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AT&T Partners Microsoft on 5G, Cloud & AI to Advance Tech

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AT&T Inc.’s (T - Free Report) business segment, AT&T Communications recently announced an extensive, multi-year technology collaboration with Microsoft Corporation (MSFT - Free Report) .

Under this new strategic alliance, the two leading companies will accelerate innovation and apply cutting-edge technologies that include 5G, cloud and AI to transform every aspect of work and life.

Over the past five years, AT&T has invested about $145 billion in wireless and wireline networks including capital investments, and acquisitions of wireless spectrum and operations. Its fiber network, which is one of the nation’s largest, connects more Internet of Things devices than any other provider in North America.

The company is building networks that will enable fiber-based connectivity and LTE to work efficiently in parallel with 5G solutions, making the most of business transformation, alongside opportunities to boost revenues and reduce operating expenses. AT&T’s wireless network covers more than 99% of Americans and is reportedly the fastest in the nation. Its LTE network covers more than 400 million people in North America.

Microsoft will be the preferred cloud provider for non-network applications, as part of AT&T’s broader public cloud first strategy, and support the telecom giant as it consolidates data center infrastructure and operations.

AT&T is on track to become a public cloud first company by migrating most of its non-network workloads to the public cloud by 2024. The company’s efforts will likely allow it to better focus on core network capabilities, accelerate innovation and empower workforce, while optimizing costs.

AT&T will provide the majority of its workforce with cloud-based productivity and collaboration tools available with Microsoft 365. The company has plans to migrate non-network infrastructure applications to the Microsoft Azure cloud platform.

Markedly, AT&T — which was the first to introduce mobile 5G in the United States — expects to deploy a standards-based, nationwide mobile 5G network in early 2020. Microsoft will tap into the innovation that AT&T is offering on its 5G network, including design, test and build edge-computing capabilities.

AT&T’s domestic 5G capabilities together with the global scale of Microsoft’s Azure cloud will facilitate exceptional solutions for mutual customers. The companies will bring to market integrated industry solutions including intelligent edge and networking along with public safety. These already have joint enterprise solutions for networking, IoT and blockchain in the market, and expect to announce additional services later in 2019.

AT&T has long-term earnings growth expectation of 4.5%. Driven by diligent execution of operational strategies, the stock has rallied 16.5% compared with the industry’s growth of 9.8% year to date.



Zacks Rank & Key Picks

AT&T currently has a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the industry include T-Mobile US, Inc. (TMUS - Free Report) and Verizon Communications Inc. (VZ - Free Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

T-Mobile has long-term earnings growth expectation of 13%.

Verizon’s long-term earnings growth is projected at 4.3%.

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