U.S. telecom behemoth AT&T Inc. T recently consolidated its federal, state and local public sector operations into one Global Public Sector organization. Kay Kapoor, the company’s key executive of the federal business division, will head the new organization.
AT&T’s Public Sector sales were nearly $15 billion in 2016. The organization provides advanced information and communications technology services to government and education customers across federal, state, local and international public sector markets. Public sector agencies are increasingly migrating from legacy TDM to IP-based cloud and Ethernet services.
Notably, a consortium led by AT&T was recently selected by First Responder Network Authority (FirstNet) to build and manage the first nationwide broadband network dedicated to America's police, firefighters and emergency medical services. The network will cover all 50 states, five U.S. territories and the District of Columbia, including rural communities and tribal lands in those states and territories. This move can be considered a necessary boost to the company’s profile.
AT&T’s consortium to deploy FirstNet includes Motorola Solutions Inc. MSI, General Dynamics Corp. GD, Sapient Consulting and Inmarsat Government. Importantly, per the deal, AT&T will be able to use this highly valuable spectrum for commercial purposes and consumer services as well.
Meanwhile, AT&T has been quite ahead of other wireless carriers, especially Verizon Communications Inc. VZ, in relation to upcoming 5G wireless network trials and 3GPP standards for 5G. The company is planning to offer standards-based mobile 5G services to consumers from late 2018. Ahead of this, AT&T is also planning ‘mobile-first’ 5G trials in 2017. The second trial is expected to start in Apr 2017 in Austin. AT&T will connect FirstNet users to the company's telecom network assets, valued at more than $180 billion.
Price Performance of AT&T
Year to date, the stock price of AT&T has witnessed negative growth of 2.02%, better-than the Zacks categorized U.S National Wireless industry’s negative growth rate of 3.21% in the same time period.
Nevertheless, AT&T is diversifying its businesses significantly. The company became the largest pay-TV operator last year, after its acquisition of satellite TV behemoth DIRECTV. Moreover, AT&T already has a strong presence in the Mexican wireless market and several Latin American pay-TV markets. The proposed merger with Time Warner will provide AT&T with a portfolio of lucrative contents. We believe substantial diversification in related fields is the reason behind the stock currently carrying a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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