Verizon Communications Inc. (VZ), Sprint Nextel Corporation (S): Which of These 3 Phone Firms Should You Avoid?

According to him, the company didn’t pay sales tax on cell plans, even after a Manhattan Supreme Court judge denied Sprint Nextel Corporation (NYSE:S)’s bid to toss the case out. Paying such a high fee will hurt the company, which has consistently operated in the red. Last year, the firm posted a net loss of over $4.1 billion. Unlike its two counterparts, Sprint Nextel Corporation (NYSE:S) hasn’t announced plans to make a push into international operations, and this could keep it at a loss.

The firm is making an effort, however, to launch the 4G LTE network by the end of the year. That would help the firm move into the 21st century. Sprint Nextel Corporation (NYSE:S) is in the process of shutting down its old-fashioned iDen network. The move will help accommodate long-term data growth. Once that is complete, the company can begin to ease up on operating expenses and potentially realize a profit within the next few years. However, Sprint is too much underwater to be an attractive purchase right now.

International expansion is key

Entry into new markets is a major component for these companies, as they are struggling to profit domestically. Verizon Communications Inc. (NYSE:VZ) will likely see success from entry into Canada if it is able to lure people away from long-term contracts that many Canadian telecommunications providers draw clients into. For AT&T Inc. (NYSE:T), a European entrance could be tricky, as current telecommunications providers there already offer their plans at a low rate. With so many people already happy with their current plans, it will be much more difficult to attract a large clientele. Unlike the other two companies, Sprint hasn’t announced major efforts to provide services outside of the U.S. This could further hurt the firm, and lengthen losses.

Phillip Woolgar has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Phillip is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Which of these 3 Phone Firms Should You Avoid? originally appeared on Fool.com is written by Phillip Woolgar.

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