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AT&T Woos Austin with New Network

Zacks Equity Research

AT&T, Inc. (T) announced that it is set to provide all fiber Internet network facility in Austin covering a broadband speed 1GB per second. Alongwith advanced TV services, the company is planning to offer its U-verse services powered by GigaPowerSM, representing one of the fastest Internet services in the city.

AT&T plans to take up U-verse to 10,000 customer locations across Austin with further expansions expected through 2014. AT&T announced it would work with government authorities to develop more fiber network platforms in Austin that complements the city’s technology ecosystem. The company’s new initiatives of offering U-verse with GigaPower remain part of its multi billion program- Project Velocity IP (VIP).

In Project Velocity IP, 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 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.

Further, AT&T is looking at opportunities to improve its growth profile through a number of strategic initiatives. The company plans to woo customers with early upgrades to smartphones and tablets every year. The carrier also started offering a new device upgrade service called AT&T Next that will allow subscribers (both new and existing customers) to change their old smartphones or tablets every year without any upgrade fee or down payment. Further, AT&T struck a deal with New Zealand based Opus International Consultants to render global networking services.

AT&T currently has a Zacks Rank #3 (Hold).

Other Stocks

Hawaiian Telcom Holdco, Inc. (HCOM), with Zacks Rank #1 (Strong Buy), BT Group plc (BT) and Portugal Telecom, SGPS S.A. (PT), both with Zacks Rank #2 (Buy) are the three stocks which we believe are worth considering for investment.

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