Verizon Leads AT&T In Postpaid Smartphone Subscribers

Recent estimates by the Kantar Group, a market research and analytics firm, show that Verizon Communications Inc. (VZ) was leading wireless telecom companies in smartphone sales for the three months ending August 2013. According to Kantar’s estimates, Verizon sold almost 37% of all devices sold in the US market during that period, while its main competitor, AT&T Inc. (T), lost market share.

Changes in market shares of smartphone sales can have major implications for wireless carriers, who are operating in an already saturated market with limited growth options. Smartphones are the largest growth drivers for the wireless industry and their owners use more data and therefore have higher data ARPUs, which is the fastest growing revenue stream for the industry.

AT&T was given exclusive rights to market the iPhone when Apple Inc. (AAPL) released it for the first time in 2007. This was an important privilege for AT&T, as it became the only company authorized to sell and distribute a revolutionary new product that was an instant hit with customers. It was not until February 2011 that Verizon starting selling iPhones on its network, and the device was introduced to Sprint and T-Mobile customers even later than that.

Read More : T - VZ

Battle Of The Dividends – Verizon Vs. AT&T

The telecom industry has continuously evolved and reinvented itself in response to technological advancements. The wireless segment is currently its main source of revenues, and AT&T (T) and Verizon (VZ), two of the largest players in the industry, have expanded their product portfolio accordingly to include a wide variety of products besides their legacy wireline services.

Due to the robust nature of the industry, telecoms have traditionally been a safe haven for investors looking for steady growth and stable dividends. On top of that, telecom stocks also offer immunity from market swings: for example, Verizon’s Beta value is 0.53, compared to AT&T’s 0.69.

Both stocks have a large number of investors from the retirement and pension fund managers’ community. About 57% of AT&T’s outstanding shares are held by institutions, out of which almost 95% are held by investment advisors, pension funds and insurance companies. Institutional ownership in Verizon is about the same, with 59% of its total outstanding shares are held largely by a shareholder base similar to AT&T’s.

Read More : T

Still Bullish On Verizon

Verizon Communications Inc. (VZ), the New York-based telecommunications giant, announced earnings for its third quarter of fiscal year 2013 (3QFY13) on October 17. The company seems to be doing well, and has beat analyst estimates for both revenues and earnings per share (EPS) for the quarter.

Verizon’s per share earnings of $0.78 beat estimates by $0.03, posting 16% growth over the year-ago quarter. In comparison, Verizon’s most significant competitor – AT&T Inc. (T) – posted slower growth of 14.28% year-over-year (YoY) for the comparable period.

Verizon’s total operating revenues grew to $30.28 billion, up 4.4% compared to 3QFY12. Net income from Verizon Wireless totaled $2.23 billion, and is expected to increase going forward as Verizon completes its repurchase of a 45% stake in Verizon Wireless held by the Vodafone Group Plc (VOD).

Read More : DTV - TMUS - TWC

Verizon Beats Earnings in 4Q

Verizon Communications Inc. (VZ), the largest wireless carrier in the country, reported strong earnings and revenues in the fourth quarter of fiscal year 2013 (4QFY13). Investors responded, boosting the stock price more than 1% in pre-market trading. When trading opened the stock price dipped 2% though.

The company reported earnings of $0.66 per share, beating estimates of $0.62. This puts the company’s FY13 earnings at $2.34 per share, up 26.8% year-over-year (YoY). Verizon posted revenues of $31.1 billion beating estimates by $80 million.

Read More : VZ

Verizon Acquires EdgeCast Networks

Yesterday, Verizon Communications Inc. announced an agreement to acquire the Los Angeles-based Content Delivery Network (CDN) company, EdgeCast Networks for over $350 million.

EdgeCast Networks, a provider of networking solutions along with web services and content delivery has been one of the fastest growing technology companies since its inception in 2006. The company specializes in on-demand delivery of data and rich media content and has about 6,000 clients that include Fortune 500 companies. The company is also strategically partnered with Google Inc. (GOOG), Microsoft Inc. (MSFT) and Yahoo Inc. (YHOO).

EdgeCast, which has been profitable over the last four years is largely considered an upstart and was initially funded by the venture arm of Disney. The company, with a current run rate of $100 million has raised $74 million in funding since 2006.

Read More : VZ - T - TMUS

AT&T vs Verizon

The US telecom industry includes companies that provide telephony, cable and satellite television and internet services. The key players in this industry are: AT&T, Verizon Communications, Sprint Communications and T-Mobile US. AT&T has the largest share of the wireless subscriber market with 107 million to Verizon’s 98 million subscribers. However, Verizon leads in the postpaid wireless segment with 93 million subscribers.
Read More : AT&T

OnCue: A Game Changer For Verizon?

Verizon (VZ) has been falling and the stock is down 5% in the past six months. Recently, the company has been showing signs of slowing growth and Verizon Wireless has been the main growth driver. However, the company is looking to increase its presence in another rapidly growing and lucrative segment: Pay-TV services. Verizon is looking to buy Intel's OnCue to add to its pay-TV system. If the deal goes through, it can be a significant growth driver for Verizon.

OnCue

Verizon is currently in negotiations with Intel (INTC) to buy OnCue, an internet based TV system. The deal is expected to go down for about $500 million. This system includes a set of software and an on-screen interface which would allow the customers to access an array of TV channels of their choice and choose from a huge list of movies. Also, the system is equipped with a camera, which would detect the viewer and show programs accordingly.

Verizon could either provide this service to its existing 5.2 million video connections or 5.9 million internet connections. The company could also introduce OnCue as an IPTV service to its 101.2 million mobile customers. An alternative to capitalize on the acquisition of OnCue is to bundle it with the Redbox Instant video service. This service is operated by a joint venture of Verizon and Outerwall and is a separate entity from Redbox. Currently Redbox Instant provides movies only. But if it is bundled with TV programs, it would make a complete entertainment solution for the customers. In the third quarter of 2103, Redbox reported a revenue growth of 7% with its current business. This shows that the market already has potential. If this service is coupled with OnCue, the growth rate could more than double in my opinion.

OnCue: A Game Changer For Verizon?

Studies show that traditional TV customers have been decreasing for about a decade now. Analysts at research firm IHS are of the opinion that there is no light at the end of the tunnel.
Read More :  A Game Changer For Verizon