Telecom Stock Roundup: AT&T Revamps Content Lineup, Motorola Buys Avtec & More
Zacks Investment Research | Mar 13, 2019 09:19PM ET
In the past five trading days, telecom stocks witnessed an uptrend as the United States and China reportedly inched closer to a landmark trade deal by deliberating on the major sticking points. Although U.S. Trade Representative Robert Lighthizer hinted that the negotiations could be in the final weeks, President Trump asserted that he was in no hurry to ink the deal and it would materialize only after the stumbling blocks are cleared.
Both the warring countries seem eager to walk the extra mile to reach a consensus decision that honors the domestic obligations as well as the international commitments. The bilateral trade negotiations presently seek to resolve some lingering issues on China’s subsidies, cyber theft, public sector enterprises, IP rights and so-called forcible technology transfers. A final date for the formal meeting between the two state heads to ink the agreement is yet to be decided as China aims to avoid the ignominy of a failed deal like that of North Korean leader Kim Jong Un. Trump also put pressure on the Communist nation by issuing a veiled threat that there would either be a “good deal” or “no deal at all”.
As the industry awaits further clarity on policy issues and its aftereffect with no official statement release, there remained an element of uncertainty in the domestic market. Meanwhile, the bill introduced last week by the Democratic lawmakers in both the House and Senate to reinstate the net neutrality rules that the Federal Communications Commission had repealed in 2017, was in cynosure. Titled ‘Save the Internet Act’, the bill aims to discourage blocking or throttling content and consider Internet access as a “utility” under Title II of the Communications Act. The bill is likely to receive a subcommittee markup in the House, paving its way for a vote. Although the bill is expected to pass the House, stiff resistance is expected in the Senate where Republicans hold the majority. Moreover, the bill is likely to be vetoed by Trump as he had been vocally skeptical of net neutrality in the past, further blurring the prospects of a smoother sail.
Regarding company-specific news, strategic restructuring, acquisition, divestment and collaborations primarily took the center stage over the past five trading days.
Recap of the Week’s Most Important Stories
1. Amid high subscriber churn for video-enabled services, AT&T Inc. (NYSE:T) has revamped its video content lineup at competitive prices. The strategic move is likely to increase its subscriber base and augment overall revenues as lower video packages are offset by higher digital ad revenues.
AT&T is currently offering DirecTV Now Plus package with HBO and about 40 channels for as little as $50 a month, while DirecTV Now Max package will offer more than 50 channels (including HBO) for $70 per month. In addition to live TV channels, including local options, the DirecTV Now Max package will offer an extensive on-demand library of movies and TV shows. (Read more: Zacks Investment Research
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