Leading telecom carrier, AT&T, Inc. (T - Analyst Report) is reportedly seeking opportunities in the European continent. According to recent Bloomberg reports, the company is in talks to buy around 29.9% in Telefonica (TEF - Analyst Report). AT&T is also looking to own assets in Vodafone Group Plc (VOD - Analyst Report) as well as digital communications company – EE, one of the largest operators in the UK and a joint venture between Deutsche Telekom AG and France Telecom S.A.
AT&T is eyeing opportunities to improve its growth profile through a number of strategic initiatives. Acquisition being one of them, has played a major role in shaping AT&T’s growth trajectory. In the domestic market, the company entered into an agreement with Verizon Wireless of Verizon Communications Inc. (VZ - Analyst Report) to acquire spectrum licenses. This includes 39 lower 700 megahertz (MHz) licenses, covering 42 million people in 18 states including major territories such as Chicago, Los Angeles and Miami.
AT&T also plans to buy the remaining portion of Alltel’s wireless operations including spectrum licenses, retail stores and network assets from Atlantic Tele-Networks Inc. AT&T aims to enhance its high-speed wireless network to generate more profits from the growing demand for mobile Internet services for smartphones, tablets and other devices.
AT&T is experiencing strong momentum in its wireless businesses. Continued strength in smartphone and branded computing device sales are fueling growth in the wireless sector.
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.
However, risk factors such as a saturated wireless market, persistent losses in access lines, labor union issues and aggressive pricing plans of direct competitors are likely to weigh on the company’s revenues and margins in the near to medium term.
AT&T has a Zacks Rank #3 (Hold) rating.