AT&T 5G Powers New York's Subway Connectivity: Will it Drive Revenues?

AT&T, Inc.T recently announced that it has collaborated with Boldyn Networks and the Metropolitan Transportation Authority to expand 5G cellular connectivity inside underground subway tunnels in New York. This rollout aims to address several issues faced by users and operators of the subway network.

Subway tunnels usually have zero or extremely weak signals, leading to call drops and message failures. During emergencies, this undermines passengers’ ability to call for help. Essential applications related to payments and work emails do not work properly because of inconsistent connectivity. Underground spaces are getting disconnected from the growing digital ecosystem. Boldyn’s DAS (Distributed Antenna System) cellular network is creating a shared digital backbone with AT&T 5G to mitigate these problems.

In DAS, fiber cable runs through tunnels with an antenna installed every few meters. These antennas are connected back to the telecom network provided by AT&T. In the recent venture, T has activated its cellular service in 4/5 lines between Bowling Green and Fulton Street stations and the Crosstown G line between Bedford-Nostrand Avenues and Hoyt-Schermerhorn Streets stations.

AT&T is the first telecom service provider to have deployed connectivity in those subway tunnels. First mover advantage in one of the country’s busiest subway networks can potentially drive subscriber addition. Growing adoption of AT&T 5G in smart city applications bodes well for sustainable growth.

How Are Competitors Faring?

The company faces competition from Verizon Communications, Inc.VZ and T-Mobile, US, Inc.TMUS in this domain. Verizon’s smart city solutions combine IoT, 5G and Edge computing. The company is rapidly expanding into leading-edge V2X technology with innovative product launches such as Verizon Edge Transportation Exchange. The solution offers real-time alerts to traffic, pedestrians and supports the autonomous driving ecosystem.

T-Mobile’s smart city solutions focus on traffic management, public safety, environmental monitoring and power optimization. The company has been chosen as the exclusive wireless carrier to support a wide range of mission-critical operations in New York City (NYC). T-Mobile’s network will serve as the backbone for one of the largest and most demanding public safety operations in the United States. With T-Priority, first responders in NYC will experience lower latency, faster speeds and guaranteed priority access across all 5G bands, even during times of extreme congestion.

T’s Price Performance, Valuation & Estimates

AT&T stock has gained 2.2% over the past year against the Wireless National industry’s decline of 7.6%.

Image Source: Zacks Investment Research

Going by the forward price to earnings ratio, the company’s shares currently trade at 12.25 forward earnings, lower than the industry’s 13.28.

Image Source: Zacks Investment Research

Earnings estimates for T for 2026 and 2027 have moved upward in the past 60 days.
 

Image Source: Zacks Investment Research

AT&T currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zacks Names #1 Semiconductor Stock

This under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.

With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research