ATandT Catching Up to Verizons Subscriber Base

 
 
By Don Reisinger  |  Posted 2011-01-25 Email Print this article Print
 
 
 
 
 
 
 


 

5. The momentum is there

If there is anything that Verizon needs right now, it's momentum. The company's shares have been relatively stagnant over the past few months, and its earnings have been somewhat lackluster. But the iPhone has all the momentum Verizon needs. Not only does it continue to sell extremely well, but the hype surrounding its launch on Verizon's network is unprecedented. Verizon needs a kick start, and the iPhone might just be that.

6. AT&T is going after Android in a big way

As Verizon prepares to invest in Apple's iPhone, its top competitor is realizing the value of Android. In fact, AT&T is expected to double-down on Android this year, bringing about a dozen new devices to its network in 2011. Whether or not those products will be able to match Verizon's superior Android offering, led by the Motorola Droid X, remains to be seen. But if AT&T is worrying more about Android than it has in the past, Verizon should be happy to see the iPhone coming.

7. It dampens investor concern

As mentioned, Verizon's earnings have been somewhat lackluster over the past couple quarters, especially when they're compared with AT&T's. That disappointing showing has caused some investors to worry about the future of the company and whether or not their cash is being wisely invested. But luckily for Verizon, the iPhone has lessened those concerns and made those folks realize that betting against Verizon might not be the best idea just yet.

8. It can justify forward-thinking worries

Verizon has said that it will need to dole out sizable subsidies in order to get the iPhone to the same price that AT&T is selling the device for. That should push expenses higher and potentially cause financial concern for the company. But those who are worried also realize that the iPhone is pushing revenue much higher through service plans. So, while it might not be good to incur higher expenses because of the iPhone, over time, it will likely prove to be well worth the investment. And it's better to take that hit now when things are still going relatively well than a year from now.

9. AT&T is still gaining

Aside from its outstanding financial performance, it's important to note that AT&T continues to grow its subscriber base. In fact, during the last-reported quarter, AT&T said that it had 92.8 million subscribers. During that period, it gained 2.6 million subscribers and put it within striking distance of Verizon. AT&T is expected to announce its fourth-quarter earnings later this week. If it sees similarly impressive subscriber growth as is expected by analysts, the company could come close to, if not beat, Verizon's total subscriber base. If that happens, Verizon will be thanking Apple for finally bringing its iPhone to its network.

10. It'll capitalize on iPad 2, iPhone 5

One of the key aspects of Verizon getting the iPhone now is having the ability to offer the iPhone 5 and iPad 2 on its network. If Verizon waited too much longer, Apple would have announced the iPad 2 and the iPhone 5 with AT&T 3G connectivity and service. Those who wanted to get their hands on, say, the iPad 2 and connect it to Verizon's network would need the MiFi 2200 hot spot that iPad owners currently need. It wouldn't have been good. By getting the iPhone now, Verizon has positioned itself to get in on every new iPad and iPhone Apple releases from here on out.




 
 
 
 
Don Reisinger is a freelance technology columnist. He started writing about technology for Ziff-Davis' Gearlog.com. Since then, he has written extremely popular columns for CNET.com, Computerworld, InformationWeek, and others. He has appeared numerous times on national television to share his expertise with viewers. You can follow his every move at http://twitter.com/donreisinger.
 
 
 
 
 
 
 

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