Verizon Wireless of
Verizon Communications Inc.
) emerged winner in the RootMetrics network performance study.
According to a six-month review by RootMetrics, Verizon Wireless
scored 89.7 in a scale of 100 for its network speed, call
quality, and data and text messaging services.
) came a close second with a score of 86.2, while
T-Mobile US Inc.
) scored 68.2 and 64.3, respectively. Leading performance metrics
in the wireless business are accretive to the company's
subscriber base and offers a competitive advantage.
Verizon has a strong foothold in the wireless business and
continues to capture additional market share via robust
deployment of the 4G Long Term Evolution (LTE) network. This
leads to improved operating and capital efficiency. The company
is leading the industry in terms of 4G deployment. As of Dec 31,
2013, it covered 500 markets and more than 305 million
A study conducted by RootMetrics last year showed AT&T
as the clear winner in the LTE speed test. The carrier had
an LTE-only download speed of 18.6 Mbps and an average upload
speed of 9 Mbps. Maximum download speed was around 57.7 Mbps and
maximum upload speed averaged 19.6 Mbps. For Verizon, the tests
showed download speed of 14.3 Mbps and upload speed of 8.5
Maximum LTE speed was 49.3M bps for download and 19.7 Mbps for
upload. However, Verizon continues to supersede AT&T in terms
of market coverage.
While Wireless continues to outperform, Wireline business
still continues to be a drag on Verizon's financials. The
company's wireline division is struggling with persistent losses
in access lines as a result of competitive pressure from
voice-over-Internet protocol (VoIP) service providers and
aggressive triple-play (voice, data, video) offerings by the
cable companies. These are weighing on the company's revenues and
In order to make it profitable, Verizon is making significant
investments and is streamlining its cost structure. It remains
unclear if and when a reasonable return can be achieved from such
investments. Further, Wireline revenue trends would remain
challenging over the next couple of quarters due to the company's
actions to improve profitability. The product rationalization and
process simplification initiatives would dilute profits in the
Verizon currently has a Zacks Rank #3 (Hold).
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