Telecom Stock Roundup: Verizon Buys Yahoo's Core Assets, Sprint Launches New Unlimited Data Plan
Zacks Investment Research | Jun 14, 2017 09:22PM ET
Although most of the major telecom stocks lost value over the last week, the sector witnessed a number of important events. Notable among the many developments is U.S. telecom behemoth Verizon Communications Inc. (NYSE:VZ) completion of its long-awaited deal to acquire the core businesses of the Internet-company, Yahoo! Inc (NASDAQ:YHOO)., for $4.48 billion. The deal will create a major player in the mobile media and advertising space.
In Apr 2017, Verizon Communications unveiled plans to unite AOL Inc. with Yahoo’s core internet assets under one umbrella – Oath. The portfolio will include HuffPost, Yahoo Sports, AOL.com, MAKERS, Tumblr, BUILD Studios, Yahoo Finance, Yahoo Mail and more, with an aim to build consumer-friendly brands. However,Oath will reportedly sack nearly 2,100 employees, as Verizon will trim expenses and eliminate overlapping back office positions.
Further, Verizon is likely to start an online TV streaming service later this year. The company has decided to come up with dozens of channels nationwide for the new service. Management is currently negotiating with several TV network owners to secure online streaming rights. Recently, the company stated that the new service will include some innovative features to differentiate its offering from the existing products in the market.
Meanwhile, the fourth largest U.S. national wireless carrier, Sprint Corp. (NYSE:S) , launched a marketing promotion yesterday, offering a year of “unlimited” talk, text and data to users who will switch from Verizon, AT&T Inc. (NYSE:T) or T-Mobile US Inc. (NYSE:T) . In doing so, the company further intensified the mobile service pricing war going on among the four nationwide service providers in the U.S. wireless market.
Several important developments have also taken place in the telecom space outside the U.S. The telecom regulatory body of the European Union, the European Commission (EC), has launched a thorough investigation into the proposed acquisition of Netherlands-based NXP Semiconductors NV (NASDAQ:NXPI) by U.S. mobile chipset giant, Qualcomm Inc. (NASDAQ:QCOM) . The EC has a 90-working-days’ time limit, until Oct 17, 2017, to take a decision.
Canadian telecom operator Shaw Communications Inc. (NYSE:S) recently received a shot in the arm as credit rating agency Moody's Investors Service raised its rating outlook to positive from stable. The rating agency reaffirmed the company’s Baa3 senior unsecured ratings. Moody’s stated that the primary reason for the upgrade is the recent business restructurings of Shaw Communications. The company currently carries a Zacks Rank #2 (Buy). You can see Zacks Investment Research
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