AT&T Launches Prepaid Plan for Home

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AT&T, Inc. (T) will offer new no contract wireless plans for home connections from Mar 22 onward. Under the new plans, customers can combine their existing home phone and number with AT&T’s wireless network instead of fixed line connections.

AT&T’s wireless home plans benefit customers by offering nationwide mobility with affordable prepaid pricing. We believe AT&T’s strategic move to bring conventional landlines users under wireless services bodes well for its revenue accretion from the otherwise rapidly extinguishing fixed line markets.   

The new prepaid wireless service for homes comes with a variety of plans. This includes an unlimited domestic calling plan for $20.00 per month, $1,000 minutes of international long-distance calling to wireless and fixed lines for $15.00 and a one-time cost for Wireless Home Phone device for $99.99.

The company believes that the broad selection of home plans will not only provide affordability for customers but also enhance customers experience by combining AT&T’s wireless network with the convenience of home phone service.

AT&T the largest wireless service provider followed by Verizon Communications Inc. (VZ), is aggressively following various promotional strategies with new product launches.  This week the company also announced the addition of Microsoft Lync, an enterprise software by Microsoft Corporation (MSFT), to its Unified Communications (:UC) portfolio of services, to attract enterprise market.  In January this year, the company also entered into a cloud-based video conferencing service agreement with Polycom, Inc. (PLCM).

We believe these initiatives coupled with AT&T’s networking infrastructure that combines Long Term Evolution (:LTE) and High-Speed Packet Access Plus (HSPA+) technologies would support significant market penetration in the wireless space

However, the company suffers through constant access line losses, competitive threats, heavy iPhone subsidies and federal regulations that could hold back its prospects.

AT&T has a Zacks Rank #3, implying a Hold rating.

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