Jeff Kagan: Is Cuba Next on the AT&T Hit Parade?

Jeff Kagan  |

AT&T (T) has always been an aggressive, growth-oriented company. Years ago they started the smartphone revolution. Next they had the guts to start the huge Apple (AAPL) iPhone revolution when Verizon (VZ) Wireless passed. This paid-off big time for AT&T. During the last year we have seen them moving into other opportunities like Mexico, DirecTV, wireless TV and more. So, is Cuba next on the AT&T hit parade?

As American investors, we don’t know much about Cuba, but what we do know is that they are far behind the times. This could translate as a huge new growth opportunity for US companies with the cajones to take on the challenge. And AT&T has some of the biggest cajones around.

AT&T, Starwood, Marriott and Cuba

So far AT&T, Starwood (HOT), Marriott (MAR) and others seem to see Cuba as a big, new opportunity. And this may just be the very early signs of lots of US activity down there. Next week, President Obama will make a trip to Cuba, and it looks like we may see some first-time deals announced along with the trip, if they can get done on time.

I don’t think AT&T has made any announcements, but communications services are core areas that every country needs in order to function and grow. Services like wireless, wire line, television, Internet and other new technologies we in the US are trying to wrap our arms around like the young mobile TV revolution.

I think the first services we will see moving into Cuba are key services like communications, hotels, power, water, automotive and others. The next question is, will we see larger US companies like Verizon, Comcast (CMCSA) and others move into this space as well? Good question. We have seen little interest to date, but who knows what tomorrow will bring?

Early Adopters in Cuba First

At this early stage however, it’s the early adopters and most aggressive companies who see opportunities. Like the old saying goes, leaders take the arrows, AT&T, Starwood and Marriott will be out front, walking through the jungle called Cuba with a machete in hand carving out a growth path for many other US companies.

Over the course of the next several years, if Cuba stays on this track, we will see many other companies enter this space. This may prove to be a great opportunity for growth.

Opportunities for US Workers in Cuba

That would also mean there will be plenty of opportunities for workers to enter this market as well. Some workers will come from Cuba itself, however most Cuban’s don’t have to knowledge and expertise at this early stage. So workers will be entering from the US.

That creates another huge new opportunity for individuals and eventually, perhaps even families. At this early stage we simply don’t know what this opportunity will look like next year or five years from now. Will it be a long-term work in progress or will it be a short-term flash in the pan that goes nowhere?

Cuba is a Big Opportunity for Right Investments

There is no way to tell for sure at this early stage, however if companies like AT&T, Starwood and Marriott are any example, it sure sounds like we will give this one helluva try. Cuba is a tiny island we really know very little about. It will be interesting to learn more about the country, it’s history, it’s government, it’s economy and more.

We’ll get a better idea about growth opportunities as the next several years unfold. So let’s stay tuned. This could be a big opportunity for the right investments.

Equities.com columnist Jeff Kagan is a Wireless Analyst, Telecom Analyst and consultant. He shares his colorful perspectives on the changing wireless, communications and tech industry which he's been following for 25 years. He follows what's hot, what's not, why and what's coming next.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.

Companies

Symbol Name Price Change % Volume
VZ Verizon Communications Inc. 58.51 -0.14 -0.24 9,138,943 Trade
HOTR BURG Freehold Royalties Ltd. n/a n/a n/a n/a
CMCSA Comcast Corporation Class A Common Stock 46.09 0.02 0.04 15,930,962 Trade
AAPL Apple Inc. 324.95 0.08 0.02 20,028,447 Trade

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