Verizon Edges Ahead In US Telecom Turf Wars

Bidness Etc examines the key forces driving the top US telecom companies, does a bull and bear scenario analysis and picks Verizon as the stock to buy

Bidness Etc has already discussed the US telecom industry and specifically the major wireless carriers in the industry. We now analyze some of the key industry drivers and valuation metrics to determine the best possible investment opportunity in the US telecom space. Read more

Verizon Leads AT&T in Postpaid Smartphone Subscribers

Verizon leads the market in postpaid smartphone subscribers with AT&T following close behind.

Recent estimates by the Kantar Group, a market research and analytics firm, show that Verizon Communications Inc. (VZ) was leading wireless telecom companies in smartphone sales for the three months ending August 2013. According to Kantar’s estimates, Verizon sold almost 37% of all devices sold in the US market during that period, while its main competitor, AT&T Inc. (T), lost market share.

Changes in market shares of smartphone sales can have major implications for wireless carriers, who are operating in an already saturated market with limited growth options. Smartphones are the largest growth drivers for the wireless industry. Smartphone owners use more data and therefore have higher data ARPUs, which is the fastest growing revenue stream for the industry. Read more

Battle of the Dividends – Verizon vs. AT&T

Here’s a look at what kind of returns you can expect from investing in the two biggest players in the US telecom industry

The telecom industry has continuously evolved and reinvented itself in response to technological advances. The wireless segment is currently its main source of revenues, and AT&T (T) and Verizon (VZ), two of the largest players in the industry, have expanded their product portfolio accordingly to include a wide variety of products besides their legacy wireline services.

Due to the robust nature of the industry, telecoms have traditionally been a safe haven for investors looking for steady growth and stable dividends. On top of that, telecom stocks also offer immunity from market swings: for example, Verizon’s Beta value is 0.53, compared to AT&T’s 0.69. Read more

AT&T’s LTE Broadcast Service – Tune in to the Future

Is the market ready for what could potentially be the next big thing in television broadcasting?

With data now available at superfast speeds on cellular networks, more and more subscribers are using mobile devices to view digital content, especially online videos. Research conducted by Ericsson’s Consumer Lab has revealed that around 67% of surveyed consumers watch televised programming on mobile devices such as smartphones, laptops and tablets.

In anticipation of that trend, AT&T’s (T) CEO, Randall Stephenson recently announced that the company would revamp the 700 MHz spectrum it purchased in 2010 to provide LTE broadcast services that will enable users to watch digital content on mobile devices. Read more

AT&T's Pension Plastic Surgery: Bad For Pensioners, Worse For Shareholders

This past Tuesday at Goldman Sachs' Communacopia Conference, AT&T (T) CEO Stephenson said the company's pension plan will be "fully funded" at the end of 2013. Stephenson was referring to AT&T's application for exemption from the Department of Labor's ERISA and associated IRC requirements, which is open for comment by stakeholders until November. It proposes to create, value, and issue 320,000,000 of $25 liquidation value preferred shares from its wholly owned subsidiary, AT&T Mobility, to itself.

AT&T will then subsequently contribute these shares to its pension plan. The pension plan will then hold employer securities in excess of the 10% fair market value of assets currently allowed by ERISA. Thus, AT&T will need an exemption similar to those granted to Northwest (which merged with Delta Air Lines (DAL) in 2008), General Motors (GM), and Kaiser Aluminum (KALU) -- all of which have declared bankruptcy. AT&T says it needs to make this contribution because it cannot contribute this amount of cash. Read more

Europe: AT&T’s New Frontier

With few opportunities for growth in the US market, AT&T is eyeing Europe to expand its network and subscriber base

Players in the telecom industry know that the US wireless market has reached a saturation point. With market penetration exceeding 100%, the prospects for future growth are slim, especially with the Department of Justice (DOJ) intent on preventing major acquisitions in the industry.

As the possibilities for mergers and acquisitions within North America diminish, AT&T (T) has started looking for strategic acquisitions abroad. The company has already partnered with Latin American providers (it is a strategic partner and investor in Carlos Slim’s America Movil) and is also looking to expand its network to Central American countries. Read more