The second-largest U.S. mobile service provider AT&T Inc. (T) plans to roll out seven new smartphones and a tablet based on the 4G LTE network early in the year. These devices will offer mobile broadband speeds up to 10 times faster than 3G.
The LTE smartphone portfolio includes two handsets from HTC Corp and Nokia Corporation (NOK) that runs on Microsoft Corporation’s (MSFT) Windows Phone software. In this regard, AT&T revealed Nokia “Lumia 900” smartphone, which is expected to hit the U.S. market in the coming months.
The other five smartphones are based on Google Inc.’s (GOOG) massively popular Android software and include Pantech Burst, Sony Xperia ion, Samsung Galaxy Note, Samsung Galaxy S II Skyrocket and Samsung Exhilarate. AT&T will be the first carrier to offer Sony’s first-ever 4G LTE smartphone in the U.S. market, slated to launch in the second quarter. The Android tablet “Pantech Element” will be priced at $300.
The company offers low and attractive prices for these smartphones. The Pantech Burst and the Samsung Exhilarate is priced at just $50 with a two-year contract. AT&T also offers a package deal for the Pantech family, slated for launch on January 22. The Pantech Burst smartphone and Pantech Element tablet will be available at an attractive price of $250 with a two-year contract on each.
AT&T is lagging its largest rival Verizon Communication Inc. (VZ) in deploying LTE services, which is available only in 15 markets by the end of 2011. The company expects to cover 11 additional markets with 74 million Americans this year and the entire American populace by the next.
AT&T started offering LTE network in September 2011 while Verizon started deploying the same in December 2010. Verizon leads the industry in terms of LTE deployments with more than 190 markets covering more than 200 million people as of December 2011. The company plans to expand the reach of its entire nationwide 3G footprint by the end of 2013.
Nevertheless, AT&T is way ahead of Sprint Nextel Corp. (S), thethird-largest U.S. wireless carrier, which is yet to introduce its LTE networks. Sprint expects to enter into the LTE arena by mid-2012.
Besides, the addition of 4G devices to the portfolio will boost AT&T’s competitive position. AT&T is riding high on iPhones, Android handsets as well as LTE handsets, which is further driving smartphone sales, leading to subscriber accretion, reducing churn and, in turn higher wireless revenue.
We prefer to maintain our long-term Neutral recommendation on AT&T. The company retains the Zacks # 3 (Hold) Rank for the short term (1–3 months).
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