Leading wireless provider,
) has reportedly won the Federal Communications Commission (FCC)
approval for buying $1.9 billion worth airwaves from
Verizon Communications Inc.
). 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.
) for $780 million. Further, the company is proposed to take over
the largest prepaid wireless operator in the U.S. -
Leap Wireless International
) - 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).
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