These 3 Growth Drivers Could Propel AT&T Higher
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Improved services, new products, and network expansion continue to be major points of interest when it comes to wireless carriers like AT&T (NYSE: T). The company is continuing to bring in popular new products, and it has been working hard to improve its networks in a variety of areas. In this article, I will show how AT&T's strong focus on new products, improved services, and expansion of its network could make AT&T a great investment now.
The new smartphone will soon be arriving at AT&T, Verizon (NYSE: VZ), and Sprint Nextel (NYSE: S). It is already available through T-Mobile USA, however, so AT&T and its competitors are falling a little bit behind. Regardless, AT&T, Verizon, and Sprint should benefit from the new smartphone once it does come to these companies. This is an exciting release, as Samsung is "kicking off the largest U.S. campaign in history." I think this product will be quite successful, and its release should help AT&T stock go up in the not-too-distant future.
It is not such a problem that AT&T is receiving the phones a little late. It is a slightly bigger problem, however, that the company expected them to arrive on June 21 and had to actually delay the pre-orders. This will decrease customer satisfaction, especially given that this is a major release attracting a lot of publicity. This is a little bit of a blow to AT&T's reputation, and it needs to work to make up for this.
Fortunately, some other actions may help offset this disappointment from AT&T customers. AT&T will benefit from its continued attempts to provide excellent service to specific areas. It has recently improved the capacity and performance of its mobile Internet network in the San Antonio area. Although this costs the company money in the short-term, I think it will pay off greatly over the long-term. While this is a localized event, it certainly helps AT&T maintain a good reputation and will bring in more customers from the greater metro area surrounding San Antonio.
AT&T is also investing millions of dollars to improve the network in the Charlotte area. With the upcoming Democratic National Convention that is planned to take place from September 4th through the 6th, Charlotte will need extra network capacity to handle the additional 35,000 visitors. AT&T has already received positive press surrounding this event, as Steve Kerrigan, CEO of the Democratic National Committee stated "The investments made by AT&T will have a lasting economic and service impact on Charlotte and the surrounding community." I think this kind of press will create positive sentiment surrounding AT&T and boost its stock.
AT&T is only one of many telecom giants improving its services. Twenty-four operator groups are planning to provide customers with better visibility of roaming charges and data usage when traveling abroad. Verizon, AT&T, and Vodafone Group (VOD) are just a few of the companies involved. With the number of charges users can accumulate with mobile phones today, it is important to make it simple for customers to monitor these items. Therefore, these plans show how these companies are improving service in critical ways.
AT&T has recently given its support to Microsoft's (NASDAQ: MSFT) Windows Phone 8 by showing great interest in carrying these smartphones. This support is good for Microsoft stock, as the company needs this to gain a larger market share. T-Mobile USA and Verizon also showed support, but Sprint, Leap Wireless (LEAP), and MetroPCS (PCS) are being a little more hesitant about the phones. I think AT&T stock will benefit from the company's clear support, especially as Microsoft becomes a bigger player in the smartphone market.
Verizon is showing support for Windows Phone 8, and will soon carry the Samsung Galaxy S III, and plans to make the changes with the visibility of roaming charges and data usage. As a result, its news presence appears quite similar to AT&T. It is even improving its network coverage in the Chicago area, so it is also working in localized settings. This is part of a larger initiative for Verizon, as it has plans to "extend coverage in 46 markets and introduce 4G in 22 markets nationwide." Both companies appear very strong at the moment, and I think either would be a good investment.
Some other competitors may be strong investments as well, and I think Vodafone is certainly one of these. In addition to its plans with the visibility of roaming charges and data usage, Vodafone is improving its business by cutting 3G prices. As there is currently much competition over 3G prices in India, this move should be greatly beneficial to the company. The stock should be doing quite well as a result.
Sprint is a company that is not in such great shape though. It plans to pay $19 million to settle a case related to improper charges of customers. This will hurt the company in financial terms, and it will harm its reputation due to the nature of the case. I would not recommend Sprint stock, therefore, at least in the short term.
There are several companies that I believe are good investments at the moment. AT&T and Verizon are quite similar in how they are improving customer service, and I think this will serve them both well. Vodafone has also been doing well, and it too would also make a good investment. These are the three that stand out to me. AT&T has been working on customer service in local areas, improving its general services for those traveling abroad, and showing support for up-and-coming products. Even with a delay in the Samsung release with AT&T, I think the stock is in a great position and should be increasing in the coming quarters.
jewishitalian31 has no positions in the stocks mentioned above. The Motley Fool owns shares of Microsoft. Motley Fool newsletter services recommend Microsoft. 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.If you have questions about this post or the Fool’s blog network, click here for information.
