AT&T (T) is hard at work expanding its services around the United States. It's already a major carrier when it comes to mobile phone services, and I expect the company to enjoy marginal growth in its stock price. As shares are already trading at a fairly high price, the stock may not be the best short-term investment. The company is strong, however, and it has had a positive news presence recently. Therefore, I expect the stock price to continue going up, making it an optimal long-term play.
AT&T has made headlines due to the expansion of its Internet and telephone wireless services. For example, AT&T is offering a bird's eye view of many network enhancements in Los Angeles. It will provide this through a new microsite called 'focus: Los Angeles.' Interested readers can visit the site to view the number of improvements that have been made in the area, dating back to January 1, 2011. They can also find out what kinds of enhancements were made and where.
Viewers will find that over 2,600 upgrades have been made in the LA metro area in about a year and a half, including new cell sites, broadband speed upgrades, network connection upgrades, and more. These upgrades will improve cell phone service in the area, increase wireless Internet speeds, and provide some 4G data speeds for compatible devices.
This is a great public relations move for AT&T for two reasons. First off, improved service in a huge metro area like LA can increase revenue, as more people will start to use its improved service. It has also launched sixteen additional microsites for other major metropolitan areas, so this same effect will likely take place elsewhere. As AT&T continues to make improvements in its service and service offerings, the company should see more profits as a result. In addition to the increased revenue, AT&T's microsite will promote the fact that the company offers a great service that will only improve as time goes on. In other words, the microsites are a great advertisement for the company, which will also have a positive impact overall. The good publicity may, in turn, convert more wireless users from other providers to AT&T customers. Once again, this could lead to more success for the company and the stock.
One area where AT&T really jumps ahead of its competition is in its wireless Internet service. AT&T offers the United States' fastest mobile Internet network and offers the largest Wi-Fi network. However, with almost 30,000 hotspots in the United States, and 225,000 worldwide, AT&T is still expanding. For instance, the company is increasing network investments in Calhoun County, Michigan, to improve the mobile Internet coverage on five cell towers throughout the area and support growing demand. This is another good example of the way AT&T is improving its services, and another factor that may, again, eventually lead to more profit and steady growth for the company.
Once again showing its potential for growth, AT&T recently signed a 5-year, multimillion-dollar deal with luxury goods company LVMH. With this deal, AT&T will be in charge of creating a network between 3,500 of LVMH's retail sites. This contract should be very profitable for AT&T, as wireless networks are AT&T's specialty, and the deal creates a link with one of the world's premier brand names.
AT&T continues to improve its variety of available products as well. Sony's (SNE) Xperia ion smartphone will become available through AT&T as of June 24. To keep up with its competition, AT&T needs to continue providing a wide array of products to meet the diverse needs of its customers. Its partnership with Sony is just one more example of how At&T means to accomplish this goal.
AT&T is making headlines on the job front as well. It has announced 240 open jobs in the southern United States, mostly in Florida. What is more, AT&T is garnering more positive press by targeting military veterans for its open positions. The company notes that veterans will be the leaders of tomorrow, work well in teams, and have significant technological training from the military that can be applied to their jobs at AT&T.
In California and Nevada, however, the news is not so rosy. Many landline technicians have walked off the job in protest to AT&T's demands in labor contract negotiations with the Communication Workers of America. union The workers are not officially striking, as they stage only one-day protests, but this is still bad news for AT&T. If the company fails to come to a resolution with the union, this situation could spell trouble for the company. I do not expect AT&T to allow it to get out of hand, however, as management must know what such bad press would mean for the company's image and stock market valuation.
AT&T CEO Randall Stephenson also announced a second piece of troubling news when he stated that some of its mobile telephone markets are running short of spectrum. If these markets do not have enough spectrum, the network will not function properly, and AT&T may lose customers in those areas. While Stephenson did not mention which areas are short of spectrum, he needs to look for a solution. As a result, the company is considering purchasing Verizon 's (VZ) 700 MHz Lower B Block spectrum. If this solution doesn't work, AT&T will have to discover another way to approach its spectrum shortage.
While AT&T has had some recent news that could be potentially damaging to the company, I believe it will gain control of these situations before they make too much of an impact. AT&T's growing and improved networks should bring on new customers, which will help increase revenue and, eventually, the company's value as well. As a result, the company will likely see continued growth of its stock price, which is why I recommend investing in AT&T. As a caveat, investors should keep an eye on the potentially troubling issues I mentioned, however, and be prepared to exit if those situations head south.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.