When Will Verizon and AT&T Start Taking Sprint Seriously?
It apparently isn't sinking in that Sprint Nextel (NYS: S) isn't going away.
Pacific Crest analyst Michael Bowen upgraded shares of Verizon Communications (NYS: VZ) on Friday, impressed by the company's strength in wireless growth and a surprising rebound in its legacy wireline business.
"The transition to LTE will drive better relative growth, margins and capital efficiency," Bowen writes, as retold by Barron's.
Is this really the best time to be warming up to wireless giants Verizon and AT&T (NYS: T) ?
Yes, Verizon had a strong report. Accelerating subscriber growth and folks taking to the lucrative shared data plans are huge. However, isn't it time for the market to start taking Sprint seriously? SoftBank's move to take a 70% stake in Sprint will make it a more viable option for smartphone users.
Right now, Sprint is a distant bronze medalist in a race that Verizon and AT&T are winning. It doesn't matter that Sprint is offering, on average, cheaper rates. It doesn't matter that Sprint is still selling unlimited data plans at a time when AT&T and Verizon have moved on to data caps.
Sprint just has a reputation for spotty connectivity, and savvy smartphone buyers may be alarmed by the company's unwelcome streak of quarterly deficits that dates all the way back to 2008.
Sprint -- and its equally profitless ally Clearwire (NAS: CLWR) -- may be trading in the single digits, but the service's viability has been validated by a Japanese titan that will make sure that Sprint has the financial muscle to be a difference-maker.
Respect won't blossom overnight, but AT&T and Verizon may have to think twice the next time they try to push through consumer-unfriendly moves like tiered data plans or tricky shared data arrangements. At the very least, now would be a good time for the two wireless giants to at least start looking over their shoulder from time to time.
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The article When Will Verizon and AT&T Start Taking Sprint Seriously? originally appeared on Fool.com.Longtime Fool contributor Rick Aristotle Munarriz has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend AT&T.; Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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