), the second largest telecom operator in the U.S. after
Verizon Communication Inc.
) has enhanced its U-verse services by adding three Disney
products - WATCH Disney Channel, WATCH Disney XD and WATCH Disney
Junior. Consumers can access these through applications
) iPhone and iPad, Kindle Fire devices or via the Internet by
logging on to WATCHDisneyChannel.com, WATCHDisneyXD.com and
The new offering is in concurrence with the company's multi-year
The Walt Disney Company
) in Jan 2013, for the distribution of Disney's content services
to AT&T's U-verse Television customers. With this tie up,
AT&T aims to promote its bundled services and attract
customers by providing value added services on a single platform.
AT&T enjoys strong momentum in both wireline and wireless
businesses. While continued strength in smartphones is fueling
growth in wireless business, wireline is benefiting from growth
in its U-verse and strategic services. AT&T is the leader in
WiFi (wireless broadband) connectivity with over 30,000 domestic
and 190,000 international hotspots. We believe the addition of
Disney content will fuel growth in U-verse services, resulting in
higher data revenues in the wireline segment.
Further, these services are backed by AT&T's network, which
enjoys the best Internet speeds across 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 (HSPA+)
AT&T initially rolled out LTE networks late last summer that
went on to become the benchmark of mobile technology and the
life-blood for operators across the world. The company's 4G LTE
service is currently available in 103 markets with more than 150
million users in the U.S. It aims to reach about 250 million
people by 2013-end and 300 million by year-end 2014.
We remain optimistic about AT&T's growth prospects given its
subscriber accretion, higher smartphones adoption, LTE mobile
broadband network, iPhone sales and U-verse expansion. These
would in turn lead to revenue growth.
The company's foray into cloud computing and hotel WiFi
businesses is also expected to result in better profitability.
Other positive attributes for the company include a strategic
realignment initiative and a healthy financial profile. However,
persistent access line losses, competitive pressures and
regulatory issues will likely weigh on the stock in the coming
AT&T retains a Zacks Rank #2 (Buy).
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