According to figures from NPD Group, a market research company, smartphone usage has grown from 46% in the third quarter of 2010 to 59% in the same quarter in 2011. The mobile market is brimming with fast-growing companies, so investment in such stocks may have the potential for good returns. Let's plumb the depths.
Lately, several wireless companies have gauged the need for additional spectrum to enhance their wireless networking options. It is indispensable as airwaves are the need du jour to deal with data traffic across the cellular network. In fact, it was this need for spectrum that prompted AT&T
Around two years ago, Verizon Wireless acquired Alltel Wireless in a deal valued at $28.1 billion. This went on to create one of the biggest mobile-phone companies in the U.S. This year, Verizon Wireless will acquire SpectrumCo from Comcast, Time Warner Cable, and Bright House networks. In exchange, Comcast will receive $2.3 billion, owning 63.6% in the deal, Time Warner Cable is being paid $1.1 billion with a share of 31.2%, and Bright House Networks gets $189 million, taking a share of 5.3%.
On the wire
For a wireless service leader like Verizon Wireless, the acquisition of spectrum from three networks is bound to boost its service offering.
Such deals should bolster Verizon's growth plans. It will be better equipped to create a stronger customer base and compete with the current market leader, AT&T. In fact, with this deal, it is all set to reach 259 million Americans.
This joint effort will enable Verizon Wireless to provide Advanced Wireless Services -- as many as 122 AWS licenses in all. It will also seal a cross-resale agreement through which it can sell Verizon-branded services in addition to cable services right from its stores. Interested cable companies can also gain access to wireless cable network services as a comprehensive solution from Verizon. The companies can gain access to Verizon's 4G LTE network, which will make wholesale partners out of Sprint Nextel and Clearwire.
The Foolish bottom line
Better services, more networks, and added spectrum have enhanced the offerings made by Verizon Wireless. It is true that for wireless service providers like Verizon, spectrum is essential to meet the rising demand. However, as investors we can gauge the deal-making progress made by the company and invest in it. All said, it is advisable to keep this company on your watchlist.
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Vibhuti Shah does not own shares of any of the companies mentioned in this article. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.