The telecom industry experienced a good run on the bourse last week as most of the key stocks traded in the green. Although the space lacked excitement, a few events are worth noting.

U.S. telecom behemoth Verizon Communications Inc. (VZ Quick QuoteVZ - Free Report) finalized its deal with Eqinix Inc. (EQIX Quick QuoteEQIX - Free Report) to divest its data center business to the latter. As per the deal, Verizon has decided to sell 24 data center sites in the U.S. and Latin America to Equinix for $3.6 billion, in an all-cash transaction. The Verizon-Equinix deal is expected to close by mid-2017, subject to regulatory approvals.

Telecom giant, AT&T Inc. (T Quick QuoteT - Free Report) has initiated next-generation 5G technology trials in partnership with Ericsson AB (ERIC Quick QuoteERIC - Free Report) using the millimeter wavelength technology. The trial was carried out in Intel Corp.’s (INTC Quick QuoteINTC - Free Report) Austin office. Moreover, the company recently joined forces with Sirius XM Connected Vehicle Services, a subsidiary of Sirius XM Holdings Inc. (SIRI Quick QuoteSIRI - Free Report) , to provide 4G LTE connectivity. The service will support Sirius XM Guardian – an in-vehicle package of Sirius XM.

Meanwhile, the fourth largest national wireless operator, Sprint Corp. (S Quick QuoteS - Free Report) plans to increase its spectrum leaseback transaction to $7 billion from $3.5 billion to pay off higher interest bearing loans. This October, Sprint announced a spectrum leaseback transaction to ease liquidity pressure on its balance sheet. The airwaves in consideration include those in the band of 1.9 GHz and 2.5 GHz and are valued at around $16.4 billion. Although the total proceeds of the transaction will come to around $7 billion, Sprint may benefit from lease payments which will be lower than that of the market.

Leading regional wireline service provider CenturyLink Inc. is forging ahead with its over-the-top (OTT) service plans. The company plans to launch its 17-channel (in addition to a set of local channels) OTT services in the beginning of 2017. The company has initiated trials of its OTT video services in four new markets, outside its Prism footprint. OTT is an application or service that is used for the delivery of audio, video and other media over the Internet. In addition, the company ison track to deliverfiber-to-the-premises (FTTP) 1 Gbps services in three states – Nebraska, North Dakota and South Dakota.

According to a recent report by LightReading, leading cable MSO (multi service operator) Charter Communications Inc. (CHTR Quick QuoteCHTR - Free Report) has decided to rebrand its Enterprise Business Service division within the next three weeks. This signals the company’s intent to aggressively pursue high-speed fiber deployment for its enterprise clients. Charter Communications recently acquired two big cable MSOs, namely, Time Warner Cable and Bright House Networks, which positioned it as the second largest cable MSO after Comcast Corp. (CMCSA Quick QuoteCMCSA - Free Report) . Both Charter Communications and Comcast currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

As pera recent report by TechCrunch, an online publisher of technology industry news, Amazon.com Inc. (AMZN Quick QuoteAMZN - Free Report) will start offering Frontier Communications Corporation’s Internet service plans on its product site. Toward this end, Amazon recently added Frontier Communications to ‘Amazon Cable Store’, which is now rebranded as ‘Amazon Internet | TV | Phone’.

Read the last Telecom Stock Roundup for Dec 01, 2016.

Recap of the Week’s Most Important Stories

1.    The Verizon data center deal will expand Equinix's global reach by boosting its operations in the U.S. and Latin America and help it foray into new markets like Bogotá, Culpeper and Houston. The deal will expand Equinix’s capacity in the existing markets of Atlanta, Denver, Miami, New York, São Paulo, Seattle and Silicon Valley. However, the divestiture does not affect Verizon’s managed hosting and cloud platform or its data center services across 27 sites in Europe, Asia-Pacific and Canada. (read more: Verizon to Divest 29 Data Centers to Equinix for $3.6B.)

2.    Sprint plans to sell 14% of its spectrum assets to a wholly owned entity. Sprint will then lease back the same under a long-term agreement. The proceeds from the sale will help Sprint clear higher interest bearing loans thereby improving its financial condition. Sprint is not new to such complex sale and leaseback transactions. Notably, in 2015, the company entered into a similar arrangement with another Special Purpose Entity, Mobile Leasing Solutions, LLC, for $1.1 billion in cash. (read more:  Sprint Plans to Double $3.5B Spectrum Leaseback Deal.)

3.    AT&T has collaborated with Ericsson to conduct its first ever 5G public demo. The test also featured online video streaming at 4K resolution and real time camera feeds. Going forward, AT&T and Ericsson will test 5G VoIP services using 15 GHz and 28 GHz spectrum bands. The next-gen 5G network will provide 50 times the throughput of the currently available standard 4G LTE network. Further, 5G technology is designed to be more power efficient than any other standard wireless network available. (read more:  AT&T Collaborates with Ericsson to Conduct 5G Trials.)

4.    The rapidly developing business services division has become a major windfall for cable MSOs in the U.S., and Charter Communications being no exception to this trend has been aggressively targeting this space. Notably, in the third quarter of 2016, the company’s commercial revenue totaled $1.38 billion. Meanwhile, Charter Communications has launched a website – enterprise.spectrum.com – that will offer content and particulars regarding reliable and scalable network solutions specifically for mid and large-sized business organizations. (read more:  Charter Communications to Restructure Enterprise Business.)

5.    The urge to boost its broadband subscriber base has been the main motive of CenturyLink behind the OTT service launch. After the loss of 40,000 high-speed broadband subscribers in the last reported third quarter of 2016, CenturyLink is focused on putting a check on churn in the broadband segment. Meanwhile, to drive broadband growth, the company is looking to reach out to inaccessible rural areas through its OTT services. (read more:  CenturyLink Favors OTT Over IPTV, Boosts Broadband Base.)

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. Sprint (15.19%), T-Mobile US (7.28%), AT&T (4.02%) and America Movil (3.22%) gained considerable value over the same time frame. However, over the last six months, the price performance of most telecom stocks was mixed. Among the stocks that gained significantly, notable ones are Sprint (132.98%), T-Mobile US (32.98%) and Comcast (9.66%). On the other hand, Vodafone lost 24.22% in the same time period.

What’s Next in the Telecom Industry?

We do not foresee any significant changes in the telecom industry or overall global economic factors that can likely affect the industry in the coming week. However, on Dec 14, the Fed is likely to take a decision on interest rate hike which in turn may result in market volatility at least in the short term.

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