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. In addition, customers would
be given a new $100 prepaid Visa debit card upon subscribing to
the packaged services.
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. With
regard to this arrangement, the companies launched their bundled
services in Phoenix and Las Vegas early this year.
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 portfolios.
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.
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
The company also has 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. 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).
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