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The U.S. telecom stocks mirrored the broader benchmark indices and witnessed an uptrend over the past week as the Congress gave the final approval to the nearly $1.9 trillion stimulus package to boost the industry. The package, which represents one of the largest federal aids since the Great Depression, will continue to provide federal jobless benefits and relief measures to small businesses that are struggling due to the pandemic. The industry was further buoyed by proposed funds for technology modernization programs that underscored the importance and urgency of strengthening U.S. cybersecurity capabilities amid various security breaches.
About $2 billion of the $1.9 trillion federal aid is earmarked for cybersecurity and technology modernization programs. Half of this proposed amount will be channeled into the Technology Modernization Fund that is likely to help the federal government launch new cyber and information technology programs, while about $650 million will support the Cybersecurity and Infrastructure Security Agency to thwart cybersecurity threats. The government also intends to spend about $200 million for boosting human capital in order to support the federal Chief Information Security Officer and U.S. Digital Service. The political slugfest for 5G supremacy at the backdrop dovetailed with the administrative efforts to set guardrails and legislation to safeguard the interests of domestic firms and provided confidence to the industry with adequate funds for modernization efforts.
Meanwhile, China-based wireless carrier China Telecom, which was delisted from the NYSE, intends to launch a secondary offering in the Shanghai Stock Exchange to broaden its source of funds and improve its capital as it prepares for life beyond the United States. Notably, state-owned oil giant, China National Offshore Oil Corp became the latest firm to be pushed out of the NYSE following erstwhile President’s decoupling efforts. With President Biden not making any visible effort to reverse those policies as it continues with an internal review process, several other communist nation-backed firms lie in fray to get delisted. This, in turn, has prompted China to free its coffers to technology firms in order to accelerate their R&D efforts.
Regarding company-specific news, long-term targets, collaborations and capital raise plans primarily took the center stage over the past five trading days.
Recap of the Week’s Most Important Stories
1. The top management of AT&T Inc. (T - Free Report) has debriefed investors about its progress on various operational metrics and reaffirmed its wireless service revenue growth target for 2021. John Stephens, the senior executive vice president and chief financial officer of the company, also shed some light on its continued business transformation initiatives to create long-term value for shareholders.
AT&T is increasingly focusing on its customer-centric business model to attract and retain customers for a lower churn rate. The company is witnessing healthy momentum in its postpaid wireless business with increased adoption of higher-tier unlimited plans. This, in turn, is expected to result in year-over-year growth in wireless customers with unlimited tariff plans. With solid network coverage, the company continues to expect wireless service revenues to grow about 2% in 2021.
2. BlackBerry Limited (BB - Free Report) recently announced that it has collaborated with Desay SV Automotive — a China-based automotive parts manufacturer — to offer dual-screen virtual smart cabin domain controller for safer driving. The new technology is being made widely available in the Tiggo 8 Plus and Jetour X90 models of Chery — a leading China-based automaker.
The operating system of these models is run by BlackBerry QNX real-time operating system and the QNX Hypervisor. It offers a comprehensive secure and intelligent connected vehicle software platform for safe driving decisions and in-vehicle applications. The QNX Hypervisor facilitates multiple operating systems to safely co-exist on the same system-on-a-chip. This has enabled developers to partition and isolate safety-critical and infotainment systems to ensure uninterrupted functioning of critical systems, even if other components fail.
3. Recently, in a virtual investor event, Sonos, Inc. (SONO - Free Report) debriefed investors about its progress on various operational metrics and unveiled the long-term financial targets for 2024. The company also launched Sonos Roam, an ultra-portable smart speaker with immersive audio experience, as it aims to gain a bigger pie in the global audio market.
With a customer-focused business model, the company is increasingly gaining traction as consumers tend to purchase additional products over time. These repeat customers form the crux of its business as the company reportedly reached 11 million homes at the end of fiscal 2020, accounting for about 9% of 116 million affluent homes in its existing markets. Sonos aims to expand this customer base and reach a wider audience in order to tap the $89 billion worth of global audio market.
4. Vodafone Group Plc (VOD - Free Report) is aiming to raise capital to the tune of €2 billion ($2.4 billion) from the IPO of Vantage Towers — its mobile-phone towers unit in Frankfurt. The transaction is likely to be one of the biggest equity market listings in the region in 2021.
Vodafone intends to sell Vantage Towers shares at €22.5-€29 each. The company is likely to utilize the proceeds to reduce its debt burden. Notably, carriers like Vodafone had been plagued by intense price competition and government regulations, while the COVID-19 adversities added to the woes. Consequently, the company is aiming to rake in significant money from its tower assets, with surging demand for increased 5G deployment fueling massive industry consolidation and restructuring.
5. Viavi Solutions Inc. (VIAV - Free Report) and trinamiX GmbH, a leader in infrared sensing technologies, announced a joint development agreement to build a Near-Infrared spectrometer module for integration into consumer devices.
trinamiX intends to build a miniaturized infrared sensing module for integration into smartphones. The module sends out infrared light, which is reflected from the object and then detected by the sensor. The Qualcomm Sensing Hub processes the captured data within the AI engine allowing the mobile platform to analyze the data.
Price Performance
The following table shows the price movement of some of the major telecom stocks over the past week and the six months.
In the past five trading days, T-Mobile has been the best performer with its stock gaining 6.7%, while Qualcomm was the biggest loser with its stock falling 3%.
Over the past six months, Arista has been the best performer with its stock appreciating 24.5%, while Bandwidth has lost the maximum at 10.8%.
Over the past six months, the Zacks Telecommunications Services industry declined 1.2% on average, while the S&P 500 has gained 15.5%.
What’s Next in the Telecom Space?
In addition to 5G deployments and product launches, all eyes will stay on how the Biden administration safeguards the telecom sector against probable external threats.
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Image: Bigstock
Telecom Stock Roundup: AT&T Updates Investors, BlackBerry's Smart Cabin & More
The U.S. telecom stocks mirrored the broader benchmark indices and witnessed an uptrend over the past week as the Congress gave the final approval to the nearly $1.9 trillion stimulus package to boost the industry. The package, which represents one of the largest federal aids since the Great Depression, will continue to provide federal jobless benefits and relief measures to small businesses that are struggling due to the pandemic. The industry was further buoyed by proposed funds for technology modernization programs that underscored the importance and urgency of strengthening U.S. cybersecurity capabilities amid various security breaches.
About $2 billion of the $1.9 trillion federal aid is earmarked for cybersecurity and technology modernization programs. Half of this proposed amount will be channeled into the Technology Modernization Fund that is likely to help the federal government launch new cyber and information technology programs, while about $650 million will support the Cybersecurity and Infrastructure Security Agency to thwart cybersecurity threats. The government also intends to spend about $200 million for boosting human capital in order to support the federal Chief Information Security Officer and U.S. Digital Service. The political slugfest for 5G supremacy at the backdrop dovetailed with the administrative efforts to set guardrails and legislation to safeguard the interests of domestic firms and provided confidence to the industry with adequate funds for modernization efforts.
Meanwhile, China-based wireless carrier China Telecom, which was delisted from the NYSE, intends to launch a secondary offering in the Shanghai Stock Exchange to broaden its source of funds and improve its capital as it prepares for life beyond the United States. Notably, state-owned oil giant, China National Offshore Oil Corp became the latest firm to be pushed out of the NYSE following erstwhile President’s decoupling efforts. With President Biden not making any visible effort to reverse those policies as it continues with an internal review process, several other communist nation-backed firms lie in fray to get delisted. This, in turn, has prompted China to free its coffers to technology firms in order to accelerate their R&D efforts.
Regarding company-specific news, long-term targets, collaborations and capital raise plans primarily took the center stage over the past five trading days.
Recap of the Week’s Most Important Stories
1. The top management of AT&T Inc. (T - Free Report) has debriefed investors about its progress on various operational metrics and reaffirmed its wireless service revenue growth target for 2021. John Stephens, the senior executive vice president and chief financial officer of the company, also shed some light on its continued business transformation initiatives to create long-term value for shareholders.
AT&T is increasingly focusing on its customer-centric business model to attract and retain customers for a lower churn rate. The company is witnessing healthy momentum in its postpaid wireless business with increased adoption of higher-tier unlimited plans. This, in turn, is expected to result in year-over-year growth in wireless customers with unlimited tariff plans. With solid network coverage, the company continues to expect wireless service revenues to grow about 2% in 2021.
2. BlackBerry Limited (BB - Free Report) recently announced that it has collaborated with Desay SV Automotive — a China-based automotive parts manufacturer — to offer dual-screen virtual smart cabin domain controller for safer driving. The new technology is being made widely available in the Tiggo 8 Plus and Jetour X90 models of Chery — a leading China-based automaker.
The operating system of these models is run by BlackBerry QNX real-time operating system and the QNX Hypervisor. It offers a comprehensive secure and intelligent connected vehicle software platform for safe driving decisions and in-vehicle applications. The QNX Hypervisor facilitates multiple operating systems to safely co-exist on the same system-on-a-chip. This has enabled developers to partition and isolate safety-critical and infotainment systems to ensure uninterrupted functioning of critical systems, even if other components fail.
3. Recently, in a virtual investor event, Sonos, Inc. (SONO - Free Report) debriefed investors about its progress on various operational metrics and unveiled the long-term financial targets for 2024. The company also launched Sonos Roam, an ultra-portable smart speaker with immersive audio experience, as it aims to gain a bigger pie in the global audio market.
With a customer-focused business model, the company is increasingly gaining traction as consumers tend to purchase additional products over time. These repeat customers form the crux of its business as the company reportedly reached 11 million homes at the end of fiscal 2020, accounting for about 9% of 116 million affluent homes in its existing markets. Sonos aims to expand this customer base and reach a wider audience in order to tap the $89 billion worth of global audio market.
4. Vodafone Group Plc (VOD - Free Report) is aiming to raise capital to the tune of €2 billion ($2.4 billion) from the IPO of Vantage Towers — its mobile-phone towers unit in Frankfurt. The transaction is likely to be one of the biggest equity market listings in the region in 2021.
Vodafone intends to sell Vantage Towers shares at €22.5-€29 each. The company is likely to utilize the proceeds to reduce its debt burden. Notably, carriers like Vodafone had been plagued by intense price competition and government regulations, while the COVID-19 adversities added to the woes. Consequently, the company is aiming to rake in significant money from its tower assets, with surging demand for increased 5G deployment fueling massive industry consolidation and restructuring.
5. Viavi Solutions Inc. (VIAV - Free Report) and trinamiX GmbH, a leader in infrared sensing technologies, announced a joint development agreement to build a Near-Infrared spectrometer module for integration into consumer devices.
trinamiX intends to build a miniaturized infrared sensing module for integration into smartphones. The module sends out infrared light, which is reflected from the object and then detected by the sensor. The Qualcomm Sensing Hub processes the captured data within the AI engine allowing the mobile platform to analyze the data.
Price Performance
The following table shows the price movement of some of the major telecom stocks over the past week and the six months.
In the past five trading days, T-Mobile has been the best performer with its stock gaining 6.7%, while Qualcomm was the biggest loser with its stock falling 3%.
Over the past six months, Arista has been the best performer with its stock appreciating 24.5%, while Bandwidth has lost the maximum at 10.8%.
Over the past six months, the Zacks Telecommunications Services industry declined 1.2% on average, while the S&P 500 has gained 15.5%.
What’s Next in the Telecom Space?
In addition to 5G deployments and product launches, all eyes will stay on how the Biden administration safeguards the telecom sector against probable external threats.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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