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Telecom Stock Roundup: Verizon Drops Bloomberg TV, Inks Deal With A+E Networks

Zacks

The U.S. telecom did not witness much development last week. Nevertheless, a few are worth taking note of.

U.S. telecom behemoth Verizon Communications Inc. VZ hit headlines. The company’s pay-TV customers have lost access to Bloomberg TV. Per sources, Verizon has declined Bloomberg’s proposal to pay for content, which is easily accessible online for free. Verizon has advised customers to subscribe to Bloomberg's website and app to access Bloomberg TV.

On the other hand, Verizon and A+E Networks have signed an extended carriage deal, which will broadcast A+E Networks programming on the company’s digital and mobile media platforms. Moreover, the company will be streaming national Football League (NFL) playoff games on Yahoo Sports, under Oath brand, effective this weekend.

In a separate development, Verizon has enriched its portfolio of managed security detection and response services for enterprise customers with the acquisition of privately held Niddel Corp., a specialized provider of machine-learning-based automated threat hunting. However, the financial terms of the deal have not been disclosed.

Also, T-Mobile US Inc. TMUS revealed its preliminary subscriber statistics for 2017. The company added a net 5.7 million customers in 2017, which includes 3.6 million net customer additions in the lucrative postpaid segment. Of this, 2.8 million were postpaid phone additions and 0.8 million were from connected devices like tablets.

T-Mobile US is making its unlimited postpaid wireless service, T-Mobile ONE, more attractive with the inclusion of services from online video streaming service provider, Netflix Inc. NFLX with no extra charges along with unlimited data for just $40 per line for a family of four (inclusive of all taxes and fees). The offer is open to both existing and new customers. Subscribers, who already have a Netflix account, can also avail this offer.

In a separate development, AT&T Inc. T is planning to offer standards-based mobile 5G services to consumers in various U.S. markets by late 2018. The telecom service provider claims to be the first company in the United States to come up with 5G services in 2018, beating other players – Verizon, Sprint Corp. S and T-Mobile US – in the race for 5G.

DISH Network Corp. DISH has entered into a partnership with comScore to measure the effectiveness of addressable advertising campaigns across its legacy pay-TV service using Hopper set-top box and its next-generation Sling TV service, which provides online TV streaming (OTT) on various handheld gadgets. DISH Network currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Read the last Telecom Stock Roundup for Jan 04, 2018.

Recap of the Week’s Most Important Stories

1. Verizon’s deal covers A+E cable networks which include A&E, History, Lifetime, Viceland and FYI. Verizon’s FiOS customers can access the network’s programming, comprising shows like Knightfall, Vikings and Live PD on their mobile devices. Verizon will also continue to stream games like National Women’s Soccer League on Yahoo Sports and Go90 platforms. (Read more: Verizon Inks Extended Carriage Deal With A+E Networks)

2. Takeover of start-ups like Niddel will help Verizon to establish its IoT foothold. Niddel’s primary product, Niddel Magnet, is a subscription service that uses machine learning to locate infected or compromised machines inside an organization. It works completely autonomously and doesn’t require customers to generate their own code, rules, searches or even any kind of content. (Read more: Will Verizon's Acquisition of Niddel be a Major Boon?)

3. AT&T’s 5G decision followed the completion of the first implementable 5G New radio (NR) specification of 3rd Generation Partnership Project (3GPP). This basically supports a ‘non-standalone’ 5G standard that uses LTE to control 5G data connections. Since AT&T supports non-standalone and standalone options for the 5G standard, the new timeline will accelerate availability of hardware. (Read more: AT&T to Launch Standard-Based Mobile 5G Services in 2018)

4. T-Mobile exited 2017 with a total of 72.6 million customers. It was also the fourth consecutive year when the company added more than 5 million subscribers. In the fourth quarter of 2017, the company added a net 1.9 million postpaid customers, making it the 19th straight quarter of more than 1 million net subscriber additions. Customer churn, in fourth-quarter 2017 was 1.18%, indicating an improvement of 10 basis points year over year and 5 basis points sequentially. (Read more: Will T-Mobile US Continue its Bull Run in 2018?)

5. comScore is creating a cross-platform addressable measurement system for DISH Network. comScore's linear TV addressable advertising measurement are being used by leading ad agencies and brands for more than five years now. The new technology will operate in the same way, while extending measurement of addressable campaign delivery across multiple platforms. According to comScore, addressable advertising on TV is expected to grow 66% in 2018 to $1.3 billion. (Read more: DISH Network to Boost Integrated Advertising Business)


Price Performance

Company Last WeekLast 6 Months
VZ=2.32%19.65%
T-5.84%-0.57%
TMUS0.60%5.08%
S-4.41%-31.71%
TEF1.55%-4.47%
AMX-0.99%2.78%
CMCSA2.60%6.01%
CHTR4.43%4.23%
DISH1.38%-24.71%

The following table shows the price movement of the major telecom stocks in both the last week and the last six months.

In the last five trading sessions, share price movement of most of the major telecom stocks witnessed a mixed trend. AT&T and Sprint lost significantly while Charter Communications gained substantially in the same time frame. Similarly, price performances of most of the major telecom stocks were mixed in the last six months. Sprint and DISH Network suffered major reverses in the stock price, while Verizon gained attractively 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. However, three very important economic data, namely, producer price index, consumer price index and retail sales data will be released in the coming week. Investors will closely watch those data to get a clear picture of the U.S. economy. These data may affect the stock price of the telecom industry.

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