This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Verizon, AT&T War Hinges on iPhone

BOSTON ( TheStreet) -- AT&T (T), Verizon (VZ) and Sprint (S) have been slugging it out for years, most recently fighting for control of the iPhone-dominated smartphone market. While there's no clear winner, the weakest player is obvious. Avoid Sprint.

The map wars between AT&T and Verizon have been raging for months with each company claiming the other's network is garbage. Noticeably absent from the debate is Sprint, which spends most of its advertising dollars on chest thumping ads about its fourth-generation network, even though that network isn't available to customers living outside major cities in the Midwest. While coverage is planned for major cities, such as New York, Boston and Los Angeles, Sprint's falling short on its main selling point.

The top three wireless carriers boast 224.4 million subscribers. That amounts to 73% of the 309 million people living in the U.S. Regardless of the elements that skew the numbers, such as customers with multiple accounts, the wireless business is an oligopoly led by a few heavyweights, followed by a slew of also-rans.

Telecom stocks have been trailing the broader market for the past year, with the S&P 500 Telecom Services Index falling 2..5% and the S&P 500 returning 7.9%. Verizon, the worst-performing member of the telecom index this year, has dropped 6.8%. AT&T had the second-biggest decline in the nine-company index with 2.9%. The best-performing stock was Sprint with a gain of 13%.

Verizon has been the industry leader with the largest number of subscribers, but AT&T seems to be winning the share price game based simply on its ability to retain exclusivity on the still hot Apple (AAPL) iPhone. Several rumors have placed the iPhone on Verizon shelves by the summer, but no agreements have been announced. It's unclear whether that's a function of Apple's unwillingness, AT&T's influence or Verizon's inability to close the deal, but expect such a development to propel Verizon over AT&T in terms of stock returns and subscriber growth.

Customers fed up with AT&T's finicky network would likely jump ship to join Verizon's more reliable network. Increased traffic on the Verizon network from iPhones would likely settle the debate over whether service glitches are caused by weak networks or the strain of smartphone use. Either way, if the companies offer similar products on similar networks, their stock prices will probably move in tandem.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,131.51 -0.46 -0.00%
S&P 500 1,997.67 -1.31 -0.07%
NASDAQ 4,551.6710 -1.0880 -0.02%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs