Some consumers may be a little scared about a speculation and the negative news about AT&T (NYSE:T), and I would never imply that they should not show an apprehension about the company's attitude to the customer. However, AT&T also has its share of the commendable stories on its customer service. One of them is the recent announcement that it has added Baby TV on its U-verse TV. This should enable AT&T to maintain its claim that it is a customer-friendly network. The launch will help AT&T to compete with Google (NASDAQ:GOOG) in Kansas City and the other markets. I believe AT&T will improve its revenue by 1% based on this and the other positive developments.
The speculation is that AT&T and Verizon (NYSE:VZ) may soon charge their existing customers more fees for their service. The fewer number of the new customers means both companies are deprived of an additional revenue. Both companies have to charge the existing customers to balance their books. The recent Mobility Administrative Fee that AT&T started charging is a pointer to this intention. The speculation deserves a customer's apprehension and may make one to choose the other carriers for a wireless service. I know this speculation has not become a reality. But I do know it will have a negative effect on the stocks of the telecoms companies.
However, AT&T is striving hard to be customer friendly. The Baby TV has been launched on the U-verse TV channel. It is a commercial-free project. The development will add AT&T to a growing list of the distributors of the Baby TV. The U-verse subscribers will have an access to a channel that is agreeable to the parents and the children. The initiative will increase the customer satisfaction on the company, as it will portray it as ready to meet the needs of the consumers. A good image for the company is created. This will negate the bad publicity that came with the speculation and translate to an increased revenue.
AT&T is also developing the other new initiatives that will make it profitable. The company announced that the Nokia Lumia 1020 is now available on its network. The phone features a breakthrough camera technology and allows an easy access to the features reserved for the cameras with the convenience of the smartphone. It is the first Window phone to include a free app that enables the consumers to share an image and a video.
AT&T will increase its market share in the mobile sector as its product and service expand. It will be a confirmation that its efforts to satisfy the needs of the customer is succeeding. This will mitigate the bad publicity and enhance the company's future price multiples.
Verizon is also expanding its products and services. This will enable it to overcome the bad publicity arising from the speculation. Verizon has created a new service called Verizon Live. It will be a part of its video-on-demand product and will channel the service via its video-optimized media platform. Meanwhile, the Verizon HTC One moved a step forward when the product passed through the FCC. These developments indicate that Verizon is trying to meet the expectations of its customers. They create a good corporate image. However, with a price to earnings ratio of 27.79, compared with 127.92 for Verizon, and an EPS of 1.29, compared with 0.40 for Verizon, AT&T is not doing badly.
One of AT&T's rivals is also making a progress. Sprint (NYSE:S) announced that the SoftBank's acquisition of the company has been completed. The massive capital infusion from the deal will enable Sprint to strengthen its network. It is important to note that Sprint will keep its current ticker, so it is certainly making an important move with the development.
Sprint is also in the news concerning its Clearwire (CLWR) acquisition, but there is no reason for a concern. Sprint has completed the acquisition, both companies will maintain their current operation. Some say the situation is confusing, but it is not so. However, the investors have to be vigilant. There will be no problem if the organizations carry out their operations in a fair way. With an EPS of -1.37, compared with 1.29 for AT&T, and a gross margin of 43.90%, compared with 59.96% for AT&T, Sprint appears to be a little behind.
I think AT&T will continue making the moves to mitigate the effects of the bad publicity directed against it. The determination to increase its products and the addition of the Baby TV to the U-verse TV should improve the stock in the long run.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.