AT&T: Don't Miss This Upswing

Jun.27.12 | About: AT&T Inc. (T)

Some may be under the impression that telecom stocks are unpredictable and volatile, but I do not believe this is the case. Some telecom stocks can actually be good investments, and I believe that AT&T (NYSE:T) may be one of these. If the recent news stories surrounding AT&T are any indication of the stock's direction, it is in a good position to be rising in the future.

AT&T has once again positioned itself as a leader in the industry by introducing its On Demand Interpreter service. The service is the result of an innovative alliance between AT&T and Language Line Services. It will ensure that callers will be connected with interpreters if the need should arise, and these interpreters work with over 170 languages in total. This should help AT&T continue to make an impact on telecommunications services around the world.

This move is a great way of increasing customer satisfaction, and there is a high probability that consumers would gladly welcome the interpreter services. The best part is that AT&T will be able to increase shareholder value because it will surely get an increase in voice calls. This is coming at a time when the rate of voice calls in the industry is becoming less popular, while data usage is on the rise. This is not such a major development, but it will still help AT&T gain an edge in this market.

AT&T has also been named to the "S.A.F.E. 25" stock list on Dividend Channel. This is another small event, but it does show the strength of the stock. It also shows that AT&T is a strong stock in terms of dividends, and this should bring some new investors to the company, which will have a positive impact on the stock.

There are more recent events suggesting that AT&T will have a strong future. Samsung announced that AT&T will be one of the carriers for Samsung's SAFE-branded smartphone. Samsung created SAFE to defragment the Android OS across multiple versions for U.S carriers, making network management easier and optimizing performance. Verizon (NYSE:VZ), Sprint Nextel (NYSE:S), U.S. Cellular, and T-Mobile will also carry this SAFE-branded smartphone.

In a similar development, AT&T has added Sony's (NYSE:SNE) Xperia Ion to its smartphone line. The Xperia Ion will be Sony's first 4G LTE smartphone in the United States, and it will hit AT&T's stores on June 24 at $99.99 per month in addition to a two-year contract. Investors should note the fact that AT&T is working hard at establishing a strong presence in the smartphone market. It has already added several new smartphones this year, and this will ensure that customers have a wide range of products, helping to meet their specific needs.

Not everything is great for the company. AT&T has recently announced that the airwaves it currently owns may not be sufficient to cope with the demand for its mobile services in some locations within the next year. AT&T's Chief Executive Officer Randall Stephenson has claimed, "Our problem is not a long-haul problem-our problem is a today problem." The current legislation has been designed to prevent monopolistic tendencies, and this is making it hard for AT&T to purchase additional airwaves.

We can look at the brighter side, however, and see that an explosion in demand is an indication that AT&T is doing something right and that its customers are pleased with its actions. We can also hope that the FCC will restructure the regulations as soon as possible to allow providers that own unused airwaves to sell these airwaves to providers who can optimize them.

Unfortunately, this is not the only bad news for the company. A large number of AT&T employees in California and Nevada held walkouts last week to protest what they called unfair contract demands. According to the protesters, the move to shift health-care costs to workers and their families is next to sacrilege, as are the reductions in the workers' retirement security.

It seems that tensions on both sides are mounting, as they have been unable to reach an agreement on a new contract for the last two months. In addition, the workers now feel insulted, as a spokesperson said that AT&T is prepared for a strike and has nothing to lose if its workers embark on a strike. On the other hand, this confidence should be reassuring to investors. I think the spokesperson is certainly overstating the case, however, as this strike would still put an additional strain on the company.

On another note, an ex-employee has admitted to supplying company secrets to a ring of network professionals who trade stocks illegally based on stolen information. The employee apparently supplied them with information about Apple's (NASDAQ:AAPL) iPhone and Research In Motion's (RIMM) BlackBerry sales figures. While I do not believe this will have a major impact on the stock, it does raise doubts about the company's reliability and security.

Ending on a positive note, AT&T has earned the Homeland Security's Certification for disaster preparedness. This makes the company the first amongst its competitors to do this. The key point is that AT&T has been recognized for its preparedness and its ability to plan, respond to, and recover from natural disasters and other threats in the fastest time possible.

AT&T has received great publicity for its dividends and emergency preparedness, and it is introducing new products that should continue to bring success to the company and the stock. The bad publicity around AT&T employee relations is minor and should not have a major impact on AT&T stock. Investors should watch closely if AT&T does have a major strike to deal with, but at the time being, it seems to be set for positive movements in the stock market.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.