The telecom industry experienced a solid run on the bourses in the past one week as most of the key stocks traded in the green. Several important developments also took place in the meantime.

U.S. telecom behemoth AT&T Inc. (T Quick QuoteT - Free Report) announced the completion of its buyout of QuickPlay Media Inc., a leading digital streaming distribution platform. Financial terms of the agreement were, however, kept under wraps. The deal should enhance AT&T’s Internet video streaming capabilities – a domain where the company is barely active right now.

Leading cable MSO (multi service operator) and media company Comcast Corp. (CMCSA Quick QuoteCMCSA - Free Report) confirmed that it has decided to acquire certain useful assets of Icontrol Networks Inc., a major developer of Internet-of-Things (IoT) and smart-home products.

Comcast will acquire Icontrol’s Zigbee-based smart home products and the majority of its patents. These products basically consist of Icontrol’s "Converge" software platform, which is already used by Comcast’s Xfinity Home touch-screen panel and back-end servers. However, financial terms of the deal are yet to be disclosed.

Meanwhile, Qualcomm Inc. (QCOM Quick QuoteQCOM - Free Report) , the largest global mobile chipset manufacturer, has filed a lawsuit against smartphone maker, Meizu, in China over the payment of licensing fees. In 2015, the company had inked an agreement with the Chinese government for charging Chinese companies for the use of its intellectual properties (IP). The lawsuit will be a litmus test of the implementation of the agreement by Chinese authorities.

Back home, Windstream Holdings Inc. has sought permission from the U.S. telecom regulator Federal Communications Commission (FCC) to discontinue its operator assisted legacy voice services across its ILEC (incumbent local exchange carrier) and CLEC (competitive local exchange carrier) territories.

Outside the U.S., several notable developments also took place in the telecom space. BCE Inc.’s (BCE Quick QuoteBCE - Free Report) subsidiary, Bell Canada has gained Manitoba Telecom Services (MTS) shareholders’ approval for the latter’s acquisition. Shareholders gave the nod after Bell Canada made a $2.5 billion acquisition offer for the Manitoba-based MTS in a bid to enhance its presence in western Canada.

Spanish telecom behemoth Telefonica SA (TEF Quick QuoteTEF - Free Report) is facing the brunt of Brexit, Britain’s vote to leave the European Union. According to Bloomberg, the company is considering seriously to postpone the planned initial public offering (IPO) of its Telxius infrastructure unit and the possible IPO of its U.K. wireless unit O2.The likelihood of a delay is the result of market volatility apprehended worldwide in the wake of the Brexit referendum.

Televisa S.A.B’s (TV Quick QuoteTV - Free Report) Univision division has managed to generate more than $135 million in advertising sale in the Copa America Centenario tournament, more than double the amount it paid for the tournament’s broadcasting rights. In fact, per a Bloomberg report, the company has exceeded its revenue expectations by over 20%. This should be good for Univision given that it is planning an initial public offering (IPO) in the second half of this year.

Read the last Telecom Stock Roundup for Jun 23, 2016.

Recap of the Week’s Most Important Stories

1.    AT&T has been relying on QuickPlay to deliver video for its U-verse TV Everywhere offering and will now be using the QuickPlay platform to deliver content for the three new DIRECTV streaming video packs it plans to introduce by year-end. The company announced plans to offer a version of its DIRECTV satellite TV service on the Internet, which does not require customers to have a satellite dish, a set-top box or an annual contract. (read more: AT&T Closes Acquisition of Video Streaming Service QuickPlay.)

2.    Icontrol’s smart-home product platform has a strong clientele in the North American cable MSO market. Comcast itself is a major customer of Icontrol. Apart from Comcast, other significant customers include Time Warner Cable, a division of Charter Communications, Roger Communications and Cox Communications. Small-sized cable TV operators are also gradually shifting to Icontrol’s platform. However, in recent years, Icontrol has been facing waning demand for its products (read more: Comcast to Partially Acquire Icontrol Networks.)

3.    According to Qualcomm, as many as 100 Chinese companies had agreed to pay licensing fees, with the exception of Meizu. By using Qualcomm’s technology without a license, Meizu could hamper Qualcomm’s competitive edge in the country, as licensees will incur higher costs of manufacturing smartphones. Moreover, technology licensing fees comprise a major chunk of revenues for Qualcomm. Should the Chinese authorities fail to enforce the licensing agreement properly, the trend of non-payment of these fees may spill over to other licensees, which will hurt Qualcomm’s top line, going forward. (read more: Qualcomm Files Lawsuit Against China-Based Meizu.)

4.    Telecom service providers are moving toward IP-based network as more and more enterprise customers are opting for IP-enabled cloud services. The services that Windstream wants to shut down include operator assisted calls requesting Bill to a Third Number, Busy Line Verify, Busy Line Interrupt, Collect Calling and Person to Person. From its May 2016 billing cycle, the company is informing its customers about the likely closure of these services. (read more: Windstream Holdings to Close Legacy Voice Service.)

5.    Presently, MTS offers broadband and IPTV service to around 70% homes in Manitoba. Through the latest acquisition, Bell Canada will be able to expand its broadband Internet subscriber base by 6.6% and IPTV customer base by 8.6%. Bell Canada’s data center and cloud computing operations are also likely to get a boost with the integration of MTS’ existing data center in Winnipeg. Thus, the horizontal integration of the MTS buyout will drive Bell Canada’s top line, going forward. (read more: Bell Canada Gets Shareholder Approval for MTS Acquisition.)

Price Performance

The following table shows the price movement of the major telecom players over the past week and the last six months.

Over the last five trading sessions, share price movement of most of the major telecom stocks was positive. However,Vodafone lost a significant (5.93%) value in the same period. Similarly, over the last six months, the price performance of most of the key telecom stocks was positive. Among the stocks that gained significantly were AT&T (25.71%), Sprint (23.42%), Verizon (20.43%) and Comcast (13.75%). On the contrary, America Movil (14.52%) depreciated the most over the same time frame.

What’s Next in the Telecom Sector?

We do not foresee any significant change in the telecom industry or in overall global economic factors that can have a bearing on the industry in the coming week. Consequently, we expect stocks to trade in line with the broader market movement.

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