The Zacks Analyst Blog Highlights: AT&T, Verizon Communications, T-Mobile, America Movil and DISH Network

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Nov 25, 2014, 09:30 ET

CHICAGO, Nov. 25, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the AT&T Inc. (NYSE:T-Free Report), Verizon Communications Inc. (NYSE:VZ-Free Report), T-Mobile US Inc. (NYSE:TMUS-Free Report), America Movil SAB (NYSE:AMX-Free Report) and DISH Network Corp. (Nasdaq:DISH-Free Report).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Monday's Analyst Blog:

U.S. Spectrum Bids Break Records, Top FCC Estimate

The ongoing Advanced Wireless Servies-3 spectrum auction conducted by the Federal Communications Commission (FCC) has accumulated a record-breaking $34 billion, breezing past the regulator's initial estimate of a little over $10 billion. In 2008, the FCC conducted wireless spectrum auction had accumulated a total of $19.6 billion.

The AWS-3 spectrum auction, which was initiated on Nov 13, 2014, has received as many as 70 applications. Altogether, 1,614 AWS-3 licenses were up for sale in the 1695-1710 MHz, 1755-1780 MHz and 2155-2180 MHz bands. However, the FCC has yet to declare the name of the spectrum winners.

The aforementioned spectrum bands are highly useful in the deployment of 4G LTE (Long-Term Evolution) services. Major bidders participating in the auction are AT&T Inc. (NYSE:T-Free Report), Verizon Communications Inc. (NYSE:VZ-Free Report), T-Mobile US Inc. (NYSE:TMUS-Free Report), America Movil SAB (NYSE:AMX-Free Report) and DISH Network Corp. (Nasdaq:DISH-Free Report).

Are Good Times Ahead for Telecom?

A large number of bids for AWS-3 spectrum indicate at the good days for the telecom industry. The industry is riding high on the success of high-end smartphone and tablet. Unprecedented growth in high-speed mobile Internet traffic, in particular toward wireless data and video, has transformed the industry into the most evolving, inventive and keenly contested space. Any new network standard aims at faster data connectivity, quick video streaming with high resolution and rich multimedia applications.

Massive bidding for AWS-3 Spectrum clearly indicates that telecom operators are expecting growing demand for mobile data and video services in the long run. The spectrum license winners from different regions will upgrade their respective networks to gain a competitive edge. This in turn will result in increased capital expenditures and soaring demand for the telecom infrastructure gear manufacturers.

According to a research conducted by the GSMA Intelligence, LTE users in the developed countries consume an average of 1.5GB data per month, twofold of what is consumed by non-LTE users. Consequently, wireless carriers' average revenue per user can be 10-40% higher for LTE subscribers than non-LTE subscribers.

Product Innovation

Wireless network standards are continuously evolving around the globe to offer faster speed. After significant growth of the next-generation 4G LTE network deployment, LTE-A (LTE-Advanced) wireless network standard is gradually gaining a strong foothold in the U.S. LTE-A is the more powerful version of the legacy LTE network offering increased speed and network capacity. Carrier aggregation is the most important part of LTE-A technology as it allows wireless operators to create large spectrum assets by combining different frequency bands.

Significant technological inventions and innovations in the telecom space make even a mature market like the U.S. highly lucrative for telecom operators. In addition to offering traditional triple-play voice, data and video services, the machine-to-machine (M2M) wireless communications technology, cloud-managed network virtualization and high-speed broadband networks have been significantly driving mobile data revenues for telecom service providers.

The Bottom Line

Wireless networks remain the key for the future growth of the overall telecom industry. Severe spectrum crunch coupled with gradual smartphone adoption are compelling wireless operators to seek other options to raise revenues. Further, growing demand for technically superior wireless products has been the silver lining for the telecom industry in an otherwise tough environment.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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