Leading telecom giant, AT&T Inc. (T - Analyst Report), will be offering M2M development services and systems integration for enterprise customers in collaboration with Wipro Ltd. (WIT - Snapshot Report). By utilizing AT&T’s M2M application platform, AT&T and Wipro will develop expertise and technical support to deploy low cost M2M services.
By using Wipro’s expertise in systems integration and Internet protocol-based analytic skill, AT&T aims at providing market leading machine integration services across all industry. We believe the new tie up with Wipro remains consistent with the company’s Project Velocity IP program. Under project Velocity, AT&T will invest $14 billion in the next 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 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.
Other positive attributes for the company include a strategic realignment initiative and a healthy financial profile. However, persistent access line losses, competitive pressure from the likes of Verizon Communications (VZ - Analyst Report) and regulatory issues will likely weigh on the stock, going forward.
AT&T, which competes with other industry players like Sprint Nextel Corp. (S - Analyst Report), retains a Zacks Rank #3 (Hold).