Is AT&T Prepared for More Competition?

With two large telecommunication deals in progress, the first and second largest U.S. wireless carriers, Verizon (NYSE:VZ) and AT&T (NYSE:T), are about to face more competition.

Deutsche Telekom-owned (DTEGY.PK) T-Mobile’s upcoming merger with MetroPCS (NYSE:PCS) and Japan-based Softbank’s (SFTBF.PK) nearing purchase of a stake in Sprint (NYSE:S) have changed the market. As market analysis publication Seeking Alpha commented, “Suddenly, the weak domestic wireless providers have become a threat to the cushy life of the duopoly.”

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AT&T’s problems are further compounded by Verizon as the carrier captures more market share with its more advanced 4G network; the company plans to expand its network to 100 markets by the end of 2012, while Verizon is expected have 417 total markets. On October 9, Verizon announced it will launch of the 400th 4G LTE market on October 18th, which is two months ahead of schedule. In comparison, Sprint offers cover in 24 cities and T-Mobile does not offer the service in any city.

However, competition could be a pressing problem in the future as AT&T’s stock price is the highest it has been in 4 years; it has risen by more than 40 percent in the last year.

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