MBA 515 AT&T vs Verizon Company Comparison – Group Project GRADE A (By Proreader)

MBA515 AT&T vs Verizon Company Comparison – Group Project 1 2 Executive Summary The purpose of this report is to analyze two competitive companies within the same industry (AT&T and Verizon) and decide which entity is the superior investment option for an equity investor based on certain factors. After in depth analysis the company’s background, finances, potential growth, and risk, we’ve concluded that Verizon Communications has a higher potential for growth and therefore a better long term investment option for an equity investor. Company Choices We chose these two companies because we wanted to have a comparison of companies that would reflect today’s dependence on technology. Wireless communication is a necessity for staying connected to the day -to-day happenings. When we thought of companies tha t are the best of their respective industries we had to consider those that have the greatest consumer bases with the highest and most advanced technologies. After discussing a few different ideas we settled on the two leading companies in the wireless communication industry, AT&T and Verizon Communications. These companies have many of the same attributes on the surface but they differ in the details. According to the North American Industry Classification System (NAICS) these companies are characterized b y the same codes. “Providing wired broadband Internet services via own operated telecommunications infrastructure --are classified in Industry 517110 , Wired Telecom munications Carriers; Providing wired VoIP services via own operated telecommunications infrastructure --are classified in Industry 517110 , Wired Telecommunications Carriers; Providing expert advice in the field of information technology or in integrating communication and computer systems --are classified in Industry 54151 , Computer Systems Design and Related Services; and Providing satellite telecommunications services --are classified 3 in Industry 517410 , Satellite Telecommunications.” (2012 NAICS Definition) From here these companies start their differences. They remain competitors through much of their diver se and far reaching technologies. We chose these companies because they have an array of opportunities and they are well known. Background – Verizon Wireless Verizon Communications Inc., is based out of New York City and incorporated in Delaware, was formed on June 30, 2000, with the merger of Bell Atlantic Corp. and GTE Corp. This began Verizon’s trading on the New York Stock Exchange on July 3, 2000. Although Verizon is a young company the mergers that brought it about have roots that can be traced back to the beginnings of the telephone business in the late 19th century. At the end of 2006, Verizon Wireless attained West Virginia Wireless, a regional GSM cell phone company. On July 30, 2007, Rural Cellular Corporation (Unicel ) publicized it had agreed to be attained by Verizon Wireless (a CDMA cell ular network technology carrier). Verizon stated it plans to convert RCC's GSM customers to CDMA -based cellular technology, but will continue to operate RCC's current GSM network in order to generate roaming revenue. This deal was voted on and approved on August 1, 2008. The Department of Justice specified that Verizon would separate certain properties in New York, Vermont, and Washington in order to complete the acquisition. In mid -2007, Ramcell of Oregon made a deal to sell its assets to Verizon Wireless. Assimilation of the local company to increase its coverage area in Southern Oregon began in late 2010. On January 22, 2008 SureWest Communications announced that it had entered into a conclusive agr eement to sell the operating assets of its Wireless business to Verizon Wireless. On June 5, 2008, Verizon Wireless announced that it had entered into an agreement to acquire Alltel for $5.9 billion, p lus the assumption of debt, in a deal that would create the biggest mobile phone company in the U.S. surpassing AT&T . Based on Alltel's anticipated net debt at closing of $22.2 billion,