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Telecom Stock Roundup: AT&T to Divest Xandr, Motorola's Acquisition & More
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U.S. telecom stocks witnessed a healthy uptrend and appeared in cruise control mode as solid economic data eased concerns regarding high consumer inflation and the fast-spreading Omicron variant. The latest data revealed that confidence among U.S. consumers increased to 115.8 in December from 111.9 in November with improving business environment and labor market conditions. Higher existing-home sales in November owing to low mortgage interest rates and a robust job market further buoyed the bullish economic sentiment.
The renewed sector optimism also found resonance in broad-based expectations of steady economic growth in 2022, with inflationary pressures being largely controlled by the Fed. The Fed has decided to double the pace of bond tapering to $30 billion per month, bringing an end to the recurring asset purchases by March 2022. This would then follow three possible rate hikes next year to ease the inflation to relatively acceptable levels.
Notable company-specific news that grabbed the spotlight over the past week includes AT&T Inc.’s (T - Free Report) deal with Microsoft to sell Xandr and Motorola Solutions, Inc.’s (MSI - Free Report) buyout of 911 Datamaster, Inc. to boost mission-critical system. Also, Verizon Communications Inc. (VZ - Free Report) has collaborated with Google cloud for mobile edge computing, Knowles Corporation (KN - Free Report) is set to improve its earphones and Nokia Corporation (NOK - Free Report) will power 5G network in Finland.
Meanwhile, the Biden administration is continuing to impose curbs against China-based firms to protect the Americans from alleged data intrusion. The latest in the fray to face strict restrictions for U.S. raw materials and technology export are leading drone maker DJI and cable firms like Jiangsu Hengtong Marine Cable Systems, HMN International, Jiangsu Hengtong OpticElectric, Shanghai Aoshi Control Technology Co, Ltd, and Zhongtian Technology Submarine Cable. As the communist country opposed the unilateral actions and threatened to take retaliatory steps, the lingering trade spat refuse to settle down any time soon.
Recap of the Week’s Most Important Stories
1. AT&T has decided to sell its advertising and analytics division, Xandr, to Microsoft for an undisclosed amount. The deal builds on a long-standing relationship between Xandr and Microsoft for providing digital media solutions for advertisers. As the digital landscape continues to evolve, the companies intend to shape the advertising marketplace of the future.
AT&T and Xandr have a shared vision of empowering a free and open web while leading an industry alternative through a global advertising marketplace. With Xandr’s technology, Microsoft can accelerate the delivery of its digital advertising and retail media solutions.
2. Motorola recently augmented its command center solutions portfolio with the acquisition of 911 Datamaster, Inc. for an undisclosed amount. The buyout is likely to reinforce its position as a leading provider of mission-critical communication products and services worldwide.
The acquisition will facilitate Motorola to boost its organizational workflows as it aims to migrate to NG9-1-1 technologies. This, in turn, will help to improve its technical capabilities to provide interactive text messaging and policy-based routing using location for better emergency support services.
3. Verizon has collaborated with Google Cloud to bring the power of the cloud closer to connected devices at the edge of Verizon’s network. The combination of Verizon’s private On Site 5G and private 5G Edge with Google Distributed Cloud Edge will enable enterprises to unlock the power of 5G and mobile edge computing with greater operational efficiency.
Verizon and Google Cloud also plan to develop public 5G mobile edge computing for developers and enterprises. The public 5G Edge solution will enable developers to build applications at the edge of Verizon’s wireless network in various locations across the United States.
4. Knowles has joined forces with Ole Wolff to provide a compact hybrid driver for its True Wireless Stereo (TWS) earphones. It will incorporate its high-performance, balanced armature RAN model tweeter with Ole Wolff’s 8mm dynamic woofer. The amalgamation of these two avant-garde systems will enhance TWS earphones with premium sound and active noise cancellation.
Both entities are working proactively to develop a compact market-leading hybrid audio solution for TWS earphones. Knowles’ TWS earbuds are furnished with voice vibration sensors and multi-microphone arrays that boost TWS features and minimize high costs related to ground-up development.
5. Nokia recently inked a deal with Elisa Estonia to deploy the carrier’s 5G services in Finland and enable a seamless transition from its existing 4G infrastructure to the superfast 5G technology. The five-year deal for an undisclosed amount will enable Nokia to operate as the sole 5G vendor for Elisa Estonia and work collaboratively with it to deploy premium digital services in the near future.
Per the deal, Nokia will provide 5G RAN (radio access network) solutions from its leading AirScale portfolio for extensive dense urban area coverage. The deal will leverage Nokia’s RAN solutions to offer a seamless migration from 4G to 5G as Elisa Finland intends to decommission its 3G network by 2023 while aiming for a 5G rollout in 2022 following the completion of its spectrum auction early next year.
Price Performance
The following table shows the price movement of some of the major telecom stocks over the past week and six months.
Image Source: Zacks Investment Research
In the past five trading days, AT&T gained the most, with its stock rising 10.5%. Qualcomm has declined the most, with its stock falling 4.4%.
Over the past six months, Arista has been the best performer, with its stock appreciating 34.7% while Bandwidth has declined the most, with its stock falling 82.6%.
Over the past six months, the Zacks Telecommunications Services industry has declined 10.7%, while the S&P 500 has rallied 9%.
Image Source: Zacks Investment Research
What’s Next in the Telecom Space?
In addition to 5G deployments and product launches, all eyes will remain glued to how the administration implements key policy changes to safeguard the industry’s interests and address the bottlenecks to spur growth.
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Telecom Stock Roundup: AT&T to Divest Xandr, Motorola's Acquisition & More
U.S. telecom stocks witnessed a healthy uptrend and appeared in cruise control mode as solid economic data eased concerns regarding high consumer inflation and the fast-spreading Omicron variant. The latest data revealed that confidence among U.S. consumers increased to 115.8 in December from 111.9 in November with improving business environment and labor market conditions. Higher existing-home sales in November owing to low mortgage interest rates and a robust job market further buoyed the bullish economic sentiment.
The renewed sector optimism also found resonance in broad-based expectations of steady economic growth in 2022, with inflationary pressures being largely controlled by the Fed. The Fed has decided to double the pace of bond tapering to $30 billion per month, bringing an end to the recurring asset purchases by March 2022. This would then follow three possible rate hikes next year to ease the inflation to relatively acceptable levels.
Notable company-specific news that grabbed the spotlight over the past week includes AT&T Inc.’s (T - Free Report) deal with Microsoft to sell Xandr and Motorola Solutions, Inc.’s (MSI - Free Report) buyout of 911 Datamaster, Inc. to boost mission-critical system. Also, Verizon Communications Inc. (VZ - Free Report) has collaborated with Google cloud for mobile edge computing, Knowles Corporation (KN - Free Report) is set to improve its earphones and Nokia Corporation (NOK - Free Report) will power 5G network in Finland.
Meanwhile, the Biden administration is continuing to impose curbs against China-based firms to protect the Americans from alleged data intrusion. The latest in the fray to face strict restrictions for U.S. raw materials and technology export are leading drone maker DJI and cable firms like Jiangsu Hengtong Marine Cable Systems, HMN International, Jiangsu Hengtong OpticElectric, Shanghai Aoshi Control Technology Co, Ltd, and Zhongtian Technology Submarine Cable. As the communist country opposed the unilateral actions and threatened to take retaliatory steps, the lingering trade spat refuse to settle down any time soon.
Recap of the Week’s Most Important Stories
1. AT&T has decided to sell its advertising and analytics division, Xandr, to Microsoft for an undisclosed amount. The deal builds on a long-standing relationship between Xandr and Microsoft for providing digital media solutions for advertisers. As the digital landscape continues to evolve, the companies intend to shape the advertising marketplace of the future.
AT&T and Xandr have a shared vision of empowering a free and open web while leading an industry alternative through a global advertising marketplace. With Xandr’s technology, Microsoft can accelerate the delivery of its digital advertising and retail media solutions.
2. Motorola recently augmented its command center solutions portfolio with the acquisition of 911 Datamaster, Inc. for an undisclosed amount. The buyout is likely to reinforce its position as a leading provider of mission-critical communication products and services worldwide.
The acquisition will facilitate Motorola to boost its organizational workflows as it aims to migrate to NG9-1-1 technologies. This, in turn, will help to improve its technical capabilities to provide interactive text messaging and policy-based routing using location for better emergency support services.
3. Verizon has collaborated with Google Cloud to bring the power of the cloud closer to connected devices at the edge of Verizon’s network. The combination of Verizon’s private On Site 5G and private 5G Edge with Google Distributed Cloud Edge will enable enterprises to unlock the power of 5G and mobile edge computing with greater operational efficiency.
Verizon and Google Cloud also plan to develop public 5G mobile edge computing for developers and enterprises. The public 5G Edge solution will enable developers to build applications at the edge of Verizon’s wireless network in various locations across the United States.
4. Knowles has joined forces with Ole Wolff to provide a compact hybrid driver for its True Wireless Stereo (TWS) earphones. It will incorporate its high-performance, balanced armature RAN model tweeter with Ole Wolff’s 8mm dynamic woofer. The amalgamation of these two avant-garde systems will enhance TWS earphones with premium sound and active noise cancellation.
Both entities are working proactively to develop a compact market-leading hybrid audio solution for TWS earphones. Knowles’ TWS earbuds are furnished with voice vibration sensors and multi-microphone arrays that boost TWS features and minimize high costs related to ground-up development.
5. Nokia recently inked a deal with Elisa Estonia to deploy the carrier’s 5G services in Finland and enable a seamless transition from its existing 4G infrastructure to the superfast 5G technology. The five-year deal for an undisclosed amount will enable Nokia to operate as the sole 5G vendor for Elisa Estonia and work collaboratively with it to deploy premium digital services in the near future.
Per the deal, Nokia will provide 5G RAN (radio access network) solutions from its leading AirScale portfolio for extensive dense urban area coverage. The deal will leverage Nokia’s RAN solutions to offer a seamless migration from 4G to 5G as Elisa Finland intends to decommission its 3G network by 2023 while aiming for a 5G rollout in 2022 following the completion of its spectrum auction early next year.
Price Performance
The following table shows the price movement of some of the major telecom stocks over the past week and six months.
In the past five trading days, AT&T gained the most, with its stock rising 10.5%. Qualcomm has declined the most, with its stock falling 4.4%.
Over the past six months, Arista has been the best performer, with its stock appreciating 34.7% while Bandwidth has declined the most, with its stock falling 82.6%.
Over the past six months, the Zacks Telecommunications Services industry has declined 10.7%, while the S&P 500 has rallied 9%.
What’s Next in the Telecom Space?
In addition to 5G deployments and product launches, all eyes will remain glued to how the administration implements key policy changes to safeguard the industry’s interests and address the bottlenecks to spur growth.