As tablet PC usage rises, U.S. telecom giant AT&T (
) could see a sharp rise in its revenues from wireless data
customers. AT&T competes mainly with Verizon (
) and Sprint Nextel (
) in the U.S. wireless market.
We see a potential upside of nearly 11 % to our
$37.91 stock price estimate for AT&T
if the company's average revenue per user (ARPU) of mobile data
reaches $40 a month by the end of our forecast period, rather than
the $28 a month that we currently forecast. Our analysis follows
In a recent
interview with Bloomberg News,
AT&T Mobility CEO Ralph de la Vega noted that AT&T is
looking to capitalize on the tablet revolution that began with the
launch of Apple's iPad earlier this year. ""There's going to be a
huge number of tablets, different sizes, different functions," de
la Vega said.
) plans to unveil a tablet for enterprise customers in early 2011.
) has already released its Streak tablet. Hewlett-Packard (
), LG, Motorola (
), Samsung and others have tablets in the works as well. It seems
plausible that these devices will drive a surge in wireless data
usage as networks get faster and devices grow more
Impact on AT&T
We currently estimate that AT&T's ARPU from data will grow
from an estimated $14.50 per user per month in 2009 to just
over $28 by the end of our forecast period.
However, the advent of tablet PCs running on speedy 4G networks
should encourage users to consume more data on cellular networks
like that of AT&T. In this scenario, we think AT&T's data
ARPU could reach $40 by the end of our forecast period, yielding an
11% upside to our stock price estimate.
You can see
the complete $37.91 Trefis price estimate for
AT&T's stock here.