Upcoming Catalysts

Upcoming Catalysts The company's new "AT&T Next" service gives consumers the option to upgrade to the newest device every 12 months. The service requires no down payment, no activation and no financing fee. It is available on the 4G LTE network and can result in AT&T creating a new untapped reseller market. This will also reduce the subsidies AT&T pays device manufacturers increasing its overall margins. AT&T had roughly 10,000 towers around the US which they have sold to Crown Castle for $4.9 billion This deal will increase cash flows that the company is expected to deploy to expand its 4G LTE network in the US, to expand overseas and also to maintain its dividend yield. AT&T is also said to be looking for acquisition opportunities in Europe with Vodafone being mentioned as a possibility once the deal between Verizon and Vodafone finalizes. Continued expansion of the 4G LTE network allowing the company to offer additional services in different markets. The company expects to expand its 4G LTE network to 400 markets covering some 270 million Americans. AT&T's wireless upgrade now constitutes the majority of the company's capex as it tries to catch up to Verizon which started deploying its 4G LTE network back in 2010. The upgrade is expected to cost AT&T $14 billion in its entirety. Capex per Segment Wireless Wireline 68.98% 52.84% 51.19% 2.63% 3.36% 6.48% 10.55% 1.15% -5.62% -14.69% -20.73% -45.45% 2007 2008 2009 2010 2011 2012 Introduction of new products and services Digital Life to be introduced to 50 markets by the end of 2013. The service will allow consumers to manage home security and automation tools wirelessly over current broadband networks. ARPU for the service has been higher than expected and as an add-on or a standalone service, AT&T expects sales to reach $1 billion once fully deployed. Connected Cars In talks with GM and XM Sirius to provide mobile connectivity to consumers in cars which the company believes could eventually net them $1 billion in revenues. Introduction of the Nokia 1020, a Windows platform smartphone. The device sports a 41 megapixel camera and the price was recently cut by $100 due to Nokia's acquisition by Microsoft. U-verse now accounts for more than 50% of Wireline segment revenues. The service is growing but it is facing allegations that the manner in which the company delivers "PubliC, Educational and Governmental" (PEG) programming conflicts with federal laws. If the Federal Communications Commission (FCC) or any applicable court were to rule against AT&T, it could affect the company's offerings and have a negative effect on the Wireline segment. U-Verse Data & Voice Growth U-Verse Data U-Verse Voice 49.9% 48.0% 32.3% 27.0% 18.3% 19.7% 2011 2012 2013E The company bought back $1.9 billion worth of shares in the 3QFY13 and is expected to make further purchases during the 3rd phase of its 300 million (5% of outstanding) share buyback authorization. This represents 5.5% of total AT&T stock. Next earnings call on Jan 20th 2014. BIDNESS SOURCES: Company Data, SEC filings, Bloomberg Professional Services Etc. DISCLAIMER: Bidness Etc(TM) and related marks are owned by Bidness Etc. Any other trademarks appearing on this website are the property of their respective owners, and are not used to indicate the origin of goods or services offered or provided by Bidness Etc herein orto suggest approval for or affiliation with Bidness Etc.