This Day On The Street
Continue to site
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

AT&T Looks to Europe for Opportunities

Entering Europe, AT&T will find it much more difficult to build a network than what it has seen in the United States. Along with the European Union's guidelines, the member countries also have their own rules. Europe as a whole is much more regulated than the United States, which limits the fees and revenue carriers can make from charging for network usage and roaming charges.

Not only is the European economy growing more slowly than in the United States, but unemployment is also much higher. On top of this, "pricing competition" makes it more challenging to squeak out profits.

The jury is still out on how much of a profit AT&T can make as compared to here in the states. Consumers in Europe pay much less for their mobile usage. (A recent Bloomberg article suggested the average European paid $38 per month while the U.S. subscriber pays $69.) Even though the higher amount in the United States includes the 4G coverage, how much are the citizens of the European Union willing to pay for their 4G service?

I highly doubt they will pay what we are paying here in the United States. I do not believe operating costs in Europe are going to be almost half what they are in the United States either. From an investor's viewpoint, it looks to me like AT&T is going to have a major challenge making a profit in Europe compared to here in the states.

I think of AT&T as a stalwart domestic telecom company. As technology has evolved, so has the company. Revenue sources -- such as from landlines -- continue to change, which is why the company is exploring Europe as a market.

Buying Vodaphone could bring AT&T new opportunities and new risks. I believe it will be important for investors to stay abreast of AT&T's interest in developing a 4G network in Europe. The company is a strong investment for "income investors" and Europe could be either a boondoggle or a very strong long-term revenue source.

At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.
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
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
T $38.60 -0.71%
AAPL $93.04 -1.20%
FB $117.54 -0.44%
GOOG $704.71 1.30%
TSLA $210.29 -5.50%


Chart of I:DJI
DOW 17,638.52 -22.19 -0.13%
S&P 500 2,042.95 -7.68 -0.37%
NASDAQ 4,695.9680 -21.1260 -0.45%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs