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AT&T Offers Roaming to UK Travelers

T AMX VZ RCI

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AT&T Inc. (T - Analyst Report) has reportedly collaborated with digital communications company, EE for providing roaming services to its customers while traveling in the UK.  Besides expanding roaming services in Canada in partnership with Rogers Communications Inc. (RCI - Analyst Report), AT&T remains one of the first to expand LTE roaming in the U.K. for U.S. travelers.

We believe the new agreement with U.K. based EE will not only add facilities for the existing customers but will also foster customer addition.

According to news reports, EE’s share in the U.K. 4G business remains significant as its coverage spans 160 markets. As a result, we expect AT&T customers to benefit from the deal, resulting in additional revenues from roaming services. Further, the move signifies the company’s effort to grow beyond a highly mature and competitive wireless market in the U.S.

In Sep 2013, the company announced plans to expand in the Latin American market through tie-ups with leading Latin American telecom carrier – America Movil (AMX - Analyst Report).

AT&T now expects to extend beyond key markets like Mexico and Brazil to countries like Costa Rica, the Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Nicaragua, Paraguay, Peru and Uruguay. The company is already  in a network sharing agreement with America Movil. Per this agreement, AT&T its network within Latin America and offshore key markets throughout the world, including growth regions like Asia and the Middle East.

We believe AT&T's strategic alliance with America Movil to grow in South America was in response to Verizon Communications Inc.'s (VZ - Analyst Report) intention to step into the Canadian Telecommunication market. Though Verizon Communications later backed out after acquiring its remaining 45% stake in Verizon Wireless.

Further, AT&T struck a global networking services deal with New Zealand-based Opus International Consultants.

Going forward, we foresee significant revenue sources from AT&T's collaborations with mega carriers in different countries on various services. These deals are expected not only to expand the company's reach beyond its home turf, but also help establish a foothold in the international market and re-brand it as a global wireless operator.

AT&T has a Zacks Rank #3 (Hold).

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