Telecom Stock Roundup: Verizon To Launch 5G Mobile, AT&T Offers Insights & More
Zacks Investment Research | Dec 06, 2018 08:30PM ET
In the past five trading days, telecom stocks flattered to deceive as an initial uptrend was replaced by a gradual decline. This was primarily led by investors’ apprehension about the resumption of a bitter high-tech Cold War with China that was apparently on pause.
As President Trump offered a 90-day truce to his Chinese counterpart on the sidelines of the G20 summit in Argentina, telecom stocks inched up on expectations of fruitful negotiations related to the tariff war. However, the stock euphoria soon sizzled out on news that Meng Wanzhou, the chief financial officer of Huawei, was arrested in Canada and faced probable extradition to the United States over potential violations of sanctions on Iran. Serving as the deputy chairwoman of the management board, Meng is the daughter of the founder of Huawei, the leading telecom manufacturer in China. Consequently, the detention and eventual arrest of such a high-profile business tycoon rattled the markets and put the political environment on high alert.
Time and again, the U.S. administration has asked federal agencies to abstain from using China's ZTE (HK:0763) and Huawei products over perceived risk of espionage. The Pentagon has also banned the sale of smartphones from these manufacturers from all military establishments. The U.S. officials had even reached out to allied countries to persuade them from refraining to use Huawei telecom equipment, accusing it of sophisticated and intensified cyberattacks to siphon off data for possible collection and analysis.
Although the underlying issue is cited to be related to national security concerns, the bone of contention perhaps stems from an innate desire between the two warring nations to claim dominance in cutting-edge technologies and the next generation of wireless services. It remains to be seen how the latest saga unfolds and whether it stalls the roll-out of the peace process to end the prolonged trade war.
Regarding company-specific news, technology collaborations, 5G deployment, earnings and strategic insights took the center stage over the past five trading days.
Recap of the Week’s Most Important Stories
1. In order to gain a first mover advantage in the 5G race, Verizon Communications Inc. (NYSE:VZ) has announced plans to launch commercial 5G smartphones in the market in first-half 2019 in collaboration with electronics firm Samsung (KS:005930).
The Samsung 5G smartphones will leverage the flagship Qualcomm Snapdragon Mobile Platform with the Snapdragon X50 5G NR modem developed by QUALCOMM Incorporated (NASDAQ:QCOM) and antenna modules with integrated RF transceiver, RF front-end and antenna elements. These will help smartphones to immediately benefit from the speed and capacity of Verizon’s 5G Ultra Wideband network. (Read more: Original post
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