Verizon Communications Inc.
) has tied up with Cox Communications to offer bundled service
packages consisting of video, phone and Internet in Phoenix and
Las Vegas. Customers will now be able to access video, Internet
and home phone services of Cox Communications and wireless
services with smartphone and tablets from Verizon from either
company through a bundled package.
The two companies collaborated last year to mutually sell
products and services in key markets like Nebraska, Northwest
Arkansas, California, Kansas, the Oklahoma City and Tulsa. We
believe that Verizon's tie ups with various media and cable
companies like Cox Communications add to its brand value and
increase market traction through diversified product
In addition, these alliances also enable the company to expand
its market share in different service categories and enter new
markets without seeking merger and acquisition strategies.
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Apart from key alliances that boost the company's growth, Verizon
is also trying to enhance its existing network capabilities to
offer uninterrupted wireless experience to its customers.
In this context, the company is working on a spectrum acquisition
that can support expansion plans in data services.
The company received the approval from the Federal Communications
Commission (FCC) to buy wireless spectrum from Spectrum Co.,
which is a joint venture between
Time Warner Cable Inc.
) and Bright House Networks for $3.9 billion in Aug 2012. To
raise funds for this transaction, Verizon struck a deal with
) to sell 39 lower 700 megahertz (MHz) licenses to the latter. In
exchange, Verizon received $1.9 billion and Advanced Wireless
Services (AWS) spectrum licenses in five markets.
Additionally, Verizon planned the sale of three separate 700MHz
spectrum blocks to small rural telecommunication firms. We
believe the sale of lower spectrum assets and the consequent
purchase of new AWS spectrum will work in favor of Verizon. The
AWS spectrum holdings will double Verizon's capacity as well as
enable services at a much higher speed and expedite the LTE
rollout, thereby driving data revenues and boosting its
Verizon has a Zacks Rank #3 (Hold).