Verizon Communications Inc. (VZ): Focus On Sustaining Sales Momentum

As Vodafone argues to push for a more lucrative deal, it still has to ward off allegations relating to its failure to adhere to European roaming tariffs. Spain’s telecom regulator says that it’s pondering whether or not to fine Vodafone. Reports indicate that a fine could reach up to 2 million euros, or $2.6 million. Vodafone is accused of automatically charging a constant roaming fee of 4 euros a day to  customers traveling Europe. By doing this, it bypassed the different maximum fees under Europe-approved tariffs.

Competitor’s earnings

AT&T Inc. (NYSE:T), which is Verizon Communications Inc. (NYSE:VZ)’s closest competitor, equally had a relatively good quarter, increasing its profits by 3%. AT&T Inc. (NYSE:T)’s profits came in at $0.64 a share on sales of $31.4 billion.

The main headline in its earnings call however, was the huge loss of high-paying telephone subscribers. Although the company beat analysts’ expectations of 195,000 new subscribers and added 296,000 subscribers to its services in the first quarter, it lost 69,000 high-paying telephone subscribers. Most telephone subscribers chose Verizon, which despite increasing its charges still managed to increase its telephone-subscriber base in the first quarter.

Conclusion

I believe that Verizon’s wireless segment is its prime gem and the secret behind its prolonged growth. If the Vodafone deal pans out, a lot of opportunities will open up for Verizon. Not only that, but the deal will also sideline the competition and give Verizon the upper hand in view of the ongoing data blowup. This spells out huge growth possibilities moving forward. Go long on Verizon.

The article Verizon — True to Its Growth Story originally appeared on Fool.com and is written by Lennox Yieke.

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