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AT&T Wins Auction 103, Aims to Boost Network Performance

AT&T Inc. T yesterday announced that it has secured a block of spectrum in Auction 103, conducted by the FCC, which will be instrumental to maintaining its 5G leadership across the industry. Winning spectrum licenses covering more than 99% of the U.S. population, the company now aims to enhance its wireless network for better customer service.

The Dallas, TX-based wireless carrier improved its 39 GHz spectrum position to 786 MHz. Prior to the auction, AT&T acquired 379 MHz of 39 GHz spectrum when it purchased FiberTower for $207 million in early 2018. All 39 GHz licenses held by the company were exchanged for vouchers. The company spent about $2.4 billion in the auction or $1.2 billion net of its vouchers.

When added to the mmWave spectrum AT&T already holds in the 24 GHz band, the company’s average spectrum depth increased to more than 1,040 MHz nationwide. With this newly-acquired spectrum and existing holdings, AT&T intends to build upon capacity to the nation’s largest network. The company’s existing spectrum enabled it to add more coverage in 2019 than any other wireless provider to serve customers and first responders.

On Mar 16, AT&T introduced a 5G network to 20 more markets. The company is now offering access to 5G on its unlimited wireless plans for consumers and businesses in a total of 100 markets across the United States. 5G+ is currently available in parts of 35 cities for customers with compatible plans and devices. Once the network is built with the necessary density for mobile services, fixed services are likely to follow.

Meanwhile, AT&T received the FCC’s Special Temporary Authority to use the additional spectrum to help meet Americans’ wireless broadband needs during the coronavirus pandemic. On Mar 19, the company was granted authority for 60 days to operate in Advanced Wireless Services (AWS)-4 Band spectrum licensed to DISH.

The company is offering free data plans for certain school-issued tablets for 60 days. AT&T waived wireless voice and data overage fees for all customers and expanded eligibility for its low-income Internet program, while offering new program participants two free months of service. It also created a $10-million fund to support distance learning.

AT&T withdrew its plans to purchase $4 billion in stock buybacks to remain flexible during the coronavirus outbreak. The company previously announced that it had entered into an accelerated share repurchase agreement with Morgan Stanley to repurchase $4 billion of stock during the second quarter. However, the contagious disease and its grave impact on the economy have forced the company to reconsider the buyback plan.

Among the factors that could impact its results are the effectiveness of COVID-19 mitigation measures, global economic conditions, consumer spending, work from home trends and supply chain sustainability. These factors could result in increased or lower demand for the company’s products and services as well as impact its ability to serve customers.

That said, it continues to care for employees and enhance network, including nationwide 5G. The investments will help ensure that the company is well positioned when the pandemic passes and economies begin to recover. The company is scheduled to report first-quarter 2020 results on Apr 22, before the opening bell.

AT&T’s shares have lost 7.9% compared with 3.7% decline of the industry in the past year.



AT&T currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader industry are Qualcomm Incorporated QCOM, Viasat, Inc. VSAT and InterDigital, Inc. IDCC, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Qualcomm has a trailing four-quarter positive earnings surprise of 10%, on average.

Viasat has a trailing four-quarter positive earnings surprise of 402%, on average.

InterDigital has a trailing four-quarter positive earnings surprise of 62%, on average. The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters.

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