) has reportedly edged out
Verizon Communications Inc.
) to secure
General Motors Company
) contract for providing wireless connections to 2015 car models.
AT&T will be the wireless service provider for General
Motors' OnStar service, which connects drivers to live operators
for directions or help during emergencies. Since 1996, Verizon
has been the service provider for OnStar and will continue to
remain so for any model launched before 2015.
The OnStar deal is another feather in AT&T's cap. AT&T
is already into similar agreements with other automobile
Ford Motor Co
) and Nissan Motor Co. However, the company claims that the
OnStar contract is the biggest in its history that will likely
translate into significant financial synergies. OnStar customers
are expected to subscribe to AT&T's shared data plan that
allows single account operation through multiple devices.
AT&T - the largest provider of wireless services in North
America - is experiencing strong momentum in wireless businesses.
Continued strength in smartphone and branded computing device
sales are fueling growth in the wireless sector.
The company boasts the best Internet speeds in the industry as
it is the only U.S. carrier that provides 4G networks through
both Long Term Evolution (LTE)and High-Speed Packet Access Plus
The company's LTE networks serve asthe benchmark of mobile
technology and the life-blood for operators across the world. The
company is on track to deploy 4G Long-Term Evolution (LTE)
services as early as possible and achieve the target of
connecting 250 million people by 2013-end and 300 million people
by year-end 2014.
However, risk factors such as a saturated wireless market,
persistent losses in access lines, labor union issues and
aggressive pricing plans of direct competitors are likely to
weigh on the company's revenues and margins in the near to medium
AT&T has a Zacks Rank #3 (Hold) rating.
FORD MOTOR CO (F): Free Stock Analysis Report
GENERAL MOTORS (GM): Free Stock Analysis
AT&T INC (T): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
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