Telecom Stock Roundup: Verizon Enhances Unlimited Data Plan, Comcast Rollout Xfinity Mobile
Although most major telecom stocks lost value over the last week, the sector witnessed a number of important events. Large telecom operators such as, Verizon Communications Inc. VZ, AT&T Inc. T, T-Mobile US Inc. TMUS and Sprint Corp. S grabbed headlines.
Verizon has restructured and modernized its unlimited wireless data plans, in order to reach out to customers’ more diversified needs. Verizon Unlimited has evolved into Go Unlimited, Beyond Unlimited and Business Unlimited. For prepaid lovers, there’s also a Prepaid Unlimited plan for $80 per month, with unlimited data, talk and text, DVD-quality streaming and free calling to Mexico and Canada. Without line limitations in Business Unlimited, Verizon Communications aims to target business entities.
Moreover, Verizon has teamed up with online retailing giant, Amazon.com Inc. AMZN, to deliver virtual network services at a global scale. The company has also announced plans of entering dedicated public safety network business to support emergency services providers.
AT&T has unveiled its own Android tablet, Primetime to expand its product portfolio. Notably, the key feature of the company’s exclusive tablet is TV Mode, which allows the customer to access their favorite pre-installed video apps such as DIRECTV and DirecTV Now, in a touch or swipe. Furthermore, AT&Thas initiated the deployment of G.fast-based services, which is in line with its efforts to expand its high speed broadband services.
In a separate development, citing an unnamed source, Reuters recently reported that AT&T is exploring a number of strategic options including an outright sale of its home security business – Digital Life. The sale proceeds are likely to be utilized to reduce the company’s huge debt burden, which stood at approximately $143.7 billion as of June 30, 2017. AT&T currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Meanwhile, T-Mobile US has launched promotional offers for two new LG handsets, G6 and V20.The operator launched buy-one, get-one-free deals on both G6 and the V20 for users who buy phones on T-Mobile’s equipment installment plans. Additionally, the companyhas started the deployment of 600-MHz low-band spectrum on its LTE network.In fact, T-Mobile US is the world’s first to launch 4G in 600 MHz band. Its first deployment sites are Cheyenne and Wyoming.
Sprint recently unveiled its Sprint MultiLine, an enterprise-grade solution within its Bring Your Own Device (BYOD) portfolio. Sprint MultiLine delivers a solution that allows businesses to add a company-owned number to their employees' personal phones for calling and texting on any mobile device and on any underlying carrier.
Largest cable multi service operator and media giant Comcast Corp. CMCSA completed the nationwide rollout of its wireless services under the “Xfinity Mobile” brand.Based on a Mobile Virtual Network Operator (MVNO) agreement with Verizon, Xfinity Mobile will be using Verizon's 4G LTE wireless network.The service is available across each of Comcast’s distribution platforms, including the company’s newly redesigned retail stores and a new online experience at XfinityMobile.com.
Leading wireless chipset manufacturer, Qualcomm Inc. QCOM, is forging ahead with new deals to bolster its position in the Artificial Intelligence (AI) Research. To add to it, Qualcomm Technologies, Inc., a subsidiary of Qualcomm announced the acquisition of Scyfer B.V., a company affiliated to the University of Amsterdam.
Outside the United States, Canadian telecom operator TELUS Corp.’s TU global arm, TELUS International, a leading global business process outsourcing (BPO) provider, has acquired Voxpro,Ireland’s largest provider of customer service, technical support and sales operations solutions for international brands.
Read the last Telecom Stock Roundup for Aug 17, 2017.
Recap of the Week’s Most Important Stories
1. While remodeling its unlimited data plans, Verizon Communications seems to have compromised with the quality of streaming video. We believe that the company’s decision to throttle the quality of streaming video is an attempt to check how consumer’s preference over network and video streaming varies, with the prices charged. Charging customers, who want high-resolution video can help Verizon Communications make more money off the unlimited plans. (Read more: Verizon Communications Restructures Unlimited Data Plans)
2. At present, Xfinity Mobile is being offered with data plan options - unlimited data plan for $45 per month for up to five lines with no usage limits or By the Gig plan for $12 per month for each gigabyte of cellular data used. Users who primarily rely on WiFi can choose the $12. Further, consumers can also get access to 18 million Wi-Fi hotspots with Xfinity Mobile. Comcast claims that customers can save up to 30% on their monthly wireless bills with Xfinity Mobile service. (Read more: Comcast Enters Wireless Arena with Xfinity Mobile)
3. In order to take on the FirstNet-AT&T nationwide public safety network, Verizon stated that it will enhance its 4G LTE network to allow first responders priority access nationwide. In an apparent bid to ensure dedicated capacity for first responders, Verizon has decided to separate public-safety network from its commercial networks. The priority access and pre-emption services will be available to public safety when necessary and at no extra cost. (Read more: Verizon to Enter Dedicated Public Safety Network Business)
4. AT&T entered the U.S. home security and automation market in 2013 in an effort to enhance its connected devices and services offerings. The company’s flagship Digital Life product suite comprises a variety of devices and services including motion alerts, energy controls and live video feeds. Customers of Digital Life are provided with sensors and cameras, which enable them to monitor their homes and pets on their phones. The service is currently available in 80 United States markets including New York and Chicago. (Read more: Is AT&T Mulling Over Selling Digital Life Platform?)
5. In April 2017, Federal Communications Commission (FCC) declared the names of the winning bidders for its latest 600 MHz low-band wireless spectrum auction, popularly known as Incentive Auction. T-Mobile US was one of them. The company acquired the largest portion (nearly 45%) of the available spectrums by offering a sum of nearly $8 billion. It won 1,525 licenses and bought around 31 MHz of spectrums in the 600 MHz low-band frequencies. (Read more: T-Mobile US Inc. Begins Rollout of 600-MHz Spectrum)
Price Performance
The following table shows the price movement of major telecom players in both the last week and last six months.
Company | Last Week | Last 6 Months |
VZ | -0.72% | -4.58% |
T | -1.51% | -10.48% |
S | 0.48% | -7.27% |
TMUS | -0.31% | 2.88% |
CHTR | -2.61% | 19.46% |
TEF | -0.74% | 6.11% |
AMX | 6.21% | 47.83% |
CMCSA | -1.55% | 7.28% |
DISH | -1.61% | -8.41% |
In the last five trading sessions, share price movement of major telecom stocks was negative. Despite this, America Movil (6.21%) gained significantly during this time frame. However, the price performances of most of the major telecom stocks were mixed in the last six months. Among the stocks that gained substantially are America Movil (47.83%) and Charter Communications (19.46%) while AT&T (10.48%) lost remunerably 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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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report
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