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Moving From 3G to 4G LTE (And What It All Means for AT&T)

By Andrew Tonner – Updated Apr 7, 2017 at 1:00PM

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AT&T (T 1.20%) and Verizon (VZ 1.66%) are in a similar boat at the moment. Apple's (AAPL 2.56%) just-launched iPhone 5 will be available through these two carriers only, and the resulting advancement from 3G contracts to 4G LTE will be lucrative to say the least.

Why does this data-speed upgrade bode so well for a company like AT&T? Statistics show that for the average smartphone user, data consumption increases by more than 100% when 3G speeds are bumped up to the 4G level. Considering that AT&T makes money on every bit (and byte) of data consumed, it's safe to say that profits will be staggering. Furthermore, since 4G is a higher-margin type of data plan, expect to see the restructuring of contracts as data picks up.

Although AT&T's U.S. coverage pales in comparison to that of Verizon, the launch of the iPhone 5 will be a catalyst that could provide a huge tailwind going forward.

Right now, to understand the future for AT&T (as well as Verizon) is to understand the opportunities and potential risks that the iPhone 5 will introduce in the telecom arena. The stakes are high, and the opportunity is huge, so we've just released an exclusive report covering all you need to know about the iPhone 5. By picking up a copy of our premium research report on Apple, you'll learn everything you need to know about the launch and receive ongoing guidance as key news breaks. To get started, just click here now.

Anand Chokkavelu has no positions in the stocks mentioned above. Andrew Tonner owns shares of Apple. The Motley Fool owns shares of Apple. Motley Fool newsletter services recommend Apple. 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.

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Stocks Mentioned

Apple Inc. Stock Quote
Apple Inc.
$146.10 (2.56%) $3.65
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
$30,316.32 (2.80%) $825.43
Verizon Communications Inc. Stock Quote
Verizon Communications Inc.
$39.81 (1.66%) $0.65
AT&T Inc. Stock Quote
AT&T Inc.
$16.09 (1.20%) $0.19

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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