AT&T (T) Unveils Individual State Plans For FirstNet Project

U.S. telecom behemoth, AT&T Inc. (NYSE:T) , and the First Responder Network Authority (FirstNet) together revealed customized buildout plans for states to consider for the first nationwide dedicated wireless network for first responders. States and territories will get 45 days to review the plans along with an opportunity to exchange feedback with FirstNet Authority. Following that a 90-day window will open for them to opt in or out of the project.

Notably, in Mar 2017, AT&T was selected by the FirstNet to build and manage the first nationwide broadband network dedicated to America's police, firefighters and emergency medical services. The network will cover all 50 states, five U.S. territories and the District of Columbia, including rural communities and tribal lands in those states and territories.

As part of the 25-year contract, FirstNet will provide AT&T with a swath of 20 MHz of spectrum in the 700 MHz frequency band for the entire duration. AT&T will also be given success-based payments of $6.5 billion over the next five years to design and build the network. The company is expected to spend around $40 billion over the life of the contract to build, deploy, operate and maintain the network. AT&T has projected that this contract will create more than 10,000 jobs in the next two years.

AT&T’s consortium to deploy FirstNet includes Motorola Solutions Inc. (NYSE:MSI) , General Dynamics Corp. (NYSE:GD) , Sapient Consulting and Inmarsat Government. Importantly, per the deal, AT&T will be able to use this highly valuable spectrum for commercial purposes and consumer services as well. This is the reason why several industry researchers have opined that the FirstNet project may become a boon for cell tower operators such as American Tower Corp. (NYSE:AMT) and SBA Communications Corp. (NASDAQ:SBAC) .

Importantly, AT&T will connect FirstNet users to the company's telecommunications network assets, valued at more than $180 billion. This contract can be considered a necessary boost to the company’s profile.

Price performance of AT&T

Year to date, the stock price of AT&T has witnessed a decline of 9.12%, worse-than the Zacks categorized U.S National Wireless industry’s decline of 8.53% in the same time period.

Nevertheless, AT&T is diversifying its businesses significantly. The company became the largest pay-TV operator last year, after its acquisition of satellite TV behemoth DIRECTV. Moreover, AT&T already has a strong presence in the Mexican wireless market and several Latin American pay-TV markets. The proposed merger with Time Warner will provide AT&T with a portfolio of lucrative contents. We believe that substantial diversification in related fields is the reason behind the stock currently carrying a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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