The second largest U.S. wireless provider AT&T Inc. (T) intends to launch three new 4G phones from Samsung and HTC.
Focus S and Focus Flash from Samsung and HTC Titan are slated for a fourth quarter release. The handsets will operate on Microsoft (MSFT) Windows Phone 7.5 Mango software.
Additionally, AT&T plans to upgrade its existing Windows Phone 7 devices to Mango this fall. This would make the company the first carrier to update its existing phones.
AT&T currently delivers 4G services using High-Speed Packet Access Plus (HSPA+) technology and plans to roll out Long-Term Evolution (LTE) technology by the end of 2011. Initially, LTE services will debut in five cities, namely Atlanta, Chicago, Dallas, Houston and San Antonio. AT&T expects to cover 10 more markets later on reaching approximately 70 million Americans by the year end. By 2013, AT&T intends to extend its 4G network to the entire American populace.
In its 2011 blueprint, AT&T also has the introduction of 20 4G devices, including a large collection of smartphones, tablets, modems and mobile hotspots, in order to maintain its leadership in the related market. The company intends to deliver an industry-leading Android portfolio, including more than 12 new devices.
We believe the network upgrades as well as introduction of new devices will keep the churn rate low with the addition of new subscribers. This would lead to strong wireless revenue growth.
Further, AT&T is expected to enhance its 4G technology mobile broadband services through spectrum licenses that will face intense competition from Apple Inc.’s (AAPL) iPhone. AT&T lost its iPhone exclusivity in mid-February when its rival Verizon Communication Inc. (VZ) marketed iPhone for the first time.
We are reiterating our long-term Neutral recommendation on AT&T. The stock retains the Zacks #3 (Hold) Rank for the short term.
