The U.S. telecom industry remained rather subdued last week. Nevertheless, a few developments are worth taking note of.

Leading pay-TV operators in the U.S., namely Comcast Corp. (CMCSA Quick QuoteCMCSA - Free Report) and AT&T Inc. (T Quick QuoteT - Free Report) plan to raise bundled pay-TV offering fees. Comcast will increase the monthly price of its TV, Internet and video services, by an average of 3.8%. The effective date of the fee increase will however vary from one market to another, with some areas seeing price hikes from as early as Jan 1, 2017 and others at a later date.

On the other hand, AT&T announced a price hike for eight of its nine base packages of DirecTV from $2 to $6 per month. The new rates will be charged from Jan 22, 2017.

Meanwhile, U.S. telecom behemoth Verizon Communications Inc. (VZ Quick QuoteVZ - Free Report) recently received the final nod from the City of Boston to offer pay-TV services. The license approval is based on the $300 million partnership announced by Verizon and Boston in Apr 2016 to install the former’s high-speed FiOS Internet service throughout the city of Boston.

In the wireless front, U.S. national wireless carrier Sprint Corp. (S Quick QuoteS - Free Report) has rolled out attractive offerings ahead of Christmas. Recently, the wireless carrier announced that it will provide unlimited high-speed data through its ‘Unlimited Freedom’ and ‘Sprint Open World’ plans. The data speed is said to be the highest offered by a local provider and the offer is valid for a limited span, from Dec 9, 2016 – Mar 31, 2017.

Wireless tower operator, American Tower Corp. (AMT Quick QuoteAMT - Free Report) , recently announced its decision to acquire Argentina-based Comunicaciones y Consumos, SA (CyCSA). Per the deal, American Tower will buy 1,000 urban wireless sites and a 2,500 km fiber optic network. Through this deal, American Tower will gain the rights to deploy mobile infrastructure in various localities across the country. However, the deal amount has not been revealed.

In a separate development, market leader in mobile chipsets, Qualcomm Inc. (QCOM Quick QuoteQCOM - Free Report) , recently forayed into the server market. This area is presently dominated by Intel Corp. (INTC Quick QuoteINTC - Free Report) . However, Qualcomm’s entry in this intensely contested yet lucrative data center chipset space with its latest 10nm Centriq ARM-based processors is a direct challenge to Intel. Both Qualcomm and Intel currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Outside the U.S., in a favorable turn of events, fixed-line telephone subsidiary of Mexican telecom giant America Movil SAB (AMX Quick QuoteAMX - Free Report) , Telmex, has been granted extended validity for its concession by Mexican telecom regulator, Federal Telecommunications Institute (IFT). Recently, the regulatory body agreed to extend the validity of Telmex’s concession to build, install, maintain, operate and exploit a public telephone network for another 30 years starting from Mar 11, 2026.

Read the last Telecom Stock Roundup for Dec 08, 2016.

Recap of the Week’s Most Important Stories

1.    After the pay-TV fees hike, Comcast will receive an extra $48 per year from each of its customers.The ‘Broadcast TV Fee’ will increase from $5 to $7 a month, while the fee that covers Regional Sports Networks will be up from $3 to $5 a month. Combined, that's a change from $8 to $12 per month. Comcast has started notifying its customers and city officials about the price increase plans through letters and recent bills, along with a rate sheet that shows the new charges for various services. (read more :Comcast to Hike Monthly Fees by 3.8% from 2017.)

2.    AT&T’s 'U-Family' and 'U-Family All In' customers will see a $2 per month increase while U-100 will witness a hike of $3 a month. The company’s ‘U-200’ and ‘U200 All In’ as well as ‘U-200 Latino’ & ‘U200 Latino All In’ and  ‘U300’ customers will have to pay $5 extra per month for the service. The rates of U-400 series, U 450 to U 450 Latino All In packages will increase by $8 per month.On Dec 5, the telco announced a price hike for eight of its nine base packages of DirecTV from $2 to $6 per month. (read more:  AT&T to Raise U-Verse Service Prices Again in January.)

3.    FiOS is Verizon’s fiber optic Internet and television offering. The company aims to build a fiber optic platform in the entire city of Boston. The rollout is expected to be executed over the next six years. To date, Verizon has placed more than 160 miles of fiber throughout Boston, including large-capacity fiber-optic "feeder" lines above and underneath city streets. Verizon expects to serve 25,000- 30,000 homes and businesses through its FiOS by December end. (read more:  Verizon Gains Boston Cable TV License, Aims to Install FiOS.)

4.    The CyCSA buyout will add to American Tower’s existing portfolio of around 144,000 sites. Management further claims that this acquisition will open up avenues to enter a larger and attractive market, helping the company generate more revenues. The company has been engaged in the expansion of its footprint in Argentina. In Nov 2016, it entered into an agreement to buy several wireless sites, equipment and fiber assets on infrastructure owned by Argentinian utilities along with several indoor wireless sites across Latin America. (read more:  American Tower to Buy CyCSA, Eyes Argentina Market.)

5.    Customers with LTE/GSM capable devices, a targeted Unlimited Freedom plan and Sprint Open World on their account before Dec 9, 2016 are eligible to avail the ‘Sprint Open World Winter Promotion’ plan. The offer is also available with Unlimited Freedom; Unlimited, My Way; Everything Data; Simply Everything/My All-In; $70/$75 UNL/Best Buy One and Employee & SWAC base plans. The offering is basically part of the ‘Sprint Open World Winter Promotion’ and is valid for customers traveling to Mexico and 25 select Caribbean destinations. (read more:  Sprint Offers Unlimited High Speed Data in Mexico & Caribbean.)

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 witnessed a mixed trend. Sprint (6.07%) and China Mobile (3.94%) lost considerable value over the same time frame. However, over the last six months, the price performance of most telecom stocks was predominantly positive. Among the stocks that gained significantly are Sprint (119.79%), T-Mobile US (35.74%), DISH Network (13.41%) and Comcast (12.30%). On the other hand, Vodafone lost 20.71% in the same time period.

What’s Next in the Telecom Space?

We do not foresee any significant changes in the telecom industry or overall global economic factors that can affect the industry in the coming week. Consequently, we expect stocks to trade in line with the broader market.

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