Verizon Wireless of
Verizon Communications Inc.
) has announced an enhanced offering on its "More Everything"
plan for customers who subscribe to Verizon Edge and minimum 10GB
of data. The company announced a reduction in cost for smartphone
line access from $40 per month to $15 per month.
For customers using 250 MB to 8 GB of data, discounts up to
$10 can be availed on monthly line access using Verizon Edge. We
expect the upgraded service offering to attract more customers
and provide a competitive advantage.
We also appreciate the various strategic initiatives that the
company has taken over the last couple of months. The new
data plan - Share Everything - accounts for almost 46% of its
post-paid base, representing 16.2 million users. Going forward,
this plan is expected to boost the company's device adoption and
usage resulting in a higher number of devices and revenue per
Further, Verizon is riding high on smartphones with the
introduction of devices that would boost data revenues going
forward. During the fourth quarter, the company's smartphone
penetration increased to 70%. It activated 8.8 million
smartphones in the fourth quarter and introduced numerous devices
to attract customers to 4G LTE that covers over 69% of total data
traffic. In addition, the plan to roll out VoLTE is expected to
boost its performance level. The first series of handsets will be
available by the end of 2014.
We believe that these handsets will gradually reduce Verizon's
reliance on CDMA chipsets, leading to lower device cost.
Additionally, voice traffic on LTE will help the company in
refarming its 3G spectrum to accommodate LTE and increase
bandwidth. Further, the company's 4G LTE Router - an Internet
access gadget compatible with both wired and Wi-Fi-enabled
devices - will likely gain popularity in the coming days.
Verizon currently has a Zacks Rank #3 (Hold).
Better-ranked stocks in this sector include
Shenandoah Telecommunications Co.
Nippon Telegraph and Telephone Corp.
). While Shenandoah has a Zacks Rank #1 (Strong Buy), Nippon and
AT&T carry a Zacks Rank #2 (Buy).
NIPPON TELE-ADR (NTT): Free Stock Analysis
SHENANDOAH TELE (SHEN): Free Stock Analysis
AT&T INC (T): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
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