AT&T Is Not Yet Free From Verizon And Sprint

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Despite strong competition this year, AT&T (NYSE: T) remains a premier communications holding company and one of the most honored in the world, with a bulk of its market share coming from dominance in the mobile sector. Its subsidiaries and affiliates – AT&T operating companies – are the providers of AT&T services in the United States and around the world. The company is presently trying to grab a larger percentage of the mobile market share by bringing the latest generation of wireless network technology to its customers. Its mobile internet leadership in the United States continues, with solid gains in Smartphone and tablets, and its margin has never been better. It is on target to cover 250 million Americans with its 4G LTE network by the end of 2013 and 300 million by the end of 2014.

AT&T posted third-quarter net income of $3.6 billion, consistent with $3.6 billion in the year earlier. The consolidated revenue totaled$31.5 billion, flat versus the year before. Third-quarter cash from operating activities totaled $11.5 billion, a record for the company. Capital expenditure totaled $4.9 billion. Total wireless revenues, which included equipment sales, were up 6.6 percent year over year to $16.6 billion. Wireless service revenues increased 4.5 percent, to $14.9 billion, in the third quarter.

On the competitor side, AT&T is facing challenges from Sprint (NYSE: S), Verizon (NYSE: VZ), and the privately held T-Mobile. With its exponential rate of 4G LTE rollout, AT&T shares continue to be competitive. But Verizon, with its sheer size and competitive moat, is making matters tough for AT&T. Still, the net income of AT&T stands at $4.44 billion, a little ahead of Verizon at $3.8 billion but clearly out-performing Sprint at $-4.31 billion. The gross margin of AT&T shows 0.55, but Verizon at 0.60 and Sprint at 0.41 are competitive.

AT&T has added a lot of new markets to its LTE coverage, and it now covers more than 150 million Americans. The mobile giant is leaving no stone unturned in its quest to gain more market share. The company has just turned on its 4G LTE network in Bethlehem and Allentown. In April, it rolled out its 4G LTE to 11 cities. In July, 7 new cities got upgrade from ‘faux 4G’ to real 4G and expansion went on other places. The cities with upgrade were Buffalo, New York; Wichita, Kansas; Gainesville; Florida; Corpus Christi, Texas; and Greensboro, Burlington, and Winton-Salem, North Carolina. Greater Cleveland and Charlotte, North Carolina saw expansions where users had faster AT&T 4G LTE as well as better coverage.

Due to the deployment of the LTE network, wireless revenues were up 6.6% year-over-year to $16.6 billion. Wireless service revenues increased 4.5% to $14.9 billion in the third quarter. Wireless data revenues increased by more than $1 billion from the year earlier quarter to $6.6 billion. AT&T reveals that the demand for its Smartphone is encouraging, and its cash position looks very good. Many analysts believe it will continue to capitalize on its terrific momentum in mobile internet. The analysts expect the company to remain profitable in the foreseeable future.


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