Leading wireless carrier, AT&T Inc. (T) announced on Nov 26 that it is offering various discounted deals on its products and services in an attempt to lure customers into holiday season shopping. These offers pertain to various merchandise such as phone case, car chargers tablets, key boards, stands, blue tooth and related products. Given the new offers we expect the company to generate additional revenues through higher sales that would be accretive to its earnings going forward.
Despite being a positive announcement to the market, the company’s share prices did not register much change. However, it closed at slightly higher levels on Wednesday compared to Tuesday trading.
The sale season at AT&T begins before Thanksgiving Day and extends beyond Dec 31. Notable among the offers is the availability of Samsung Galaxy Note 8.0, which runs on Google (GOOG) Android platform, for $99.99 when bundled with other Samsung smartphones. AT&T has established various deals for different occasions such as Thanksgiving, Black Friday and Cyber Monday.
Further, AT&T plans to woo customers with early upgrades to smartphones and tablets every year. The program allows customers to get new phones without paying extra on down payment, activation fee, upgrade or financing fee. New and existing customers due for an upgrade can avail this offer.
The carrier has also begun to offer a new device upgrade service called AT&T Next that allows subscribers (both new and existing customers) to change their old smartphones or tablets every year without separately paying any upgrade fee or down payment. The company’s Mobile Share plan is also gaining popularity and already has 16 million subscribers. Management intends to launch new high-tier plans in the coming quarters.
We believe these sales offers would likely support AT&T’s revenue growth target for the year. The company’s revenues are also likely to be driven by contributions from wireless services.
AT&T, which operates with Verizon Communications Inc. (VZ) and Sprint Corp. (S), has a Zacks Rank #3 (Hold).
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