Moving Forward Amid Stiff Competition

Naomi is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

In most industries today, you are sure to find situations that are likened to “Clash of the Titans.” In this regard, the telecom industry is not left out as it has notable big names competing with each other. One of my darling companies, Verizon (NYSE: VZ), has found itself in this situation. Rated among the biggest phone companies in the United States, it serves around 25% of the country’s population and the proud owner of a global reaching network. Its Verizon Wireline segment, high quality Internet Access, Digital TV, and local telephone services are provided to a huge customer base, both commercial and residential.

The company does not end there. Report has it that the company’s managed network ranges from telecom to IT services for commercial and government clients in over 150 countries around the world. It would interest you to know that Verizon is not doing all these just for profits. No, these undertakings are mainly geared towards keeping the company abreast of other competitors in the industry, the likes of AT&T (NYSE: T) and Sprint (NYSE: S).

Just recently, AT&T introduced its $5/month movie streaming service, U-verse Screen Pack that is designed for the company’s TV subs. The company announces that there will be media-sharing apps to go with the service. It also introduced Digital Life, a home security/automation service with control panels that were developed by Cisco Systems. This system will help users not only monitor, but also protect and manage their homes. The product is billed to be launched in eight U.S. markets in the month of March and before the end of 2013, it will be launched in up to 50 additional markets.

As for Sprint, it has not been the best of times for the company as its intended acquisition of Clearwire has received a second blow through Crest Financial’s request to the FCC to block the acquisition. Crest is acting on the premise that the deal “grossly undervalues Clearwire." The first blow came from Dish when it petitioned the FCC to give it more time to “file an objection to the deal." With these oppositions, it is surely not going to be an easy merger for Sprint and Clearwire.

Verizon still stands higher chances of maintaining the edge it holds in the telecom industry because over the years, it has proven to be among the companies in the industry that offer attractive dividend yields. It maintains a dividend yield of 4.65% and pays an annual dividend of $2.06 per share. Its dividends have, over the years, continually experienced increases. So, I would say that this company has all it takes to see it through the stiff competition it is facing from AT&T and Sprint, especially considering the fact that it maintains stable dividend along with enticing growth opportunities.

Talking about growth opportunities, you may not have read or heard but the soon-to-be-launched BlackBerry 10, from the stable of Research In Motion (NASDAQ: BBRY), will be available to users through Verizon and AT&T. In as much as the launch of this phone means a lot to the success and continued existence of RIM, which is currently being taunted by many for its lack of innovativeness when it comes to moving with the trend in the smartphone market, it also has growth potentials for Verizon, especially financially. Another area of growth that Verizon is not going to miss out on is the data services segment. Although it would entail heavy capital expenditure, Verizon will bet on it as it is another way of helping the company gain more coverage and extend its network. Competition or not, Verizon is not backing down, especially on growth opportunities.


Chizy has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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