Telecom Stock Roundup: AT&T Misses, Corning Trumps Q3 Earnings Estimates & More
Zacks Investment Research | Oct 30, 2020 05:36AM ET
In the past week, the U.S. telecom stocks continued to mirror the broader benchmark indices and trended down with surging coronavirus cases clouding broad-based expectations of a speedy turnaround in the economy. The growth momentum further faded as the string of supplemental unemployment benefits and other stimulus previously approved by the Congress expired. To add to the woes, hopes of consensus on additional stimulus eroded, at least until the Presidential elections.
In order to thwart the hegemony of China’s hardware-based 5G model, leading U.S. telecom firms and other technology hotshots are pushing for a software-based approach to build an all-pervasive 5G network. This is likely to encourage the development of open radio access networks, or RAN, which power cellular technology. RAN is an essential element of a mobile telecommunication system that connects user devices such as computers, smartphones and tablets to the core part of a network. The O-RAN (open RAN) alliance is now urging the Trump administration to break away from proprietary telecom networks and embrace virtual telecom model to counter the increasing dominance of China-based firms like Huawei.
Following the footsteps of other European countries, Italy has debarred Huawei from supplying telecommunications equipment for its 5G core network citing security concerns. Moreover, Bulgaria has joined the U.S.-led international coalition against Huawei. Notably, the White House is seeking a ban on TikTok, WeChat and other Chinese apps that are allegedly being used as cyber espionage tools to gain access to sensitive American data. However, an appeals court recently rejected a government appeal seeking immediate ban of WeChat download from U.S. app stores. This has offered a temporary respite to WeChat that boasts an average of 19 million daily active users in the United States.
Meanwhile, the Federal Communications Commission (“FCC”) is set to vote on Nov 18 to offer a block of the 5.9 GHz spectrum band for wireless use. The spectrum earmarked for auto safety has mostly been unused and is now being considered to be made available to accommodate the increasing number of wireless devices. The FCC plans to transition the upper 30 MHz from the spectrum band for a different automotive communications technology called Cellular Vehicle-to-Everything, or C-V2X, and use the other 45 MHz for wireless use. While almost automakers have rejected the proposal, major telecom firms have backed it.
Regarding company-specific news, earnings primarily took the center stage over the past five trading days.h3 Recap of the Week’s Most Important Stories/h3
1. AT&T Inc (NYSE:T). Zacks Investment Research
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