Shares of US wireless carriers are trading lower after SpaceX agreed to purchase low-band 800 MHz spectrum licenses from Grain Capital, which Grain recently acquired from T-Mobile. SpaceX also says Starlink will build a terrestrial wireless network to supplement satellite with indoor coverage.
VZ is trading within a range we consider fairly valued.
Price
$41.65
Fair Value
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Uncertainty
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1-Star Price
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5-Star Price
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Economic Moat
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Capital Allocation
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Bulls Say, Bears Say
Bulls
Verizon's network focus over the past 15 years has given it the industry's broadest wireless coverage, and its reputation with most customers is sterling.
Bears
Rival carriers have rapidly deployed new spectrum and technology to add coverage and capacity. Verizon’s network leadership is a thing of the past, and recent price increases have soured its reputation with customers.
Wireless services account for 70% of Verizon Communications' total service revenue and nearly all of its operating income. The firm serves about 94 million postpaid and 20 million prepaid phone customers via its nationwide network, making it the largest US wireless carrier. Fixed-line telecom operations include local networks in the Northeast that reach about 30 million homes and businesses, including about 20 million served by the Fios fiber-optic network. Verizon closed its acquisition of Frontier Communications in January, adding networks that reach another 15 million locations, including 9 million with fiber. These networks serve about 11 million broadband customers. Verizon also provides telecom services nationwide to enterprise customers, using a mix of its own and other networks.