Catching up with the latest smartphone trend, AT&T, Inc. (T - Analyst Report) will be launching the latest Samsung premium smartphone – Galaxy S4 – in Jun 21. The handset will be available for $199.99 on a two-year contract. We believe the latest addition of premium handsets will drive customer additions and upgrades leading to revenue accretion for the company.
This year, AT&T rolled out Research in Motion’s (BBRY - Analyst Report) BlackBerry Z10 with the aim of adding customers. The company in its latest update on its second quarter performance indicated a surge in its wireless business, in particular the post-paid segment, following promotional strategies that it had undertaken. These initiatives resulted in increased smartphone upgrades along with sales. AT&T is now primarily focused on adding devices that mostly support 4G LTE to its equipment portfolio. This is because the company has accelerated its 4G Long-Term Evolution (LTE) and remains ahead of schedule.
The company boasts the best Internet speeds in the industry as it is the only U.S. carrier that provides 4G networks through both Long Term Evolution (LTE)and High-Speed Packet Access Plus (HSPA+) technologies. AT&T’s LTE networks serve asthe benchmark of mobile technology and the life-blood for operators across the world. The LTE expansion of the company is also supported through Project Velocity. Under this project, AT&T will invest $14 billion in the coming three years to considerably expand the wireless (investment of $8 billion) and wireline (investment of $6 billion) Internet Protocol (IP) broadband networks.
The company targets to extend the wireline IP network to nearly 57 million customer locations (including both customers and small businesses) – covering 75% of AT&T’s wireline service area – by the end of 2015. This project underlines the company’s efforts to meet the growing demand for high-speed Internet. We believe that this investment program will provide AT&T with a high-potential growth platform, leading to higher revenues and improved earnings per share over the near term.
AT&T, currently has Zacks Rank #3 (Hold).
Telefonica Brasil, S.A. (VIV - Analyst Report) and TELUS Corporation (TU - Analyst Report) with Zacks Rank #2 (Buy) are two stocks we find worth considering in the telecom sector.