Telecom Stock Roundup: Nokia Faces EU Probe, BlackBerry's Q4 Earnings & More
Zacks Investment Research | Apr 03, 2019 09:05PM ET
In the past five trading days, telecom stocks witnessed an overall downtrend as uncertainty regarding U.S.-China trade negotiations persisted. An apparently sluggish pace of discussions and the resultant listless pace of reforms in China are seemingly eroding the patience of the U.S. firms as they gear up for 5G transformation across the country. As the industry awaits an early resolution to the prolonged bilateral talks to better focus on the impending 5G boom, efforts are on to give a final push to a mutually acceptable trade deal that is easily enforceable.
Both the United States and China seem eager to walk the extra mile to reach a consensus decision that honors domestic obligations and international commitments. The U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer have resumed discussions with a Chinese delegation led by Vice Premier Liu He in Washington this week. Although the White House has qualified the talks as encouraging and ‘making good headway’ for a probable settlement within this month, the enforceability of the purported deal remains the latest stumbling block. China has reportedly agreed to periodic meetings at the levels of office director, vice minister and minister to keep a tab on its deal commitments. However, the Communist nation is resisting univocal U.S. powers to re-impose tariffs unilaterally if it revokes the trade agreement and Beijing’s inability to retaliate on such occasions with its own punitive measures.
Per the latest report by the Cellular Telecommunications Industry Association, which represents the U.S. wireless communications industry, both the United States and China are currently on equal footing for 5G readiness. This represents a marked improvement from the last year when the United States was trailing way behind China and South Korea. This was made possible through continued investments from the industry and a prod from the top policymakers to update networks faster. With a holistic top-down approach, the United States was able to expedite the process to set up the required infrastructure and back it up with testing and launching of early networks in key locations. As the battle for 5G supremacy intensifies, it remains imperative for the United States to clinch a favorable deal that would help it achieve the coveted technological dominance.
Regarding company-specific news, antitrust regulatory cases, earnings, strategic restructuring and collaborations primarily took the center stage over the past five trading days.
Recap of the Week’s Most Important Stories
1. As Nokia (HE:NOKIA) Corporation (NYSE:NOK) gears up for the upcoming technology cycle with an end-to-end portfolio, it is facing certain roadblocks from some unlikely corners. The latest impediment appears to come from German automobile manufacturer Daimler AG (DE:DAIGn), which registered a complaint with EU antitrust regulators to initiate a probe against Nokia’s patents.
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The bone of contention is Nokia’s patents relating to the automotive industry, which Daimler alleges are essential for the development of new products and services for connected driving. (Read more: Zacks Investment Research
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