The company will be offering iPhone 5S at low monthly installments with a price tag of $199 for the 16GB model, $299 for the 32GB model and $399 for the 64GB model. In addition, iPhone 5C will be offered at $99 and $199 for the 16GB and 32GB models, respectively. We believe AT&T’s latest iPhone offering not only supports increased market traction but also backs the growing popularity of its LTE services.
Apart from iPhones, AT&T rolled out BlackBerry Ltd’s (BBRY) BlackBerry Z10 this year, with the aim of adding customers. In its second quarter, the company experienced a surge in its wireless business, in particular the post-paid segment, following promotional strategies that it had undertaken.
These initiatives resulted in increased smartphone upgrades along with sales. AT&T is now primarily focused on adding devices that mostly support 4G LTE to its equipment portfolio. This is because the company has accelerated its 4G Long-Term Evolution (:LTE) and remains ahead of schedule.
The company boasts the best Internet speeds in the industry as it is the only U.S. carrier that provides 4G networks through both Long Term Evolution (:LTE) and High-Speed Packet Access Plus (HSPA+) technologies. AT&T’s LTE networks serve as the benchmark of mobile technology and the life-blood for operators across the world.
The LTE expansion is also supported by Project Velocity. Under this project, AT&T will invest $14 billion in the coming three years to considerably expand the wireless (investment of $8 billion) and wireline (investment of $6 billion) Internet Protocol (IP) broadband networks.
The company targets to extend the wireline IP network to nearly 57 million customer locations (including both customers and small businesses) – covering 75% of AT&T’s wireline service area – by the end of 2015. This project underlines the company’s efforts to meet the growing demand for high-speed Internet.
We believe that this investment program will provide AT&T with a high-potential growth platform, leading to higher revenues and improved earnings per share over the near term. Further, it also provides with a competitive position against rivals like Verizon Communications Inc. (VZ ).
AT&T currently has Zacks Rank #3 (Hold).