AT&T Gets FCC Nod for Verizon Airwaves - Analyst Blog

By Zacks Equity Research,

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Leading wireless provider, AT&T Inc. ( T ) has reportedly won the Federal Communications Commission (FCC) approval for buying $1.9 billion worth airwaves from Verizon Communications Inc. ( VZ ). The deal is expected to bolster the company's network capacity in 18 states across the U.S. Reportedly, as a part of this transaction, Verizon is also acquiring airwaves in cities like Los Angeles and Phoenix from AT&T.

Apart from the deal with Verizon,  AT&T also plans to acquire spectrum from Atlantic Tele-Network Inc. ( ATNI ) for $780 million. Further, the company is proposed to take over the largest prepaid wireless operator in the U.S. - Leap Wireless International ( LEAP ) - for $1.2 billion.

This acquisition will also give AT&T control over Leap's spectrum in the PCS and AWS bands covering 137 million people, thereby enhancing the spectrum base of the former. AT&T plans to use the unutilized spectrum of Leap to expand its 4G LTE deployment, rendering more capacity, better network connectivity and increased mobile Internet usage.

AT&T's LTE network serves as the benchmark of mobile technology and the life-blood for operators across the world. The company is running ahead of schedule to deploy 4G Long-Term Evolution (LTE) services. The company currently covers about 225 million users with the services and expects to connect 270 million people by 2013 end.

Further, AT&T, through its Project Velocity Internet Protocol (IP), will invest $14 billion in the coming three years to considerably expand the wireless (investment of $8 billion) and wireline (investment of $6 billion) IP broadband networks.

The company targets to extend the 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.

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

ATLANTIC TELE-N (ATNI): Free Stock Analysis Report

LEAP WIRELESS (LEAP): Free Stock Analysis Report

AT&T INC (T): Free Stock Analysis Report

VERIZON COMM (VZ): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: ATNI , IP , LEAP , T , VZ

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