sense that you do have to actually buy

0:19:31.480 --> 0:19:36.520
<v Speaker 1>the card. Correct. Well, I mean you've got the you've

0:19:36.560 --> 0:19:39.920
<v Speaker 1>got a twenty, you've got a plan thirty four dollar

0:19:40.080 --> 0:19:41.960
<v Speaker 1>and thirty nine dollar and so on. I mean you

0:19:42.000 --> 0:19:45.560
<v Speaker 1>have to actually buy the buy the card. Right. So,

0:19:45.560 --> 0:19:48.560
<v Speaker 1>so what a saying is international is free on a

0:19:48.640 --> 0:19:51.919
<v Speaker 1>discounted mobile phone so instead of paying six yr seventy

0:19:51.920 --> 0:19:55.720
<v Speaker 1>dollars for unlimited talking text and UH in the US

0:19:55.760 --> 0:19:59.280
<v Speaker 1>for nineteen dollars, you have UM. You're you're getting a

0:19:59.320 --> 0:20:02.320
<v Speaker 1>discount on limited domestic talk in text. But at the

0:20:02.359 --> 0:20:06.479
<v Speaker 1>same time, we give you sixty countries to call about

0:20:06.520 --> 0:20:08.960
<v Speaker 1>two thirds of the world for free, so you can

0:20:08.960 --> 0:20:12.560
<v Speaker 1>call Mexico unlimited, you can call China unlimited, Canada unlimited,

0:20:12.600 --> 0:20:16.359
<v Speaker 1>Europe unlimited. UM. It's sys some countries that are more expensive,

0:20:16.760 --> 0:20:21.280
<v Speaker 1>for example, some of the African countries calling Philippines, etcetera, etcetera,

0:20:21.560 --> 0:20:23.960
<v Speaker 1>where we will charge you, you know, two or three

0:20:24.040 --> 0:20:27.320
<v Speaker 1>four cents a minute instead of UM. What the what

0:20:27.480 --> 0:20:30.639
<v Speaker 1>the large carriers will charge a dollar a minute. What's

0:20:30.680 --> 0:20:34.320
<v Speaker 1>the incentive for the stores to sell your cards, your

0:20:34.359 --> 0:20:38.800
<v Speaker 1>simcards versus the SIM cards of more established players like

0:20:39.000 --> 0:20:43.240
<v Speaker 1>Verizon or A T and T. Well, you know, we

0:20:43.359 --> 0:20:47.879
<v Speaker 1>focus very heavily on the stores as our distribution points,

0:20:47.920 --> 0:20:51.160
<v Speaker 1>so we make it very easy for them to sell UM.

0:20:51.240 --> 0:20:54.000
<v Speaker 1>We offer a great product to the consumers, so they know.

0:20:54.080 --> 0:20:56.520
<v Speaker 1>The consumers are gonna be very happy when they get

0:20:56.560 --> 0:21:00.240
<v Speaker 1>an ultramobile SIM cards and we offer one of the

0:21:00.280 --> 0:21:02.679
<v Speaker 1>highest commissions. You know, Our theory when we launched the

0:21:02.680 --> 0:21:05.560
<v Speaker 1>company was the customer is going to have the best

0:21:05.600 --> 0:21:08.280
<v Speaker 1>deal and the store is going to make more money

0:21:08.320 --> 0:21:12.320
<v Speaker 1>and have happier customers by selling ultramobile. And we've stuck

0:21:12.359 --> 0:21:15.360
<v Speaker 1>with that in the four years that we've been in business. Now,

0:21:15.400 --> 0:21:19.760
<v Speaker 1>this idea of offering uh, data saving data your way,

0:21:19.840 --> 0:21:24.359
<v Speaker 1>this is what they call voluntarily throttling the speeds and

0:21:24.760 --> 0:21:30.199
<v Speaker 1>the access to various websites or services. How is that

0:21:30.280 --> 0:21:36.680
<v Speaker 1>working out? Actually it's been succeeded our expectation. Customers absolutely

0:21:36.720 --> 0:21:39.600
<v Speaker 1>love it. So what happens is, um, you know, if

0:21:39.640 --> 0:21:42.080
<v Speaker 1>you're on a plan that says says gives you five

0:21:42.160 --> 0:21:47.040
<v Speaker 1>gigabytes of high speed data, and UH, you go on

0:21:47.200 --> 0:21:50.800
<v Speaker 1>YouTube and you start looking at a video, and you

0:21:50.840 --> 0:21:53.560
<v Speaker 1>know as you as you as the video starts to load,

0:21:54.200 --> 0:21:57.000
<v Speaker 1>and as you start watching it, it's loading much more

0:21:57.000 --> 0:22:00.119
<v Speaker 1>than you're than you're watching. So if you're you're the

0:22:00.160 --> 0:22:04.560
<v Speaker 1>seconds into the video, the YouTube is already downloaded UM

0:22:04.640 --> 0:22:08.280
<v Speaker 1>onto your phone, maybe one minute of that video, UM.

0:22:08.320 --> 0:22:10.440
<v Speaker 1>And then if you don't choose to watch the rest

0:22:10.440 --> 0:22:12.480
<v Speaker 1>of that video, it wasn't the one you wanted. You

0:22:12.480 --> 0:22:13.840
<v Speaker 1>want to go to the next one. Or the next

0:22:13.840 --> 0:22:16.840
<v Speaker 1>one you ended up paying. You ended up using a

0:22:16.840 --> 0:22:19.920
<v Speaker 1>lot of your data for video that you never watched.

0:22:19.960 --> 0:22:22.440
<v Speaker 1>The same thing happens with Netflix. The same thing happens

0:22:22.760 --> 0:22:28.639
<v Speaker 1>with Facebook, especially because Facebook will automatically uh download and

0:22:28.640 --> 0:22:30.720
<v Speaker 1>play a lot of videos that you have you haven't

0:22:30.720 --> 0:22:34.200
<v Speaker 1>even watched yet, or you haven't even you clicked on UM.

0:22:34.480 --> 0:22:37.840
<v Speaker 1>And so with data mind way, you picked the speed

0:22:37.960 --> 0:22:41.160
<v Speaker 1>that you want. Essentially you decide how much of that

0:22:41.280 --> 0:22:44.679
<v Speaker 1>pretty loading you you want. And we've discovered as a

0:22:44.680 --> 0:22:48.520
<v Speaker 1>lot of our customers that don't like paying for uh,

0:22:48.560 --> 0:22:52.919
<v Speaker 1>you know, downloading pipe speed data UM for movies and

0:22:53.040 --> 0:22:56.840
<v Speaker 1>videos that they're not watching. They they get onto the

0:22:56.840 --> 0:23:00.400
<v Speaker 1>the the data my way, and they picked how much

0:23:00.400 --> 0:23:04.040
<v Speaker 1>throttling they want and how much how much downloading. Indeed,

0:23:04.200 --> 0:23:06.720
<v Speaker 1>thanks very much, David Glickman. He is the founder and

0:23:06.760 --> 0:23:16.520
<v Speaker 1>the chief executive of Ultramobile. Thanks for listening to the

0:23:16.560 --> 0:23:19.800
<v Speaker 1>Bloomberg P and L podcast. You can subscribe and listen

0:23:19.840 --> 0:23:25.200
<v Speaker 1>to interviews at iTunes, SoundCloud, or whatever podcast platform you prefer.

0:23:25.480 --> 0:23:28.800
<v Speaker 1>I'm pim Fox. I'm out there on Twitter at pim Fox.

0:23:29.080 --> 0:23:31.760
<v Speaker 1>I'm out there on Twitter at Lisa Abramo. It's one

0:23:32.040 --> 0:23:34.800
<v Speaker 1>before the podcast. You can always catch us worldwide on

0:23:34.840 --> 0:23:35.639
<v Speaker 1>Bloomberg Radio