It's no secret that wireless providers have been afforded a great position of power, with clientele ranging from pre-pubescent middle schoolers, all the way to established corporations. Walk into any office, you'll invariably see a BlackBerry on each desk. Walk into Chili's on a Friday night and you'll be hard-pressed to find a teenage girl with their phone in pocket, each diligently texting away to peers unseen. As of recent, these same providers have expanded their repertoire to include not only mobile phones, but also wireless internet service for laptops, netbooks, and tablets, as well as landline offerings.
Within the sector, there are four main competitors: Sprint/Nextel (NYSE: S), T-Mobile (FWB: DTE), AT&T (NYSE: T), and Verizon (NYSE/NASDAQ: VZ).
It is important to first recognize that T-Mobile's primary market is, in fact, not the United States. T-Mobile USA was the result of Deutsche Telekom's (parent company of T-Mobile and Europe's largest telecommunications provider) acquisition of VoiceStream, as a means of humbly having a presence to America.
This narrows the competition to three primary carriers. In terms of subscribers, Verizon barely tops AT&T at 93.2 million versus AT&T's 92.8 million. (October '10) Both companies maintain nearly double the subscribers of Sprint, which currently amounts to about 48.9 million. (January '10)
Despite Sprint's attractive offerings, one of which being a completely unlimited plan running $99/month which provides you with unlimited data, calling, texts, and more, the company's coverage could never match that of its larger adversaries. Additionally, Sprint fails to offer features, e.g. mobile television, that its competitors have pioneered in recent years. This consistently renders the company one step behind, which is why many analysts maintain S on their 'hold' list.
AT&T is a company that found its roots in landline telecommunications decades ago. It continues to build upon this early success by adding additional mass-media branches to its portfolio, which include television, broadband internet, and mobile telephone, that came with the indirect merger of Cingular Wireless and AT&T. Some analysts consider this massive (largest non-banking and non-oil based company in the world) company's mobile platform to be in jeopardy with the near-certain release of a CDMA iPhone next Tuesday. This release comes on the back of many customers unsatisfied with AT&T's lack of widespread 3G coverage, and poor call quality. Because of the gravity AT&T's wireless department has on the success its holder, many analysts are slightly bearish on T.
However, many are bullish when it comes to Verizon, especially when considering a long-term position. With the inclusion of both iPhone and iPad, as well as the strong development in 4G coverage, now seems like a promising time to be long in VZ. Look for a very volatile buying period during the next week or so, which will resolve within the coming month. Also look for the bearish movement in price to continue from last week's end until late Monday or early Tuesday.
It's an exciting time to be involved with the mobile telecom sector, so stay tuned for the most up-to-date VZ information!