Providing communications services for first responders should be an honor while also proving lucrative, given how many different places need such services. But for Verizon (VZ) and AT&T (T), it’s proving to be a bone of contention about who will actually provide the service and for what. As a result, shares for both companies were down modestly in Monday morning’s trading.
AT&T, along with its allies in the field, is trying to get access to more federally-held wireless frequencies to back up FirstNet. FirstNet is AT&T’s homegrown network for providing communications to first responders and got its start back in 2017. AT&T has the exclusive contract to run FirstNet, which runs for 25 years.
Sounds reasonable, but AT&T’s competitors are pointing out that the extra spectrum given out to AT&T likely wouldn’t just go to the first responders. Rather, competitors alleged that AT&T would be able to run commercial traffic over that spectrum as well. Verizon went so far as to call the move a “substantial windfall” since the spectrum AT&T is asking for would run around $14 billion if purchased outright.
Bigger Troubles Afoot
Perhaps shareholders are a bit upset that this is the hill that Verizon and AT&T are clashing on so hard when both clearly have bigger troubles. AT&T, for example, was recently hit by a major hack that cost customers a whole lot of data. AT&T also paid a hacker $380,000 to erase some of the data involved in that leak.
Not that things are much better for Verizon right now. The company is currently facing a lawsuit from elements of the recording industry over “staggering” copyright infringement. That copyright infringement is connected to a platform called BitTorrent, which Verizon customers—or anyone else, really—could access and use to engage in file sharing of copyrighted materials, including music.
Is Verizon or AT&T the Better Buy?
Turning to Wall Street, analysts consider both T and VZ as Moderate Buys. However, T is the narrow leader of the two, thanks to a 16.78% upside potential against an average price target of $21.71 per share. Meanwhile, VZ’s average price target of $45.68 per share yields just an 11.58% upside potential.
