Verizon Wireless, a subsidiary of
Verizon Communications Inc.
(
VZ
), is expanding its 4G presence in new markets like Vinton County
and Zanesville in Ohio, Northern Kentucky and West Virginia. The
company's LTE expansion into 470 markets, including the new ones,
remains industry leading and a key driver for mobile data
services.
Verizon continues to focus on migrating 3G wireless traffic to
4G LTE. This would lead to improved operating and capital
efficiency. The company continues to expand 4G networks and
expects to reach the entire nationwide 3G footprint by mid
2013.
Additionally, Verizon is seeking the deployment of 4G services
to rural areas using tower and backhaul assets and its 700 MHz
spectrum. To complement its advance network, Verizon is also
seeking to expand its smartphone offerings with the introduction
of devices that would boost data revenue going forward.
Besides, Verizon has adopted a new shared data strategy, which
is considered the biggest innovation in wireless pricing over the
past several years. The new strategy - Share Everything - will
maximize the carrier's long-term revenue, though it could put
pressure on monthly average revenue per user growth in the short
term. All these developments and operating efficiencies are aimed
at bringing in $2 billion in cost savings in the wireless
segment.
Furthermore, Verizon is moving quickly to acquire more
spectrum licenses in order to support its video content and other
data services in the rapidly growing wireless market. The company
bought wireless spectrum from SpectrumCo (including Comcast, Time
Warner Cable and Bright House Networks) and Cox Communications as
wells as other wireless providers such as
U.S. Cellular Corporation
(
USM
) and
Leap Wireless International Inc.
(
LEAP
).
We believe the purchase of new spectrum will double Verizon's
capacity and provide services at a much higher speed, thereby
driving data revenues and boosting its competitive position.
We reaffirm our long-term Neutral recommendation on Verizon.
Currently, the stock has a Zacks #3 Rank, implying a short-term
(1-3 months) Hold rating.
LEAP WIRELESS (LEAP): Free Stock Analysis
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US CELLULAR (USM): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
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