AT&T Inc. (T) announced its network improvement plans to support 4G speeds in Atlanta. The network improvement costs in this region are a part of the $19 billion capital investment in wireless and wireline networks of the company and other capital expenditures in 2011.
The network upgradation program includes: installation of improved backhaul connections to over 450 cell sites to foster 4G speeds and add capacity as well as incorporation of spectrum carriers to over 610 cell sites to support more mobile traffic.
AT&T will also install more than 12 new cell sites and deploy Distributed Antenna System (DAS) networks at 12 cell sites for superior network coverage. Additionally, the company will launch Wi-Fi at Turner Field stadium in Atlanta to facilitate viewers during events.
The company already invested more than $2 billion in its Atlanta wireless and wireline network within 2008 to 2010. Last year, the company’s improvement plans in Atlanta included deployment of 50 new cell sites, enhanced backhaul connections to 33 cell sites to enable 4G speeds, and DAS networks at 8 venues, including one at Turner Field to serve the heavy traffic areas throughout the stadium; upgrading 9 cell sites for mobile broadband as well as adding spectrum carriers to 116 cell sites.
Given the elaborate investment programs, AT&T consistently remains among the top companies in the U.S. in terms of capital investment. Additionally, the acquisition of T-Mobile represents a potential to strengthen and expand its network.
AT&T remains the largest U.S. telecom company and one of the financially strongest in the sector. However, it remains second to Verizon Communications Inc. (VZ), with respect to mobile subscribers following the acquisition of Alltel Corp. in 2009. Additionally, AT&T’s traditional business, fixed-line phone, remains challenged as more customers switch to mobile phones and digital services.
The biggest challenge for the carrier was the loss of iPhone exclusivity to Verizon. The iPhone was the company’s strong revenue generator in 2010. AT&T iPhone business also faces tough competition form Verizon’s Droid smartphones that are based on Google’s (GOOG) widely popular Android platform.
Hence, we remain Neutral on AT&T over the long term, supported by Zacks #3 (Hold) Rank.
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