Telecom Stock Roundup: DISH & T-Mobile in Merger Talk, Vodafone & Liberty Global to Swap Assets - Analyst Blog
Last week, all major developments in the U.S. telecom sector were related to merger and acquisitions. The scenario outside the U.S. has been pretty much the same. As per The Wall Street Journal report, DISH Network Corp. DISH and T-Mobile US Inc. TMUS are currently negotiating for a possible merger.
In the U.K., Vodafone Group Plc. VOD has announced that it is in talk with Liberty Global Plc. LBTYA for the exchange of some telecom assets between the companies. Meanwhile, Nokia Corp. NOK received the approval of the board of directors of Alcatel-Lucent SA ALU for its proposed takeover of the latter.
Back in the U.S., Comcast Corp. CMCSA has agreed to acquire Visible World in order to strengthen its foothold in the data-driven TV advertisement market. Additionally, research firm IHS Infonetics has provided a bright picture for the LTE infrastructure market for the rest of 2015. (Read the last Telecom Stock Roundup for Jun 4, 2015.)
Recap of the Week’s Most Important Stories
1. The Wall Street Journal recently reported that DISH is currently negotiating with T-Mobile US for a possible takeover of the latter. However, the purchase price is yet to be finalized. A possible merger between DISH and T-Mobile US has been making the rounds for over a year in the industry circle. However, nothing concrete has materialized so far.
As per the financial results of the last 12-months, the combined entity of DISH and T-Mobile US will garner around $45 billion of revenues and $1.5 billion in net profit. (Read More: DISH Network - T-Mobile US in Talks: A Merger in the Cards?)
2. According to a recent Bloomberg report, the U.K. telecom giant Vodafone and cable TV behemoth Liberty Global are negotiating for a possible asset swap deal. Currently, the negotiation is at preliminary stage and neither side has officially confirmed anything.
Over the last couple of years, the U.K. telecom sector has been witnessing a wave of consolidation. A possible merger between Vodafone and Liberty Global has been making the rounds for over a year in the industry circle. However, nothing concrete has materialized so far. (Read More: Will Vodafone and Liberty Global Exchange Telecom Assets?)
3. Nokia Networks recently received the support of the broad of directors of Alcatel-Lucent for its proposed acquisition of the latter. In Apr 2015, Nokia Networks had entered into a definitive agreement with Alcatel-Lucent for its full acquisition for a total consideration of Euro 15.6 billion (approximately $16.6 billion). The deal is expected to close by mid-2016 subject to approval by both the company’s shareholders and the regulatory authorities.
Notably, Nokia shareholders will command a 66.5% stake in the merged entity while Alcatel-Lucent shareholders will hold the remaining 33.5%. (Read More: Nokia Networks Moves a Step Closer to Alcatel-Lucent Buy.)
4. According to a recent report by The Wall Street Journal, Comcast has decided to acquire the NY-based Visible World, a leading provider of targeted-advertisement for TV programs. If the deal materializes, Comcast, the largest cable MSO in the U.S., will get a solid foothold in the thriving data-driven TV advertisement market. However, the terms of the deal are yet to be released. Last year, Comcast acquired online video ad-serving company, FreeWheel Inc.
The takeover enables Comcast to place advertisements on its own content through several platforms, including TVs and handheld devices. (Read More: Comcast to Buy Visible World, Eyes Data-Driven TV Ad Market.)
5. Long-Term Evolution (LTE), the most sought after next-generation (4G) super-fast wireless communications technology, is rapidly gaining momentum worldwide. 4G wireless networks primarily aim to cope with the substantial rise in demand for high-speed wireless data services and mobile video. According to a recent report by research firm IHS Infonetics, the LTE infrastructure market is expected to reach $23 - $24 billion of worth in 2015.
While the U.S. is expected to maintain the momentum in LTE network growth over the near term, the major impetus is likely to come from the emerging markets of Asia-Pacific. (Read More: LTE Infrastructure Market Flourishes, Vendors Poised to Gain.)
Price Performance
The following table shows the price movement of major telecom players over the past week and the last six months.
Company | Last Week | Last 6 Months |
VZ | -3.28% | +5.19% |
T | -0.88% | +9.94% |
S | -4.42% | +4.13% |
TMUS | +0.86% | +52.57% |
VOD | -1.32% | +8.94% |
CHL | -3.68% | +11.69% |
AMX | -2.33% | -4.03% |
CMCSA | -1.84% | +5.68% |
DISH | +2.46% | +2.82% |
Over the last five trading sessions, share price movement of most major telecom stocks was negative. DISHgained the maximum value of 2.46% while Sprint Corp. S depreciated the most at 4.42% over the same time frame. However, over the last six months, the price performance of key telecom stocks was mostly positive. Although America Movil SAB AMX fell 4.03%, T-Mobile USand China Mobile Ltd. CHL rallied a considerable 52.57% and 11.69%, respectively, over the same time period.
What’s Next in the Telecom Sector?
We do not expect any significant change in the telecom industry or in the overall global economic factors that might affect the industry in the coming week. Therefore, we expect stocks to trade in line with the broader market movement at least in the near-term.
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SPRINT CORP (S): Free Stock Analysis Report
NOKIA CP-ADR A (NOK): Free Stock Analysis Report
DISH NETWORK CP (DISH): Free Stock Analysis Report
AMER MOVIL-ADR (AMX): Free Stock Analysis Report
ALCATEL ADS (ALU): Free Stock Analysis Report
LIBERTY GLBL-A (LBTYA): Free Stock Analysis Report
CHINA MOBLE-ADR (CHL): Free Stock Analysis Report
COMCAST CORP A (CMCSA): Free Stock Analysis Report
VODAFONE GP PLC (VOD): Free Stock Analysis Report
T-MOBILE US INC (TMUS): Free Stock Analysis Report
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