Leading telecom company, AT&T Inc. (
) is reportedly planning to introduce LTE-based media broadcasting
in the US. According to media reports, the company will launch its
own Multicast service in 2015, to compete with Verizon
Communications Inc. (
). Although no official disclosure has been made in this regard, we
believe the prospective new service, which remains complementary to
the company's project VIP initiative, will remain accretive to
revenues and improve market share.
AT&T remains focused on its project VIP initiative, which
targets business expansion. These initiatives target 4G LTE
expansion, spectrum and network capabilities enhancement, 8.5
million new U-verse service customers and the addition of 57
million broadband users, covering 75% of the company's wireline
footprint by the end of 2015. In addition, the company is also
seeking to expand its fiber network to include 1 million additional
customer locations by 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 for revenues and earnings.
Moreover, to support network infrastructure, AT&T acquired
39 lower 700 MHz B Block spectrum licenses from Verizon for $1.9
billion in 2013. In Jan 2014, the company also plans to acquire 49
AWS spectrum licenses from Aloha Partners II, L.P. The licenses
cover nearly 50 million people in 14 states. The transaction is
expected to be completed by the second half of the year. In Dec
2013, AT&T also completed its lease transaction for 9,000
towers and sale of approximately 600 towers with
) for $4.83 billion.
Better-ranked stocks in this sector include Chunghwa Telecom
Co., Ltd. (
) with a Zacks Rank #2 (Buy).
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