) is introducing new promotional plans to accelerate smartphone
sales. The company will offer a $100 rebate on the purchase
of a new smartphone in exchange for an older one. The offer is
available on newly launched smartphones like Samsung Galaxy S 4,
Research In Motion Limited
) Blackberry Z10 and HTC One. Currently, these devices come with
a two-year agreement at $199.00 but after the exchange offer,
AT&T customers can avail them at $99.00.
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We believe that the AT&T's current promotional plan will
attract customers and result in higher equipment revenues. In
addition, these measures would enable the company to strengthen
its footprint in the LTE space as most of these new devices
support LTE network usage, which make them attractive in the
current market. AT&T has benefited significantly through
recycling of old devices. According to the company's press
release, customers recycled over 3.1 million phones, a record
number within a week. This also signifies that the acceleration
in smartphone sales has also resulted in higher data revenues for
the company as these support enhanced Internet experience on
AT&T's advanced networks.
Currently, AT&T 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 (HSPA+) technologies. AT&T's LTE networks
serve as the benchmark of mobile technology and the life-blood
for operators across the world. The company is running ahead of
schedule in the deployment of 4G Long-Term Evolution (LTE)
services. The company has, currently, covered about 200 million
with its LTE services and expects to achieve the target of
connecting 90% of 300 million people by 2013-end.
Further, the company is actively working on improving content
services for wireless users. The company introduced its new
cloud-based Content Delivery Network (CDN) platform in Feb 2013.
The attractively priced CDN offers best-in-class digital media
solutions. The company also collaborated with Zynga, a popular
Web-based social gaming company to offer mobile social gaming
options on its Google Android-based smartphones and tablets.
Additionally, AT&T inked a multi-year deal with
The Walt Disney Company
) and entered into a cloud-based video conferencing service
We believe these initiatives would support significant market
penetration in the wireless space. However, the company suffers
constant access line losses, competitive threats, heavy
smartphone subsidies and federal regulations. These could hold
back its prospects.
AT&T retains a Zacks Rank #3 (Hold).