The second-largest U.S. mobile service provider AT&T Inc.’s (T) long-awaited 4G Long-Term Evolution (LTE) wireless network services is ready for a summer launch.
AT&T is pursuing a number of strategies to tap opportunities in the wireless data market and currently operates the nation's fastest mobile broadband network. The company is aggressivelydeploying its high-speed wireless datawith is High-Speed Packet Access Plus (HSPA+) network.
In addition, the company is rapidly expanding Ethernet and fiber to cell sites nationwide and expects that nearly two-thirds of its mobile broadband network will be on expanded backhaul.
Initially, AT&T’s LTE-based 4G services will be available in five cities, namely Atlanta, Chicago, Dallas, Houston and San Antonio. The company also expects to cover 10 more markets in the second half of the year and reach approximately 70 million Americans by the end of 2011. By 2013, AT&T intends to extend its 4G network to the entire American populace.
Further, AT&T is expected to introduce 20 4G devices by the end of 2011 in order to maintain its leadership in smartphones and devices. The company will deliver an industry-leading Android portfolio, including more than 12 new devices. In the first half of 2011, AT&T plans to feature a best-in-class portfolio of HSPA+ devices and in the second half, it targets adding LTE devices, including a large collection of smartphones, tablets, modems and mobile hotspots.
AT&T is the only company that delivers 4G services using both High-Speed Packet Access Plus (HSPA+) and Long-Term Evolution (LTE) technologies. However, AT&T is well behind to its rivals in LTE network deployment. Verizon Wireless, a joint venture between Verizon Communications Inc. (VZ) and Vodafone Group plc (VOD), rolled out the LTE network in 38 markets reaching around 110 million people at year-end 2010. Verizon plans to expand its LTE network to more than 75 markets covering 185 million people by the end of 2011 and cover virtually its entire nationwide 3G footprint by the end of 2013.
Sprint Nextel Corp. (S), the third-largest wireless operator, was the first to launch handsets on its nationwide 4G service in 2010.Sprint provides its 4G network in 71 U.S. markets and covers approximately 120 million people. Sprint expects to cover 130 million people by the end of 2011.
AT&T is currently seeking regulatory approval for its proposed $39 billion acquisition of T-Mobile USA that is expected to bolster its network expansion and help in acquiring pending spectrum. Post-merger, AT&T will further expand its 4G LTE technology to almost 97% of the U.S. population. Further, AT&T will become America’s largest mobile phone company surpassing the present leader, Verizon Wireless.
We are currently maintaining our long-term Neutral recommendation on AT&T with the Zacks #3 (Hold) Rank.
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