Akamai’s Deal with AT&T Gives Shares a Shot in the Arm

Telecom & Wireless

Published: December 6, 2012 11:16 am

Last Updated: April 27, 2020 3:30 pm

Akamai Technologies Inc. (NASDAQ: AKAM) and AT&T Inc. (NYSE: T) this morning announced an alliance between the two companies to offer “a global suite of content delivery network (CDN) solutions to companies.” No dollar value was placed on the agreement, but Akamai shares are getting a nice bounce on the news.

Akamai will install its CDN servers at the edge of AT&T’s IP network and in the larger company’s U.S. facilities beginning next year. The agreement essentially concedes that AT&T’s technology was not the equal of Akamai’s. The deal also underscores the fact that the edges of the IP network are not easy to manage and maintain, and indicates that other network providers like Level 3 Communications Inc. (NASDAQ: LVLT) might look to Akamai for help.

In addition to installing new equipment, Akamai has agreed to share tech support, customer service, marketing, and professional services support with AT&T.

Shares of Akamai have jumped more than 10% to $39.06 in a 52-week range of $25.90 to $40.32 on the news.

Paul Ausick

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