The Zacks Analyst Blog Highlights: Deutsche Telekom, Verizon Communications, Vodafone Group, AT&T and MetroPCS Communications

Zacks

For Immediate Release

Chicago, IL – June 27, 2012 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Deutsche Telekom (DTEGY), Verizon Communications Inc. (VZ),  Vodafone Group Plc (VOD), AT&T Inc. (T) and MetroPCS Communications,Inc. (PCS).

 

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Here are highlights from Tuesday’s Analyst Blog:

 

Verizon, T-Mobile to Swap Spectrums

 

Spectrum purchase has become a wireless game changer. The carriers are in need of additional airwaves to expand their high-speed services and support 4G LTE mobile broadband services. As a result, the wireless industry is intent on tapping unused spectrums to expand their capacity in 2012.

The U.S. wireless leader Verizon Wireless plans to swap radio spectrum from the fifth largest wireless service provider T-Mobile USA, a unit of Deutsche Telekom (DTEGY). Verizon Wireless is a joint venture of Verizon Communications Inc. (VZ) and Vodafone Group Plc (VOD).

Per the deal terms, T-Mobile will gain access to spectrum covering 60 million Americans in exchange for spectrum covering 20 million Americans and an undisclosed cash amount.

The deal would be beneficial to both companies, enabling them to expand the roll out of 4G LTE networks and improve their coverage. Notably, the transaction would boost the T-Mobile spectrum position in 15 out of the 25 markets, Philadelphia, Washington, Detroit and Seattle in particular. It would make T-Mobile a strong competitor against larger rivals such as AT&T Inc. (T).

The proposed deal is awaiting the Federal Communications Commission’s approval, which is expected in late summer. The sale of airwave licenses will also depend upon the regulatory approval of the three pending spectrum deals. These pending deals, announced last year, are facing stiff opposition, in particular from T-Mobile, MetroPCS Communications,Inc. (PCS) and 10 other public interest groups. They argued that the purchase would lead to the concentration of spectrums in the hands of Verizon, which is already the largest U.S. mobile service provider with the maximum number of licenses.

The deal would also allow the cross selling of each other’s products and services, and raise concerns among some politicians and consumer advocacy groups. In order to gain regulatory approval, Verizon is aggressively looking for the sale of its 700 MHz A and B spectrum licenses.

Since the company’s spectrum deals are interrelated with each other, we will be carefully watching how it all unravels for Verizon. As a result, we are maintaining our long-term Neutral recommendation on Verizon. Currently, the stock retains the Zacks #2 (Buy) Rank for the short term (1–3 months).

 

 

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Read the analyst report on DTEGY

Read the analyst report on VZ

Read the analyst report on VOD

Read the analyst report on T

Read the analyst report on PCS

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