AT&T Notes: Rolls Out New LTE Phones, T-Mobile Completed Next Year

In a filing with the U.S. Securities and Exchange Commission, AT&T (NYSE:T) said that it now expects its proposed $39 billion acquisition of T-Mobile and a block of Qualcomm (NASDAQ:QCOM) spectrum to close by the end of the first half of next year, a few months later than it originally planned. ^[1] In the past, AT&T has run into speed bumps with both deals. In August, the FCC (Federal Communications Commission) announced that it would review both AT&T’s spectrum purchase from Qualcomm and its merger with T-Mobile at the same time (see AT&T Faces Another FCC Hurdle in Bid for T-Mobile).

A few weeks after that, the Department of Justice filed an antitrust lawsuit to block the proposed AT&T/T-Mobile deal saying it would hurt competition in the U.S. wireless market (see Government Delivers Blow to AT&T and T-Mobile Deal). Then Sprint (NYSE:S) also joined DOJ with its own lawsuit to block this deal (see Sprint Jumps on the Dog Pile and Sues AT&T). Our $37.75 price estimate for AT&T stock is about 30% above market price.

See our complete analysis for AT&T stock here

In other news, AT&T will release its first 4G LTE smartphones and expand its LTE network to nine additional markets today. ^[2] These smartphones include Samsung Galaxy S II Skyrocket and the HTC Vivid, both of which are compatible with AT&T’s HSPA+ and LTE networks and run Google (NASDAQ:GOOG) Android Gingerbread. AT&T plans to reach 15 markets and 70 million Americans for its LTE network by the end of the year. The increased use of high speed LTE smartphones should encourage consumers to use internet from their smartphones more often, thereby benefiting AT&T through increased data revenues and improvement in margins.

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1. AT&T Sees Later Closing for T-Mobile Deal, Wall Street Journal, November 4th, 2011 [↩]
2. AT&T press release, October 31st, 2011 [↩]