Why Verizon Communications Inc. (VZ) Will Stay On Top Of The LTE Market

Other Players

Investors should not underestimate the 4G LTE market as it is expected to show growth in the near future. According to Mind Commerce, a research firm, the global 4G LTE market will reach over $13 billion by 2015, growing at a CAGR of 45%. CenturyLink and Windstream are hoping to cash on this by providing 4G LTE network.

However, Verizon Communications Inc. (NYSE:VZ) has a head start. With a gross margin of 56.50%, compared with 47.16% for AT&T, 37.23% for Sprint, and 50.01% for Windstream, Verizon does seem to be doing better than its rivals.

And investors should not be discouraged by the commitment of Verizon’s rivals to roll out the 4G LTE network and compete effectively with the company. Sprint recently announced that it was adding nine more 4G LTE markets to its network. The nine markets include Altoona, Pa., Asheville, N.C., Columbus, Ind., Elkhart/Goshen, Ind., Hammond, La., La Cross, Wis., San Juan, Puerto Rico, Statesville, N.C., and Temple, Texas. AT&T recently launched LTE networks in six new cities and said the service is now live in 176 others.

Bottom Line

Relying on its strong balance sheet, its impressive roll out initiative, and the launch of LTE-enabled devices, Verizon Communications Inc. (NYSE:VZ) has managed to extend business services without having to completely restructure its operations. Combined with its plan for the near future, the company is poised to pull away from competitors such as AT&T and Sprint.

Adetokunbo Abiola has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.