This Day On The Street
Continue to site
ADVERTISEMENT
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

Apple Economy's 'Fiscal Cliff' Saved by AT&T's Checkbook

AT&T isn't alone in making big spending bets on the smartphone and its spending plans may force competitors to quicken costly network upgrades.

On Wednesday, Sprint, which has seen its finances revitalized by an October merger announcement with Softbank of Japan said it will buy U.S. Cellular's Midwest assets, in a deal that is evidence of the company's improved industry standing.

Already, Sprint is now seen as having the finances to complete a wireless network upgrade -- called Network Vision -- and use heavily subsidized unlimited iPhone data plans to draw in users, in two smartphone market bets that once had analysts handicapping the company's bankruptcy.

Quietly, as the telecom industry has consolidated in a string of deals that makes Sprint and MetroPCS-TMobile better competitors to AT&T and Verizon, while tower operators such as American Tower (AMT), SBA Communications (SBAC) and Crown Castle (CCI) have also been buying up assets to serve growing wireless networks.

AT&T's spending plans may have a windfall on tower operators, says Piper Jaffray analyst Christopher Larsen. "Today's announcement translates to more cell sites... The installations will leverage fiber connections to the towers, which is good for fiber- based players," writes Larsen in a note to clients that highlights American Tower, SBA Communications and Crown Castle as beneficiaries.

All told, AT&T's spending signals that money is still gushing into the wireless market as a swath of industries brace for continued consumer demand for smartphones, tablets and other mobile devices.

While AT&T's plans may tip forecasts of infrastructure spending positive -- averting a cliff that may hit other sectors - there's good reason to expect other large carriers will plow billions more into wireless and fiber networks, in coming years.

See why Dish Network's Earnings Revive DirecTV Deal Talk.

-- Written by Antoine Gara in New York

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
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!
SYM TRADE IT LAST %CHG
AAPL $127.60 0.00%
CIEN $21.85 0.00%
JNPR $24.14 0.00%
QCOM $68.64 0.00%
S $4.99 0.00%

Markets

DOW 18,034.93 +208.63 1.17%
S&P 500 2,100.40 +19.22 0.92%
NASDAQ 4,994.6020 +62.7870 1.27%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs