The telecom industry had a steady run on the bourse last week with most of the key stocks trading in the green. A few developments even made it to the headlines.

U.S. telecom behemoths AT&T Inc. (T Quick QuoteT - Free Report) and Verizon Communications Inc. (VZ Quick QuoteVZ - Free Report) have decided to suspend their marketing campaign on Google’s YouTube site. The reason behind the decision is the appearance of their ads alongside offensive and highly controversial videos promoting adult contents, terrorism and hate speeches. Notably, Google is a division of Alphabet Inc. (GOOGL Quick QuoteGOOGL - Free Report) .

According to Reuters, Comcast Corp. (CMCSA Quick QuoteCMCSA - Free Report) – the largest cable multi service operator in the U.S. and a media giant - is considering a strategic decision to rebrand its existing TV streaming service, Stream. The company intends to make it available across its footprint. The new service called “Xfinity Instant TV” will be available in larger U.S. markets such as Philadelphia, Washington D.C. and Chicago. It is expected to start in the third quarter of 2017.

Notably, as per a recent Bloomberg report, Comcast has gained rights from several unnamed cable networks to offer online TV services nationwide. The cable MSO reportedly got the rights using the ‘most favored nation’ clauses in contracts. This, for the first time, allows Comcast to sell video services to new cities outside its regional territories, like New York and Los Angeles.

Media reports suggest that AT&T is planning to stop support for parts of its long-standing U-verse brand by the end of May. The brand consists of fiber-based triple-play video (TV), voice (telephony) and high-speed broadband (Internet) offerings. This move is in line with AT&T’s strategy to focus on streaming development application development on core platforms.

By venturing into the over-the-top (OTT) space, AT&T joined the likes of DISH Network Corp.’s Internet TV service - Sling TV and Sony Corp.’s Playstation Vue. The U-verse move is expected to involve ending support for U-verse streaming through the XBOX ONE, Windows and U-verse.com applications.

Meanwhile, as per a recent report by FierceCable, U.S. telecom behemoth Verizon Communications has collaborated with Luxembourg-based satellite operator, SES, to test the latter’s Ultra High Definition (UHD) platform in order to deliver 4K content to FiOS customers.Verizon currently carries 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., BCE Inc.’s (BCE Quick QuoteBCE - Free Report) subsidiary, Bell Canada on Mar 27, announced plans to invest $854 million in a project that aims to connect millions of homes and businesses in Montreal with their fastest broadband fibre technology. This investment, one of the largest-ever communications infrastructure project in Quebec, is likely to generate almost 2,700 direct and indirect jobs along with an additional $2.2 billion for other economic development purposes.

Read the last Telecom Stock Roundup for Mar 23, 2017.

Recap of the Week’s Most Important Stories

1.    The decision of Verizon and AT&T to pull backall their advertising from Google's non-search platforms, including YouTube as well as third-party websites that Google partners with, issignificant as telephone operators are among the biggest block of advertisers in corporate America. The two companies together spent $6.6 billion in advertisement in 2015. According to Kantar Media, Verizon and AT&T were the third and fourth largest ad spenders in the U.S. respectively, in 2016.  (Read more: AT&T & Verizon Suspend Marketing Advertisements from YouTube)

2.    A major difference between Comcast’s streaming services and other companies offering is that Xfinity Instant TV will be available solely to the company’s high-speed broadband (Internet) subscribers. The service won’t count against Comcast subscribers’ Internet data caps unlike other competitor’s services. As a result, Comcast’s high-speed Internet customers will gain significant advantage over the customers of its rival firms.  (Read more:  Is Comcast Planning to Relaunch TV Streaming?)

3.    AT&T plans to shift some U-verse customers to satellite TV service provider DIRECTV, while some will be transferred to its OTT online streaming service, DirecTV Now. This strategic move bodes well with U-verse brand performance wakening compared with the improved business of DIRECTV. Moving forward, this in turn is expected to free up crucial bandwidth on its fiber-optic network, which AT&T can utilize to offer higher data transmission speeds to high-speed broadband users.  (Read more:  What's Going on with AT&T's U-verse Service?)

4.    Bell Canada has partnered with a number of local suppliers such as Asplundh, Effigis Geo-Solutions, G-Tek, Infrastructel, Telecon, TCI and TRJ Telecom to complete the Montreal project. The company will install more than 7,000 kilometres of new fibre and upgrade 25 central offices across Montreal. Further, more than 90% of Bell's network in the city is on aerial structures which will help speed up the deployment of the new fibre links.  (Read more:  BCE's Arm Invests $854M, Boosts Fibre-Optics Network Suite)

5.    Verizon’s FiOS' fiber network, with its adequate bandwidth, is apt for delivering 4K UHD to customers. The collaborative agreement between SES and Verizon marks an important milestone in the development of Ultra HD solution. The trial will eventually help Verizon offer the next generation of HD programming to FiOS TV customers throughout the U.S. and prepare for a wider 4K rollout in the near future. (Read more:  Verizon Teams Up with SES, 4K Content for FiOS TV Customers)

Price Performance

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

In the last five trading sessions, share price movement of most of the major telecom stocks was positive. America Movil (3.94%) gained significantly in the same time frame. Likewise, in the last six months, the price performances of the major telecom stocks were positive barring Verizon. Among the stocks that gained substantially are T-Mobile US (38.57%), Sprint (27.90%), America Movil (27.80%), Charter Communications (20.73%), DISH Network (14.99%) and Comcast (12.21%).

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. However, U.S. personal consumption expenditure data, personal disposable income data and the third estimate of the fourth-quarter 2016 U.S. GDP are set to be released in the coming week. We believe these data will be closely monitored by investors for a peek into the current U.S. macroeconomic picture.

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