Driving connectivity forward
The pending acquisition is a strategic move for Verizon as the company is locked in a race with rival AT&T
Verizon isn't the only company betting on the "connected car." Electric-car maker Tesla Motors
A crowded market
The auto industry offers a new growth opportunity for wireless providers including Verizon and AT&T. Last year, AT&T partnered with Ford
Verizon Wireless, a joint venture between Verizon Communications and Vodafone, is no stranger to the auto industry. In fact, General Motors
Innovative growth areas
By acquiring Hughes Telematics, Verizon is declaring its commitment to growing its revenue base. Hughes' relevance expands beyond the auto business to include its Lifecomm unit, which specializes in emergency response options for seniors. Meaning, the flexibility of Hughes' services platform will allow Verizon to expand not only within the car industry but also into spaces like health care and home energy management.
As Verizon is the second-largest U.S. telecom by revenue, I expect the purchase of Hughes to drive future growth for the company and help it better compete with rival AT&T. That's why I'm giving the stock an outperform CAPScall on my profile in Motley Fool CAPS. Don't forget to add these stocks to MyWatchlist -- the Motley Fool's free tool that lets you track and monitor your favorite companies.
Fool contributor Tamara Rutter owns shares of Tesla Motors. Follow her on Twitter, where she uses the handle @TamaraRutter, for more Foolish insights and investing advice. The Motley Fool owns shares of Tesla Motors and Ford Motor. Motley Fool newsletter services have recommended buying shares of General Motors, Ford Motor, and Tesla Motors. Motley Fool newsletter services have recommended creating a synthetic long position in Ford Motor. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.