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Telecom Stock Roundup: Ciena Partners BT Group, Qualcomm Secures Approval & More

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In the past week, the U.S. telecom stocks’ trajectory was relatively flat as positive results from the experimental COVID-19 vaccines were offset by fresh rise in coronavirus cases. With the industry pinning hopes on an updated policy framework by the President-elect, high expectations of a mass vaccine hitting the markets in early 2021 based on high efficacy results in the trials acted as tailwinds. However, renewed lockdown measures by local administrative authorities owing to the latest bout of the deadly virus attack triggered uncertainty within the sector, fueling speculations of a sedate overall economic growth.   

Amid this scenario, the Senate passed the Internet of Things Cybersecurity Improvement Act that is aimed to boost the cybersecurity of Internet-connected devices. The Act mandates all private sector entities supplying such devices to the federal government to conform to minimum security recommendations issued by the National Institute of Standards and Technology and notify the government about possible vulnerabilities of the devices against cyber-attacks. The House also unanimously passed the USA Telecommunications Act that apportioned $750 million for the deployment of 5G network across the country. With representatives from the FCC and other federal agencies, the advisory committee formed by the bill would advise on the grant funding in order to spur innovation within the domestic market and thwart the hegemony of China-based telecommunications companies.

Meanwhile, Huawei is reportedly mulling to divest its budget smartphone brand Honor to safeguard its smartphone business in the face of stiff U.S. sanctions. The company is aiming to separate the Honor brand from its network equipment and other business operations that have largely faced the wrath of stringent export restrictions on accusations of data intrusion and cyber espionage. However, the company is likely to retain its flagship Huawei smartphones post the likely divesture to Shenzhen government-owned tech enterprise firm.

Regarding company-specific news, strategic collaborations, deals and government approval for export to China primarily took the center stage over the past five trading days.

Recap of the Week’s Most Important Stories

1.     Blue Planet, an operating business division of Ciena Corporation (CIEN - Free Report) , has secured a contract for undisclosed amount from British multinational telecommunications firm BT Group plc to augment the digital experience of end users. In particular, the state-of-the-art automation software from Blue Planet is likely to enhance the speed for enterprise customers for a seamless access to BT Group’s cloud-based collaboration tools.

The Blue Planet software offers key insights into the network to enable service providers optimize business processes spanning IT and Network functions. Working across multi-vendor domains, the automation software facilitates the delivery of end-to-end services with fast time to market at reduced operational costs. BT Group aims to leverage these service capabilities to offer superior end-user experience by eliminating the need for human intervention.
2.    Qualcomm Incorporated (QCOM - Free Report) has secured green signal from the Trump administration to supply 4G chips to China-based Huawei Technologies, paving its way to provide some key raw materials for 4G mobile devices despite stringent U.S. trade restrictions.

Although the details of the government license is yet to be divulged, the approval marks a softer stance by the authorities against the communist nation-backed telecommunications equipment manufacturer. The fresh supply of Qualcomm chips is likely to offer some respite to beleaguered telecom firm, even though these 4G chips are not expected to have a significant overall impact as consumers tend to shift to newer 5G models.

3.     In a concerted effort to improve the operations of enterprise customers, US Cellular Corporation (USM - Free Report) recently enhanced its self-service IoT portal ConnectHQ by leveraging the 5G and edge capabilities of Nokia Corporation. In particular, the new ConnectHQ platform will be powered by Nokia WING (Worldwide IoT Network Grid) to better manage large-scale IoT deployments and optimize investments.

Riding on the pay-as-you-go business model, Nokia WING facilitates operators to scale up 5G IoT services faster without additional infrastructure investments. This cost-effective platform offers ultra-low latency, high security and enhanced throughput to address high volume of 5G data driven by a distributed, flexible architecture. ConnectHQ aims to capitalize on these competencies to enable consumers better manage connectivity issues across several wireless IoT devices.

4.      Nokia Corporation (NOK - Free Report) has secured an exclusive contract for an undisclosed amount from Swisscom AG to deploy its FastMile 5G receivers in rural areas of Switzerland for improved superfast broadband connectivity. The extensive use of the solution is likely to enable the carrier to meet the high demand for fast Internet access across the rural communities as consumers tend to consume more bandwidth-intensive applications.

Riding on industry-leading signal gain capability, it is likely to help Swisscom address the exponential growth in bandwidth demand of its residential and business customers. Combining a high-gain antenna and modem in a small form-factor, the FastMile receivers connect the home network with a simple Power over Ethernet connection.  

5.      BlackBerry Limited (BB - Free Report) has collaborated with a self-driving truck technology provider, Plus, to integrate its much-acclaimed QNX technology in the latter’s Class 8 self-driving trucks. Plus is the first automated truck developer to capitalize on the QNX software for its revolutionary autonomous driving systems.

The company will particularly leverage the QNX Operating System for Safety software solution as part of the collaboration. Notably, the innovative offering from BlackBerry is likely to not only bolster Plus’ product development endeavors but also advance the global deployment and commercialization of self-driving trucks with highest safety standards.

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, Lumen Technologies has been the best performer with its stock gaining 2.7%, while Motorola was the biggest decliner with its stock falling 1.4%.

Over the past six months, Qualcomm has been the best performer with its stock appreciating 45.9%, while Juniper was the sole decliner with its stock falling 6.4%.

Over the past six months, the Zacks Telecommunications Services industry has rallied 9.5% on average and the S&P 500 has gained 20.1%.

What’s Next in the Telecom Space?

In addition to the 5G deployments and product launches, all eyes will remain glued to how the administration continues to safeguard the interests of domestic telecom firms from perceived Chinese threats.

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

See the 5 high-tech stocks now>>