The second-largest wireless carrier in the U.S., AT&T (T) recently launched its high-speed 4G Long Term Evolution (:LTE) services in six new cities namely Albuquerque, N.M.; Reading, Penn.; and Salt Lake City, Utah.
Higher adoption of smartphones and tablets has increased the demand for much faster network services. Moreover, the new launch of 4G LTE-based iPhone 5 (AT&T is the highest selling carrier of iPhone 5) will further accelerate the bandwidth requirement for AT&T going forward.
So, in an attempt to meet the increasing subscriber demand as well as to compete with early movers like Verzion Communications Inc. (VZ) and AT&T’s close rival Sprint Nextel Corp. (S), the company is continuously extending its 4G LTE technology across the U.S. markets.
Earlier, AT&T just like Sprint has set a target to roll out its 4G LTE service across 100 cities in the U.S. by the end of 2012. The company has not only met its target but is currently offering the new service in 109 cities across the nation. Over the last five years, AT&T has invested more than $115 billion (inclusive of spectrum and other asset acquisition) on its wireless serviceand also plans to invest $14 billion more to boost up its network by 2015.
In the recently concluded quarter, AT&T reported huge customer addition of 1.3 million wireless customers totaling 105.2 million wireless subscribers compared to its close rival Verizon Wireless, which added 1.2 million wireless subscribers, totaling 94.2 million wireless subscribers. Consequently, AT&T is making fast progress in rolling out its LTE service to catch up with its close rival Verizon Wireless, which has already deployed its LTE technology in more than 440 markets in the U.S. Moreover, Sprint has also set a target to take its tally to 115 markets by the next few months, thereby increasing competition going forward.
We maintain our long-term Neutral recommendation on AT&TInc.Currently, it has a Zacks#3 Rank, implying a short-term Hold rating on the stock.
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