Last week was a mixed one for the telecom sector. Diversified communications service provider Windstream Holdings Inc. (WIN) has launched its innovative “Kinetic” pay-TV service. On the other hand, Verizon Communications Inc. (VZ) finally shut down its Internet TV venture called “Redbox Instant” in view of growing competitive threat from low-cost online video streaming service providers.
Meanwhile, the Federal Communications Commission received a large number of applications for its upcoming AWS-3 spectrum auction. The frequencies were earlier allocated to federal agencies such as the Department of Homeland Security. The auction is scheduled to take place on Nov. 13 for which the regulator expects to collect at least $10 billion from this round of airwaves auction.
Recap of the Week's Most Important Stories
1. Recently, Windstream one of the largest U.S. rural local exchange carriers (RLEC) – launched an advanced television service, Kinetic. While the service will be initially available to more than 50,000 households in the Lincoln region by the first half of 2015, it will reach the other selected cities in the later half. In the second quarter, Windstream witnessed a 5% drop in digital TV customers. Hence, we believe that the rollout of such value-added services will certainly boost subscriber growth while moving ahead. (Read More: Windstream's Kinetic TV Service Slated for 1H15 Launch.)
2. The Federal Communications Commission (FCC) recently revealed that its upcoming spectrum auction has received as many as 80 applications. The Advanced Wireless Services-3 (AWS-3) spectrum auction will be on Nov 13, 2014. Altogether, 1,614 AWS-3 licenses will be up for auction in the 1695-1710 MHz, 1755-1780 MHz and 2155-2180 MHz bands. These spectrum bands are highly useful for the deployment of 4G LTE services. The major bidders for this upcoming spectrum auction are Verizon Communications, AT&T Inc. (T), T-Mobile US Inc. (TMUS) and DISH Network Corp. (DISH). (Read More: U.S. AWS-3 Spectrum Auction Registers Massive Applications.)
3. Verizon Communications and Outerwall Inc. have decided to officially shut down its video streaming business venture – Redbox Instant – effective Oct. 7. While Outerwall's Redbox Instant offered movies on rent, Verizon's widespread U.S. presence helped popularize the service. Despite the successful venture, the Redbox Instant service was hurt by cut-throat competition from low-cost video streaming companies like Google Inc.'s Youtube and Hulu. Netflix Inc.'s extensive movie and TV show collection coupled with ultra HD video offerings also posed significant challenges. (Read More: Verizon and Outerwall Shutters Redbox Instant.)
4. Satellite TV operator DISH Network recently renewed its existing business agreement with domestic wireline carrier Frontier Communications Corp. (FTR). However, the financial terms of this multi-year renewed contract have been kept under wraps. Per the contract, Frontier Communications' subscribers will view DISH's services along with the company's bundled Internet and voice package.In Jun 2014, DISH achieved a significant milestone by commercially launching the first wireless set-top box in the pay-TV industry. (Read More:DISH, Frontier Communications Extend Business Deal.)
5. Arris Group Inc. (ARRS) is set to help deliver the finest quality in voice, video and data services with its latest broadband gateways – NVG340 and NVG370. Recently, Cincinnati Bell announced its new Fioptics TVEverywhere app, powered by ARRIS' Whole Home Solution Mobile and SecureMedia technologies. ARRIS' innovative technologies ensure a versatile TV viewing experience for Fioptics TV Everywhere app users. (Read More: ARRIS Adds Broadband Gateways, Powers Fioptics TV App.)
Price Performance
The following table shows the price movement of major telecom players over the past week and during the last 6 months.
|
Company |
Last Week |
Last 6 Months |
|
VZ |
+2.03% |
+6.24% |
|
T |
+1.88% |
+3.29% |
|
S |
-2.88% |
-31.02% |
|
TMUS |
+2.95% |
-8.74% |
|
VOD |
+1.59% |
-6.99% |
|
CHL |
+4.19% |
+31.65% |
|
AMX |
+1.47% |
+22.13% |
|
CMCSA |
+3.48% |
+10.92% |
|
DISH |
+0.98% |
+5.57% |
Over the trailing five trading sessions, the price movement for most of the major telecom stocks was positive. However, the notable exception was Sprint. China Mobile and Comcast emerged as top gainers over the last 5 trading sessions.
Over the last 6 months, most of the telecom stocks have also gained. China Mobile and America Movil witnessed considerable rally in stock prices of 31.65% and 22.13%, respectively. However, Sprint collapsed a massive 31.02% and T-Mobile US lost 8.74% of value over the same time frame.
What's Next in the Telecom Sector?
We do not foresee any significant changes in the telecom industry or overall global economic factors that can affect the industry in the coming week. Therefore, we expect stocks to trade in line with the broader market movement.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
AT&T INC (T): Free Stock Analysis Report
ARRIS GROUP INC (ARRS): Free Stock Analysis Report
DISH NETWORK CP (DISH): Free Stock Analysis Report
WINDSTREAM HLDG (WIN): Free Stock Analysis Report
FRONTIER COMMUN (FTR): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
T-MOBILE US INC (TMUS): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
