AT&T: A good long-term play!!

Mad About Options: Pick Up the Phone! T, S, VZ - TheStreet TV

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This morning I was scouring through a list of stocks and evaluating their recent performance as the market has taken a downward hit to 8100 points on the DOW. Among those stocks I reviewed was AT&T (NYSE: T) which is down about 10% since late April. I am not too concerned because I know AT&T plans to pay a $0.41 dividend this quarter and this is a stock I like for the long-haul. Despite the recent "C-Rating" seen on Charles Schwab, option traders from TheStreet.com also believe AT&T is worth playing the options game on. I am not entirely sure I agree with Jim Cramer's option strategy, but do agree there is some money to be made playing options on AT&T, as well as owning shares of AT&T.



AT&T's recent announcement to close on the acquisition of Centennial Communications Corporation for roughly $940 in the third quarter will continue to strengthen AT&T's bottom line. Including debt, this deal is valued at $2.8B and was supposed to close in the second quarter of this year when the terms were initially agreed upon in November. The Wall, NJ-Centennial, does not own property in Dallas, so there will be no initial impact to that city. However, the only hiccups will be the integration of C-Level Executives between both companies, and the pending approval of the merger being passed by both the U.S. Department of Justice and and the Federal Communications Commission. The acquisition of Centennial (NASDAQ: CYCL) will broaden AT&T's coverage in the Midwest and Southeast US regions, along with Puerto Rico & the U.S. Virgin Islands. Additionally, AT&T will be gaining Centennial's 1M subscribers.

AT&T is a company that has a bright outlook with dividends currently yielding 6.60% and it also shows solid growth momentum from acquisitions such as Centennial. Furthermore, one should own some AT&T shares and consider purchasing some long-term options for when the markets turn around in the future. Happy Investing!!

Video Faceoff! New iPhone vs. Old iPhone vs. Palm Pre

Video Faceoff! New iPhone vs. Old iPhone vs. Palm Pre

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This was an interesting article I found that shows an Analyst, Walt Piecyk of Pali Research, stating that the old iPhone with the new operating system actually may be slower.

As his tests took place on AT&T's network with the WiFi turned off in Midtown Manhattan, he said the biggest surprise was testing the iPhone against the Palm Pre of Sprint Nextel's network.

He found that the Palm Pre offers better versions of YouTube videos, but does admitedly speculate that Sprint is probably compressing these videos.

Enable tethering in iPhone 3.0 - UPDATE

Enable tethering in iPhone 3.0 - UPDATE

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This is an interesting article I found thanks to TechCrunch.com that explains how to tether with an iPhone. I personally do not have an iPhone, but my brother does so I will have him test it out. Anyways, AT&T users shall try this technology phemnon out right now before AT&T decides to charge you an extra fee.

MacMegasite contributed to this awesomeness!!

Long-Distance Merger Deserves Caution

Long-Distance Merger Deserves Caution

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I thought this was an interesting post by Forbes about Telecommunication Long Distance businesses. It discusses the possible merger between Sprint Nextel (NYSE: S) and Level 3 Communications (Nasdaq: LVLT) in a joint venture that could lead to a spin-off of their long-distance network businesses.

This is a lofty expectation considering Qwest (NYSE: Q) has struggled to find a buyer for its long distance fiber optic network. Qwest believes this segment is valued at $2B and was hoping bigger players, such as AT&T (NYSE: T) or Verizon (NYSE: VZ) would make a bid, but that did not happen.

However, there is a small chance of hope, as of late. Sprint's stock has been rallying and many financial guru's have buys on this stock. I, however, would never buy Nextel's stock because I do not agree with the quality of their product. How could I when AT&T, Verizon and T-Mobile have much better coverage? The only reason as an investor to buy Sprint would be in hopes for another buy out or merger. Anyways, that is my sole opinion.

Washington to Question Wireless Companies

Lawmakers have recently been questioning major telecommunication companies such as AT&T (NYSE: T), Verizon (NYSE: VZ), T-Mobile (NYSE: DT), and Sprint (NYSE: S) about two separate issues: Text Messaging Costs and Exclusive Handset Deals.

Issue 1: Text Messaging Costs
CNET reported that since 2005, the cost of text messaging has increased 100 percent from 10 cents to 20 cents for all major Wireless Service Providers.

The reason to increase the rate to text message is unjustified. I would think over time as these Big 4 Wireless Service Providers acquire regional players, the price of text messaging would decrease. We are already seeing the price of unlimited Text Packages decrease, but why not the prices for those without a Text Package? I believe this is because they are trapping consumers into thinking they are getting more for less. By paying $20 for example, consumer do not feel like they have to worry about individual text messages adding up, but over time consumers will text less and the marginal benefit is passed onto these Big 4 Companies. Hence, that is why even though many of these Big 4 Companies stock prices are down from the Market highs in 2007, they are great to have in your Portfolio because they typically yield a comfy 6%+ dividend. They always find a way to make an extra dollar!!

Issue 2: Exclusive Handset Deals
Many Wireless Service Providers have experienced exclusive handset agreements as the Telecommunication industry has evolved. Two recent examples are the Apple iPhone being sold at AT&T, and the Palm Pre being sold at Sprint Nextel.

As consumers often complain about not being able to purchase the gadget of choice because of its offering only on specific networks, Congress has taken notice. John Kerry, Massachusetts Senator, sent a letter to FCC Chairman, Michael Copps on June 17th, 2008, which asked the FCC to examine whether handset exclusivity hampers consumer choice and market competition.

Consumers, especially those whom are tech savvy, oftentimes want the latest gadget. This usually causes them to break a contract, purchase a new phone and ink a new service agreement. Is this good for the marketplace? The cellphone companies generally prefer to sign exclusive agreements with manufacturers to insure the best position in the marketplace for the latest-&-greatest device. Hence, they like consumer competition, but do lose out when their company is not on the right side of the exclusive agreement. For example, AT&T was on the right side of the agreement to sell the Apple's iPhone in AT&T stores, but competitors like Verizon, Sprint, and T-Mobile were not.

The answer is still unknown if Exclusive Handset Deals are the best thing for both consumer choice and market competition. I would argue it only gives the company with the exclusivity rights the edge, and leaves both the competition and consumer out to dry. The competition faces higher churn rates and misses out on sound customer acquisition since Manufacturers are signing these agreements. The customer is the victim too. They are put in a dilemma of constantly switching Wireless Service Providers because the gadget of choice is not offered at their current Wireless Service Provider.

All in all, if one examines this topic from the Consumer and Firm standpoint, both are victims of fierce market competition.

Tethering?

Has anyone heard of the technological phenomenon called Tethering?

Recently, a friend explained to me that I could use Bluetooth or a USB Cable and suck the broadband internet connection from my Blackberry Curve to use on my Labtop. This is ideal for people traveling that want to connect to the internet through their computer rather than through their smart phone.

However, I am more than positive it does not work on all smart phones. When I was on the phone with AT&T recently, the customer service representative said it would work with my Blackberry Curve. Though, my brother explained to me when he stopped by the Apple store over the weekend, that the Sales Consultant said tethering would not work with the present iPhone 3G.

I have not yet tried tethering, but I would speculate that many of the Internet Service Providers do not like the sound of this. If this is the case, these companies face the question of whether to charge consumers for tethering or to lose out on further revenue growth?

AT&T Customer Service - Surprisingly a Good Experience

Last night, I had the fortunate privilege of sitting on the phone with AT&T's Customer Service to help fix my Blackberry Curve's Data Service Connection. I must say it was one of the better experiences I have had involving Customer Service attendants. It is always helpful when speaking to someone domestically, rather than abroad. After speaking with a lady from Customer Service for roughly ten minutes, she determined there were no outages in my area. This led me to be transferred to Technical Support for assistance. In five minutes time, the Technical Lead was able to patch up my phone, and I was on my way.

Yes, my experience with AT&T's customer service went smoothly, but I bet they get millions of these calls per day. Ironically, as I was inquiring about my AT&T internet connection, I had to use my Verizon Wireless phone to touch base. May the recent twitter buzz of poor AT&T service be true? However, as AT&T (NYSE: T) is up 2.92%, and the DOW rally's 1% today, my bet is their agreement with Apple to sell the iPhone has kept them going strong. It does not really matter to me as I own both Verizon and AT&T service. However, as a AT&T shareholder, I hope for the best with AT&T.