AT&T Inc. ( T ) - the second largest telecom operator in the U.S. just after Verizon Communication Inc. ( VZ ) - recently announced its plan to build a high-speed fiber optic infrastructure in Austin, Texas.
Implementing such a technology across the region will not only boost its fiber network speed to 1 gigabit per second but will also challenge Google Inc. 's ( GOOG ) threat of deploying fiber Internet service across the same footprint.
Google started to enroll subscribers residing in Kansas City for the fiber Internet and TV service starting at $120 per month. So, it is highly anticipated that AT&T will keep its price quite attractive as compared to Google.
Google Fiber service will offer 1 GB data plan to customers coupled with 1 TB Google drive storage capacity and 2 TB TV recording service. Google's fiber service will start in Austin from the middle of fiscal 2014. However, it is not certain when AT&T will start its high-speed fiber service.
AT&T's Wireline revenues dipped 0.5% year over year to $14.9 billion. AT&T's total video subscribers, which include U-verse TV and bundled satellite customers, touched 8.0 million at the end of the fourth quarter of 2012. Total U-verse TV subscribers reached 4.5 million with the net addition of 192,000 customers.
Hence, we believe that deployment of such a high-speed fiber optic cable technology will not only trigger subscriber growth for AT&T's Wireline segment but at the same time will also drive top-line growth, going forward.
Currently, AT&T Inc. has a Zacks Rank #2 (Buy).
Another telecom company, Rogers Communications Inc. ( RCI ) belonging to the same sector also has a Zacks Rank #2 (Buy).
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