Despite the European Union, doing business in this region is still complicated and much more regulated for phone companies, with markets that have fragmented pricing and governments where it is a real challenge to create a regional network.
Still, the idea of moving over to Europe makes sense since AT&T has the experience of creating a fourth-generation (4G) U.S. network. It makes sense to apply it to Europe. Faster service would naturally lead to mobile customers increasing data usage. I believe the thinking is sound.
To expand into Europe, one strategy under consideration is buying a European phone company. Vodafone (VOD), in the news for quite some time since selling its stake in Verizon Wireless, is a strong candidate.AT&T has battled "big brother" Verizon Communications (VZ) to keep its dominance in the sales of iPhones, to no avail. Verizon is picking up ground and increasing its iPhone sales, creating a nice dominance in the mobile advertising market. In the spring of 2013 the iPhone boasted 64% of the mobile advertising market share. In terms of subscribers, Verizon is the largest mobile phone carrier in the United States with a slight edge over AT&T. With the U.S. market becoming more and more saturated, building a 4G network in Europe almost looks like virgin revenue territory. Still, there are risks. Within the last decade there have been global-minded Internet companies that have attempted to expand their networks internationally by counting on rising Internet usage to pay for it. Do you remember Worldcom? It had a global network that included the United States, Europe and parts of Latin America but ended up filing for bankruptcy.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- 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 + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV