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

• 0:04
  Speaker 1: Welcome to the Bloomberg P and L Podcast. I'm pim Fox.
• 0:08
  Speaker 1: Along with my co host Lisa Abramowitz. Each day we
• 0:11
  Speaker 1: bring you the most important, noteworthy, and useful interviews for
• 0:14
  Speaker 1: you and your money, whether at the grocery store or
• 0:16
  Speaker 1: the trading floor. Find the Bloomberg P L Podcast on iTunes,
• 0:20
  Speaker 1: SoundCloud and at Bloomberg dot com. Let's talk about oil
• 0:28
  Speaker 1: and gasoline. Joining me now, Stephen Shorky is the president
• 0:32
  Speaker 1: of the Short Group. Joining me from Villanova, Pennsylvania or
• 0:35
  Speaker 1: at Stephen Shorka was noting that gasoline prices are at
• 0:39
  Speaker 1: a two year high, at least on the national average
• 0:41
  Speaker 1: track by the Triple A. Yes, they are on the high,
• 0:45
  Speaker 1: and of course this has to do everything with the
• 0:47
  Speaker 1: price rise in crude. All that has been going on
• 0:50
  Speaker 1: for the better part of the year, and it really
• 0:52
  Speaker 1: got a kick start last month. With regard to the
• 0:56
  Speaker 1: decision out of OPEC, I want to point out that
• 0:59
  Speaker 1: though yes, even no, gasoline prices are high relative to
• 1:02
  Speaker 1: where we've been in the past, that is to say,
• 1:05
  Speaker 1: adjusted for inflation, gasoline prices, while they are dearer relative
• 1:09
  Speaker 1: to a year ago, there are still relatively cheap and
• 1:12
  Speaker 1: keep in mind, we're also at the time of the
• 1:14
  Speaker 1: year where demand is very strong, and demand this December
• 1:19
  Speaker 1: happened to be stronger than usual because we had the
• 1:22
  Speaker 1: coincidence of the Hanakah holiday overlapping with the Christmas holiday,
• 1:27
  Speaker 1: so you had that many more shoppers hitting the road
• 1:30
  Speaker 1: just about at the same time. So you have the
• 1:32
  Speaker 1: combination of higher oil prices, strong demand, which is transitory,
• 1:37
  Speaker 1: but once again just for inflation, were still in very
• 1:39
  Speaker 1: good shape. Well, Stephen, what's your outlook oil right now?
• 1:42
  Speaker 1: West Texas up one percent? That's fifty three fifty eight
• 1:47
  Speaker 1: for a barrel of West test West Texas seccrued. Also
• 1:51
  Speaker 1: give us your thoughts on natural gas higher by one
• 1:53
  Speaker 1: and a quarter percent, three dollars seventy one cents per
• 1:56
  Speaker 1: million BTU. Yeah, absolutely, so, first and foremost with oil prices,
• 2:01
  Speaker 1: I've been in the camp for the past two years
• 2:03
  Speaker 1: and I will remain in that camp for seventeen. That
• 2:06
  Speaker 1: oil in the mid fifties is you are testing the
• 2:09
  Speaker 1: highs of what the market can bear. There was an
• 2:12
  Speaker 1: interesting study put up at the Dallas Federal Reserve a
• 2:15
  Speaker 1: couple of months ago where they interviewed a hundred and
• 2:18
  Speaker 1: fifty executives in the oil and gas industry. The key
• 2:21
  Speaker 1: question was at what price would you need to see
• 2:24
  Speaker 1: to bring back a substantial amount of production here in
• 2:27
  Speaker 1: the US, and the overwhelming response was oil in between
• 2:32
  Speaker 1: fifty five and sixty dollars a barrel. So now we
• 2:35
  Speaker 1: look at and what has happened during this rally. Well,
• 2:38
  Speaker 1: first and foremost, we had a sharp decline in US
• 2:42
  Speaker 1: production through the first half of this year, but that
• 2:45
  Speaker 1: decline ebbed and plateaued at the end of the summer,
• 2:49
  Speaker 1: and actually since October U S crudal production has been
• 2:52
  Speaker 1: inching higher, and so US production was already rising in
• 2:56
  Speaker 1: spite of what OPEC was or was not going to
• 3:00
  Speaker 1: a last month in Vienna. And then when we look
• 3:02
  Speaker 1: at some other metrics in the market, the CFTC data.
• 3:06
  Speaker 1: This is data that gives you and tells you and
• 3:08
  Speaker 1: breaks out the positions being held by speculators, producers, merchants,
• 3:13
  Speaker 1: so forth in the market. And when we look at
• 3:15
  Speaker 1: that data, producers are now holding the shortest position. And
• 3:21
  Speaker 1: when I say shortest position PIM, I'm talking about dy've
• 3:24
  Speaker 1: sold oil forward in the futures market. That position now
• 3:28
  Speaker 1: is at a nine year high. So a producer is
• 3:32
  Speaker 1: not a speculator. A producer will only sell oil forward
• 3:35
  Speaker 1: if they intend to bring more production to the markets.
• 3:39
  Speaker 1: So when we look at that data at a nine
• 3:41
  Speaker 1: year high, when we also look at the data of
• 3:44
  Speaker 1: the forward curve, if we look at the pricing as
• 3:47
  Speaker 1: you go out along the future, as we go out
• 3:49
  Speaker 1: along the X axis month after month, we've seen a
• 3:52
  Speaker 1: sharp rise in the oil prices through the next six months.
• 3:55
  Speaker 1: But that sharp rise has actually declined and we're actually
• 3:59
  Speaker 1: seeing heavy selling pressure because we have not seen a
• 4:02
  Speaker 1: commensurate increase in price in oil for priced in the
• 4:05
  Speaker 1: latta half of this year and in so anecdotally PIM
• 4:10
  Speaker 1: what I'm taking away from that is when we look
• 4:12
  Speaker 1: at the CFTC data, when we look at the Dallas Fed,
• 4:15
  Speaker 1: when we look at the fact that we have not
• 4:17
  Speaker 1: seen a knock on impact the prices out into the
• 4:21
  Speaker 1: future of the belief that producers, US shell producers are
• 4:25
  Speaker 1: getting ready to have a very productive and a lot
• 4:29
  Speaker 1: of the oil that OPEC has promised to take off
• 4:31
  Speaker 1: of the market. US producers are willing to put a
• 4:34
  Speaker 1: lot of that oil back onto the market. Thanks very much,
• 4:37
  Speaker 1: Stephen Short, he is the president of the short group.
• 4:40
  Speaker 1: He says, oil in the mid fifties barrel, that is
• 4:45
  Speaker 1: testing the highs of oil prices. All right, to learn
• 4:59
  Speaker 1: more are about consumer confidence? We turned to Lynn Franco,
• 5:03
  Speaker 1: director of Economic Indicators for the Conference Board, and just
• 5:07
  Speaker 1: to note, the headline is US Consumer Confidence Index increased
• 5:11
  Speaker 1: to one hundred and thirteen point seven in December. It
• 5:15
  Speaker 1: is the highest level since August of two thousand one.
• 5:19
  Speaker 1: Lynn Franco, thanks for being with us, Good to be back.
• 5:22
  Speaker 1: Tell us the details current conditions. Let's start there. Okay,
• 5:26
  Speaker 1: we had a little bit of a mixed picture. We
• 5:28
  Speaker 1: had a little bit of a decline in current conditions
• 5:30
  Speaker 1: as consumers us a little bit of softening and overall
• 5:34
  Speaker 1: economic conditions and economic conditions, but overall the figures for
• 5:39
  Speaker 1: the fourth quarter remain very strong. Now, the quote that
• 5:42
  Speaker 1: you have that leads the report talks about the post
• 5:45
  Speaker 1: election surge in optimism for the economy. How much of
• 5:49
  Speaker 1: that is tied to the stock markets performance? A lot
• 5:52
  Speaker 1: is tied to the stock market, but also consumers expectations
• 5:56
  Speaker 1: for business conditions, employment, and income really urged in December.
• 6:01
  Speaker 1: In fact, expectations are at the thirteen year high and
• 6:04
  Speaker 1: expectations for the stock prices and the stock market overall
• 6:08
  Speaker 1: are all sort of thirteen year high. Now this includes
• 6:11
  Speaker 1: the short term report as well, the short term outlook
• 6:14
  Speaker 1: improving in December as well. Absolutely, and that's what drove
• 6:17
  Speaker 1: consumer confidence this month. We saw expectations surged across the board.
• 6:23
  Speaker 1: And now the question becomes is, you know, do these
• 6:25
  Speaker 1: expectations become realizations, because that's really going to be the
• 6:29
  Speaker 1: key for holding these high levels of optimism going into
• 6:33
  Speaker 1: Then you mentioned consumer incomes and I'm wondering if you
• 6:36
  Speaker 1: could give us more detail. Well, we saw here that
• 6:38
  Speaker 1: the percent of consumers expecting their incomes to increase one
• 6:42
  Speaker 1: to that's the highest reading we've seen since December of
• 6:46
  Speaker 1: oh seven, which is right before sort of the crisis
• 6:49
  Speaker 1: hit a max um. And in terms of their decrease
• 6:53
  Speaker 1: again we're going all the way back to two thousand
• 6:55
  Speaker 1: and seven. So consumers are really positive about their income expectations,
• 6:59
  Speaker 1: and tied into that is their expectations for stock markets
• 7:03
  Speaker 1: as well. What about consumer expectations for the labor market
• 7:07
  Speaker 1: very good as well. Here we saw that increase to
• 7:10
  Speaker 1: about saying they expect more jobs versus just a four
• 7:15
  Speaker 1: saying they expect a fewer jobs, and that is the
• 7:18
  Speaker 1: highest level we've seen since back in February of eleven.
• 7:23
  Speaker 1: Conditions for businesses that's set to improve over the next
• 7:26
  Speaker 1: six months as well. Absolutely, there we saw twenty three
• 7:30
  Speaker 1: point six of consumers are telling us that they expect
• 7:33
  Speaker 1: conditions to improve. That's the highest level we've seen since
• 7:37
  Speaker 1: February of two thousand and eleven. So it's really these
• 7:40
  Speaker 1: expectations for business conditions, employment, and obviously that will then
• 7:44
  Speaker 1: lend itself to an increase in income that are driving
• 7:47
  Speaker 1: the surge that we've seen confidence this month. Now, Lynn,
• 7:50
  Speaker 1: this is not the only indicator that you look at,
• 7:52
  Speaker 1: For example, the measure of CEO confidence as well as
• 7:56
  Speaker 1: things such as help Wanted Online. Tell us about how
• 7:59
  Speaker 1: this all fits together in a picture? What would you
• 8:01
  Speaker 1: describe it as. I think what we're seeing right here
• 8:04
  Speaker 1: is just sort of some post election optimism from what
• 8:07
  Speaker 1: we're seeing with our under you know, other indicators, whether
• 8:10
  Speaker 1: it's UH employment indicators or Leading Economic Index all look
• 8:15
  Speaker 1: for a pickup in sort of economic activity in the
• 8:18
  Speaker 1: first quarter of I think with consumer confidence now, the
• 8:22
  Speaker 1: key is, you know, are we going to be able
• 8:24
  Speaker 1: to maintain these levels? And that then really becomes a
• 8:28
  Speaker 1: question of will the economy pick up further, will UH
• 8:32
  Speaker 1: employment gains pick up further, and will wage growth continue.
• 8:36
  Speaker 1: So we're expecting that whether or not we get a
• 8:39
  Speaker 1: little bit of a retreat in the next couple of months,
• 8:42
  Speaker 1: that could be possible, but we still see a very
• 8:44
  Speaker 1: confident consumer. And then just quickly, based on your experience,
• 8:48
  Speaker 1: is the is the economy going to lead this indicator
• 8:53
  Speaker 1: or is it going to lag the indicator. I think
• 8:56
  Speaker 1: it's going to sort of lead the indicator. And I
• 8:59
  Speaker 1: think key here is what really happens in terms of
• 9:02
  Speaker 1: job growth and wage growth. UH And if these both
• 9:07
  Speaker 1: of these don't sort of pick up in the next
• 9:09
  Speaker 1: couple of months, we could see a little bit of
• 9:11
  Speaker 1: a retreat and consumer confidence. But if we just take
• 9:14
  Speaker 1: a step back, I mean, we've been at very high
• 9:16
  Speaker 1: levels since the summer. We've been at over a hundred,
• 9:19
  Speaker 1: so I think overall we should maintain levels that reflect
• 9:25
  Speaker 1: a very confident consumer. Thank you very much, Lynn Franco,
• 9:28
  Speaker 1: Director of Economic Indicators for the Conference Board. Part one
• 9:43
  Speaker 1: stock that is falling and has well has fallen this year,
• 9:47
  Speaker 1: Rather is uh Banca mont Sienna down more than eighty seven.
• 9:54
  Speaker 1: Here I'll tell us more about the future of the bank.
• 9:56
  Speaker 1: Is Kiara Albanesi are room based markets reporter for Bloomberg.
• 10:01
  Speaker 1: Kara tell us the latest details on the rescue or
• 10:04
  Speaker 1: attempted rescue of Banka Monte di Paski. Good morning everyone. Yes,
• 10:10
  Speaker 1: indeed the stock, as you mentioned, has fallen, but trading
• 10:15
  Speaker 1: has been altered for a few days given that the bank,
• 10:19
  Speaker 1: which is that the world oldest bank, is actually in
• 10:22
  Speaker 1: the eye of the storm because of its inability to
• 10:27
  Speaker 1: have a sustainable plan to to plug in a capital
• 10:31
  Speaker 1: short fall. The latest on this front has been a
• 10:35
  Speaker 1: bank UM a letter from the European Central Bank to
• 10:39
  Speaker 1: the to the bank, which was acknowledged yesterday evening, saying
• 10:44
  Speaker 1: that the capital short fall is actually almost doubled that
• 10:48
  Speaker 1: what initially was expected. Uh. This means that a twenty
• 10:52
  Speaker 1: billion funds that was set up by the state UM
• 10:56
  Speaker 1: earlier earlier this month to help the bank could be
• 11:01
  Speaker 1: almost entirely taken up or for its most part taken
• 11:05
  Speaker 1: up by Montepasti only. Well, what has the government's response
• 11:09
  Speaker 1: been to the e c b S letter saying that
• 11:12
  Speaker 1: the bank needs more money and as you just described
• 11:15
  Speaker 1: that twenty billion euro effort was designed not just for
• 11:20
  Speaker 1: Monte di Paski, but for other Italian banks as well.
• 11:24
  Speaker 1: The government has been um silent at the moment, but
• 11:28
  Speaker 1: local media has been saying that the intervention could uh
• 11:33
  Speaker 1: could be almost UH six point five billion from the States,
• 11:39
  Speaker 1: so basically the government would step in covering most of
• 11:43
  Speaker 1: the capital shortfall. What about the bond holders? Will the
• 11:47
  Speaker 1: bond holders end up with any value if the bank
• 11:51
  Speaker 1: receives this injection of capital from the Italian government. The
• 11:57
  Speaker 1: bond holders could say could save parts of their investments,
• 12:01
  Speaker 1: but they will most definitely their loss in this case. UM.
• 12:07
  Speaker 1: Both the state and the ECB, especially in an interview
• 12:11
  Speaker 1: with the CB supervisory board member Angeline earlier today, saying
• 12:15
  Speaker 1: that yes, the bond holders also have to to chip
• 12:18
  Speaker 1: in into into the shortfallen and and basically combine their
• 12:24
  Speaker 1: efforts with the state. What is the state of the
• 12:27
  Speaker 1: bank's liquidity right now at the moment, The ECB said
• 12:32
  Speaker 1: that the bank is still solvent, which is definitely good
• 12:36
  Speaker 1: news for for the market, for investors and for those
• 12:39
  Speaker 1: following the story closely. UM, But the liquidity has been
• 12:44
  Speaker 1: deteriorating very quickly and the ECB mentioned in particular what
• 12:48
  Speaker 1: happened in terms of liquidity degrees during the month of
• 12:52
  Speaker 1: December and the days before. So it has been a
• 12:55
  Speaker 1: liquidity deterioration, quite sudden, quite fast, in the run up
• 13:00
  Speaker 1: to to to the latest news that we just we
• 13:02
  Speaker 1: just discussed KIA. It's worth noting that not all Italian
• 13:07
  Speaker 1: banks are facing the kind of pressure that Monte Dipaski
• 13:11
  Speaker 1: is facing. Correct. Correct, Not only Italian banks are in
• 13:15
  Speaker 1: the same condition, and Montepasky is definitely the bank which
• 13:19
  Speaker 1: is in the weakest position, but most or several other
• 13:24
  Speaker 1: banks are also feeling the pressure of non performing loans,
• 13:30
  Speaker 1: a burden that overall is about three hundred and sixty
• 13:33
  Speaker 1: billion for the country, and other banks are expected to
• 13:37
  Speaker 1: also seek the aid of the funds that was approved
• 13:41
  Speaker 1: by the government. Has there been any reaction to a
• 13:44
  Speaker 1: plan to put all of the bad loans into a
• 13:47
  Speaker 1: bad loan bank and be able to ring fence the
• 13:51
  Speaker 1: problems here Again, the issue is the European Central Bank,
• 13:56
  Speaker 1: which is monitoring closely what is going on with with
• 14:00
  Speaker 1: Monteparsky and UM. The plan that was advised by by
• 14:04
  Speaker 1: GPE market until a few weeks ago, a few days
• 14:08
  Speaker 1: actually go Um also looked into this possibility, but that
• 14:13
  Speaker 1: was set aside for the moment. What happens over the
• 14:17
  Speaker 1: next week or so. Are there meetings between the Italian
• 14:21
  Speaker 1: government and European Central Bank officials or they everyone just
• 14:25
  Speaker 1: taking a break. The contexts are are still ongoing, and
• 14:30
  Speaker 1: the fact that UM that the ECB responded to the
• 14:34
  Speaker 1: letter and Montepasky send out a statement on on a
• 14:38
  Speaker 1: day that is actually a holiday in Italy is a
• 14:41
  Speaker 1: signal that everyone is still very much UM at the table,
• 14:46
  Speaker 1: even if, of course UM that there is a festive break.
• 14:51
  Speaker 1: At the same time, it is likely that things are
• 14:54
  Speaker 1: going to slow down until the new year and and
• 14:57
  Speaker 1: more clarity is found between those the record discussion. Thank
• 15:01
  Speaker 1: you very much. Giara alban Asi, markets reporter for Bloomberg News,
• 15:05
  Speaker 1: reporting from Rome going up against Verizon and a T
• 15:22
  Speaker 1: and T. Some would think it is suicidal, but not
• 15:27
  Speaker 1: David Glickman. He is the chief executive of Ultra Mobile
• 15:30
  Speaker 1: and he's here to tell us more about the company
• 15:33
  Speaker 1: and its battle in the mobile phone business. David Glickman,
• 15:36
  Speaker 1: thank you very much for being with us. Thank you
• 15:39
  Speaker 1: all right, So you are serial entrepreneur, as I understand
• 15:42
  Speaker 1: it you you previously found it TelePacific that was back
• 15:45
  Speaker 1: in and that was to compete with landline phone exchanges.
• 15:51
  Speaker 1: Now you're going after mobile operators. Tell us about how
• 15:54
  Speaker 1: Ultramobile works. UM. Ultramobile is a nationwide mobile carrier, and
• 16:01
  Speaker 1: we uh, we have stores and offices all around the country. Uh.
• 16:07
  Speaker 1: And we assume that everybody has their own mobile phone handset,
• 16:12
  Speaker 1: and we offer sim cards uh to put in your
• 16:15
  Speaker 1: existing phones, very much like they do in Europe and
• 16:18
  Speaker 1: in Asia, just hasn't come to America just yet, um,
• 16:22
  Speaker 1: in full force, and we are making that happen. Well, David,
• 16:25
  Speaker 1: how is it possible that you are able to compete
• 16:28
  Speaker 1: against the likes of Verizon, A T and T T
• 16:31
  Speaker 1: Mobile uh in offering what looks like to be a
• 16:37
  Speaker 1: per month all you can eat mobile fare um. Well,
• 16:43
  Speaker 1: a little something that I like to call coopetition. UM.
• 16:46
  Speaker 1: We we actually purchase network from T Mobile so that
• 16:51
  Speaker 1: we have the same nationwide footprint. UM. And then since
• 16:55
  Speaker 1: we don't spend hundreds of millions of dollars on advertising, um,
• 16:59
  Speaker 1: and we just pass on all the savings to our
• 17:02
  Speaker 1: end users. So uh yeah, So for for nineteen dollars,
• 17:06
  Speaker 1: you can have unlimited talk, unlimited texts, unlimited UH data,
• 17:11
  Speaker 1: unlimited international calling and unlimited international texting. UM. All you
• 17:17
  Speaker 1: need to do is get one of our SIM cards
• 17:19
  Speaker 1: and put it into your phone. Now, in addition to
• 17:22
  Speaker 1: it being as you describe, unlimited, you can also customize
• 17:26
  Speaker 1: the service. Can you explain how that works? Sure? UM?
• 17:30
  Speaker 1: So UM at them at the lower price levels, for example,
• 17:35
  Speaker 1: nineteen dollars, UM, you get unlimited data. You don't get
• 17:40
  Speaker 1: unlimited high speed data. So we have very high speed
• 17:44
  Speaker 1: four g LTE and we give you a chunk of
• 17:48
  Speaker 1: that UM and if you want more, UM, you just
• 17:52
  Speaker 1: pay for exactly what you use UH, and you don't.
• 17:55
  Speaker 1: You don't end up having to pay sixty seventy eight
• 17:59
  Speaker 1: dollars like you do with some of the other carriers. UM.
• 18:02
  Speaker 1: And have you know, ten gigabytes of high speed data
• 18:05
  Speaker 1: if you only use one or two? So this way, UM,
• 18:08
  Speaker 1: you're you're unlimited. But after a certain amount you end
• 18:13
  Speaker 1: up going back to more of a three g UH
• 18:17
  Speaker 1: data and you can upgrade to whatever you want. How
• 18:20
  Speaker 1: did you decide to focus on what you describe as
• 18:24
  Speaker 1: an underserved demographic of the U S consumer market, the
• 18:29
  Speaker 1: foreign born US residents well, uh we uh. I. Basically
• 18:36
  Speaker 1: I've lived overseas. I started my first songing company when
• 18:39
  Speaker 1: I was living in South America and offered discounts to
• 18:45
  Speaker 1: businesses there. And uh, at the same time when when
• 18:50
  Speaker 1: I when living in America, it's so hard to make
• 18:52
  Speaker 1: international phone calls because usually the big mobile carriers want
• 18:56
  Speaker 1: to charge you a dollar a minute tall overseas, or
• 19:00
  Speaker 1: if you want to use the more inexpensive calling cards,
• 19:04
  Speaker 1: it's the pain. You have to dial and access number,
• 19:06
  Speaker 1: punch in your pin number, then punch in the destination number.
• 19:10
  Speaker 1: If you're on a smartphone, if somebody calls you, you
• 19:13
  Speaker 1: can't just hit reply and call back. Um. And so
• 19:16
  Speaker 1: we decided that we wanted to come up with a
• 19:19
  Speaker 1: system that employed either free international calls or inexpensive you know,
• 19:25
  Speaker 1: calling card rates on. Uh, it's not it's not free
• 19:29
  Speaker 1: in the sense that you do have to actually buy
• 19:31
  Speaker 1: the card. Correct. Well, I mean you've got the you've
• 19:36
  Speaker 1: got a twenty, you've got a plan thirty four dollar
• 19:40
  Speaker 1: and thirty nine dollar and so on. I mean you
• 19:42
  Speaker 1: have to actually buy the buy the card. Right. So,
• 19:45
  Speaker 1: so what a saying is international is free on a
• 19:48
  Speaker 1: discounted mobile phone so instead of paying six yr seventy
• 19:51
  Speaker 1: dollars for unlimited talking text and UH in the US
• 19:55
  Speaker 1: for nineteen dollars, you have UM. You're you're getting a
• 19:59
  Speaker 1: discount on limited domestic talk in text. But at the
• 20:02
  Speaker 1: same time, we give you sixty countries to call about
• 20:06
  Speaker 1: two thirds of the world for free, so you can
• 20:08
  Speaker 1: call Mexico unlimited, you can call China unlimited, Canada unlimited,
• 20:12
  Speaker 1: Europe unlimited. UM. It's sys some countries that are more expensive,
• 20:16
  Speaker 1: for example, some of the African countries calling Philippines, etcetera, etcetera,
• 20:21
  Speaker 1: where we will charge you, you know, two or three
• 20:24
  Speaker 1: four cents a minute instead of UM. What the what
• 20:27
  Speaker 1: the large carriers will charge a dollar a minute. What's
• 20:30
  Speaker 1: the incentive for the stores to sell your cards, your
• 20:34
  Speaker 1: simcards versus the SIM cards of more established players like
• 20:39
  Speaker 1: Verizon or A T and T. Well, you know, we
• 20:43
  Speaker 1: focus very heavily on the stores as our distribution points,
• 20:47
  Speaker 1: so we make it very easy for them to sell UM.
• 20:51
  Speaker 1: We offer a great product to the consumers, so they know.
• 20:54
  Speaker 1: The consumers are gonna be very happy when they get
• 20:56
  Speaker 1: an ultramobile SIM cards and we offer one of the
• 21:00
  Speaker 1: highest commissions. You know, Our theory when we launched the
• 21:02
  Speaker 1: company was the customer is going to have the best
• 21:05
  Speaker 1: deal and the store is going to make more money
• 21:08
  Speaker 1: and have happier customers by selling ultramobile. And we've stuck
• 21:12
  Speaker 1: with that in the four years that we've been in business. Now,
• 21:15
  Speaker 1: this idea of offering uh, data saving data your way,
• 21:19
  Speaker 1: this is what they call voluntarily throttling the speeds and
• 21:24
  Speaker 1: the access to various websites or services. How is that
• 21:30
  Speaker 1: working out? Actually it's been succeeded our expectation. Customers absolutely
• 21:36
  Speaker 1: love it. So what happens is, um, you know, if
• 21:39
  Speaker 1: you're on a plan that says says gives you five
• 21:42
  Speaker 1: gigabytes of high speed data, and UH, you go on
• 21:47
  Speaker 1: YouTube and you start looking at a video, and you
• 21:50
  Speaker 1: know as you as you as the video starts to load,
• 21:54
  Speaker 1: and as you start watching it, it's loading much more
• 21:57
  Speaker 1: than you're than you're watching. So if you're you're the
• 22:00
  Speaker 1: seconds into the video, the YouTube is already downloaded UM
• 22:04
  Speaker 1: onto your phone, maybe one minute of that video, UM.
• 22:08
  Speaker 1: And then if you don't choose to watch the rest
• 22:10
  Speaker 1: of that video, it wasn't the one you wanted. You
• 22:12
  Speaker 1: want to go to the next one. Or the next
• 22:13
  Speaker 1: one you ended up paying. You ended up using a
• 22:16
  Speaker 1: lot of your data for video that you never watched.
• 22:19
  Speaker 1: The same thing happens with Netflix. The same thing happens
• 22:22
  Speaker 1: with Facebook, especially because Facebook will automatically uh download and
• 22:28
  Speaker 1: play a lot of videos that you have you haven't
• 22:30
  Speaker 1: even watched yet, or you haven't even you clicked on UM.
• 22:34
  Speaker 1: And so with data mind way, you picked the speed
• 22:37
  Speaker 1: that you want. Essentially you decide how much of that
• 22:41
  Speaker 1: pretty loading you you want. And we've discovered as a
• 22:44
  Speaker 1: lot of our customers that don't like paying for uh,
• 22:48
  Speaker 1: you know, downloading pipe speed data UM for movies and
• 22:53
  Speaker 1: videos that they're not watching. They they get onto the
• 22:56
  Speaker 1: the the data my way, and they picked how much
• 23:00
  Speaker 1: throttling they want and how much how much downloading. Indeed,
• 23:04
  Speaker 1: thanks very much, David Glickman. He is the founder and
• 23:06
  Speaker 1: the chief executive of Ultramobile. Thanks for listening to the
• 23:16
  Speaker 1: Bloomberg P and L podcast. You can subscribe and listen
• 23:19
  Speaker 1: to interviews at iTunes, SoundCloud, or whatever podcast platform you prefer.
• 23:25
  Speaker 1: I'm pim Fox. I'm out there on Twitter at pim Fox.
• 23:29
  Speaker 1: I'm out there on Twitter at Lisa Abramo. It's one
• 23:32
  Speaker 1: before the podcast. You can always catch us worldwide on
• 23:34
  Speaker 1: Bloomberg Radio