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AT&T Offers Early Upgrades

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Leading wireless carrier, AT&T Inc. (T - Free Report) plans to woo customers through early upgrades to smartphones and tablets every year. Having gone onboard on Jul 26, the program allows customers to get new phones without paying extra on down payment, activation fee, upgrade or financing fee. New and existing customers due for an upgrade can avail of this offer. 

AT&T is experiencing strong momentum in its wireless businesses. Continued strength in smartphone and branded computing device sales are fueling growth in its wireless business.The company is running ahead of schedule in deploying 4G Long-Term Evolution (LTE) services. The company currently covers about 200 million with the services and expects to achieve the target of connecting 90% of 300 million people by 2013 end.

To support its 4G LTE services, the company offers several 4G LTE smartphones and tablets. Recently, AT&T rolled out a BlackBerry Limited smartphone – BlackBerry Z10 – with the aim of bringing in more customers under its wings. In addition, the company’s Mobile Share plan is gaining popularity among people with nearly 10 million subscribers already under its belt. AT&T intends to launch new high-tier plans in the coming quarters.

However, in the wireline front, the company is experiencing persistent losses in access lines as a result of competitive pressure from voice-over-Internet protocol (VoIP) service providers and aggressive triple-play (voice, data, video) offerings by the cable companies. These are weighing on the company’s revenues and margins.

However, with the company’s efforts to expand its wireline IP network to nearly 57 million customer locations – covering 75% of AT&T’s wireline service area – by the end of 2015 are expected to bode well for this segment. We believe the ongoing investments in wireline IP network expansion will provide AT&T with a high-potential growth platform, leading to higher revenues and improved earnings per share.

AT&T, which operates with telecom players like Verizon Communications Inc. (VZ - Free Report) and Sprint Corporation (S - Free Report) , currently has a Zacks Rank #3 (Hold).

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