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AT&T, Rank Group Extend Contract

Zacks Equity Research

The U.S. telecom giant AT&T Inc. (T) and privately-held Rank Group recently renewed their networking contract by another three years.

The companies had first entered into the contract in 2008.  Thereafter, AT&T has immensely helped Rank Group to emerge as a top-notch packaging business across the globe. Meanwhile, Rank Group aims to consolidate and standardize all its telecommunications services among its subsidiaries with that of AT&T’s across all U.S. locations.

With the acquisition of Graham Packaging in June 2011, New Zealand-based Rank Group started operating its own data network as a local service provider. The global solutions extended by AT&T enabled Rank Group to integrate the network of all their companies. This brought forward the flexibility to execute managed router services at much lesser operational expenses.

Additionally, international packaging and auto parts business company – Rank Group – also receives mobility solution – that gives competitive mobile voice and data packages along with individual packages for employees – from AT&T.

Both AT&T’s and Rank Group’s teams at United States and New Zealand have worked closely to make the agreement function effectively.

Headquartered in Dallas, Texas, AT&T offers a wide range of communication and business solutions that include wireless, local exchange, long-distance, data/broadband and Internet, video, managed networking, wholesale and cloud-based services.

Recently, the company started selling Apple Inc’.s (AAPL) new iPad Mini to its customers at a reduced price. Customers can get the new iPad Mini at a discounted price from AT&T-owned stores coupled with a two-year data plan.

We believe that AT&T displays a strong growth profile, based on more subscriber accretion, iPhone sales and lucrative business tie-ups. Further, a healthy balance sheet and strong commitment to shareholders’ return make the stock more attractive. However, the persistent access line losses, competitive pressures and the cut-throat pricing environment will likely drag the near-term margins and earnings.

We are currently maintaining our long-term Neutral recommendation on AT&T. The stock retains Zacks#3 Rank, implying a short-term Hold rating.

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