Telecom Stock Roundup: Verizon Reaches 5G Target, Vodafone-Nokia Deal & More
Zacks Investment Research | Jan 03, 2020 07:59AM ET
In the past five trading days, telecom stocks continued to mirror the broader equity market performance and witnessed an uptrend as the stage seems set for signing of the “Phase One” deal between the United States and China on Jan 15. The year-end rally was further buoyed by the proposed tariff cuts by the communist nation to boost its economy. With U.S. firms likely to gain greater market access in China per the partial trade accord, 2020 appears to be quite promising for the beleaguered industry.
Although President Trump tweeted the official date for the formal signing of the “Phase One” deal, China has maintained silence on the same. Keeping the cards close to the chest, Beijing is yet to publicly commit to key planks and unveil the specifics of the partial agreement, stating only that details will be released after the signing. Nonetheless, both the countries remain intent to seal the trade truce as early as possible on domestic compulsions and to fuel economic growth.
Meanwhile, China has increased its import basket of U.S. agricultural products like soybeans, following a pledge to purchase $200 billion of goods over the next two years, including $40-$50 billion of agricultural products each year. In addition, China has lowered tariffs on more than 850 goods, ranging from frozen pork to semiconductors from Jan 1, in order to improve its flagging economy.
Notably, the Trump administration had earlier called off a 15% tariff on nearly $160 billion worth of imports from China, including toys, smartphones, laptops and other electronics items. The U.S. government will also halve its 15% levy on $120 billion worth of Chinese import basket, leaving the tariff regime limited to 25% taxes on $250 billion and 7.5% on $120 billion, per the “Phase One” deal.
Regarding company-specific news, 5G deployment, strategic deal, divesture and network upgrade took the center stage over the past five trading days.
Recap of the Week’s Most Important Stories
1. Verizon Communications Inc. (NYSE:VZ) recently announced that its 5G Ultra Wideband mobility service is available in select locations in Cleveland and Columbus, OH, and Hampton Roads, VA. Increasing the tally, the telecom bellwether has turned on its much-acclaimed service in 31 cities, 15 NFL stadiums and four indoor arenas.
Through this, Verizon has reached its goal of deploying 5G service in more than 30 cities by the end of 2019. Its service, which includes high speed, low latency and expanded coverage, is available with seven 5G-enabled devices. With industry-leading wireless products and services, the company is well positioned to benefit from accelerated 5G launch in the United States. (Read more: Zacks Investment Research
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