The second-largest U.S. mobile service provider
AT&T Inc.
(
T
) will sell
Nokia Corporation
's (
NOK
) "Lumia 900" smartphone from April 9 onwards. The handset will be
available for $99.99 with a two-year contract.
AT&T is the first ever carrier to offer 4G LTE
Microsoft Corporation
(
MSFT
) Windows Phone and has the exclusive right to sell the product.
The company will also sell another Windows Phone - HTC Titan II -
from HTC Corp for $199.99.
The devices will offer mobile broadband speeds up to 10 times
faster than 3G.
AT&T is already riding high on
Apple Inc.
's (
AAPL
) iPhones (4 and 4S),
Google Inc.
's (
GOOG
) Android as well as LTE handsets, which are driving smartphone
sales, leading to subscriber accretion and reduced churn. AT&T
launched three new BlackBerry smartphones--Bold 9900, Torch 9860
and Curve 936 and three 4G LTE-capable smartphones--HTC Vivid,
Samsung Galaxy S II Skyrocket and LG NitroTM HD during the fourth
quarter of 2011.
The LTE smartphone portfolio also includes five Android LTE
handsets--Pantech Burst, Sony Xperia ion, Samsung Galaxy Note,
Samsung Galaxy S II Skyrocket HD, and Samsung Exhilarate, and one
Android tablet-Pantech Element. We believe the addition of 4G
devices to the portfolio will boost AT&T's competitive position
relative to
Verizon Communication Inc.
(
VZ
).
AT&T has collaborated with Zynga, a popular Web-based social
gaming company to offer mobile social gaming options on its
Android-based smartphones and tablets. Increased traction of
iPhones and 4G LTE devices is expected to enhance post-paid
wireless ARPU by 2% this year. Additionally, wireless margins are
expected to rebound to the 40% level driven by continued top-line
growth, operating efficiencies, new data pricing plans and the new
handset upgrade policy.
However, AT&T is lagging its largest rival Verizon in
deploying LTE services, which were available to 74 million
Americans at year-end 2011. AT&T expects this coverage to
double by the end of 2012 and deployment to reach to 80% of the
U.S. population by 2013. As of January 23, Verizon deployed 4G LTE
services in 195 markets, covering more than 200 million people.
Verizon expects to expand its 4G network to its entire nationwide
3G footprint by mid-2013.
Nevertheless, AT&T is way ahead of
Sprint Nextel Corp.
(
S
), the third-largest U.S. wireless carrier, which is yet to
introduce its LTE networks. Sprint expects to enter into the LTE
arena by mid-2012.
We prefer to maintain our long-term Neutral recommendation on
AT&T. The company retains the Zacks # 3 (Hold) Rank for the
short term (1-3 months).
APPLE INC (
AAPL
): Free Stock Analysis Report
GOOGLE INC-CL A (
GOOG
): Free Stock Analysis Report
MICROSOFT CORP (
MSFT
): Free Stock Analysis Report
NOKIA CP-ADR A (
NOK
): Free Stock Analysis Report
SPRINT NEXTEL (
S
): Free Stock Analysis Report
AT&T INC (T): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment
Research