In the last five trading days, telecom stocks have been trending upwards, inspired by cautious optimism, as the US and China continue to trade despite the underlying currents of the director. Huawei financial, Meng Wanzhou. China has also taken some decisive steps to alleviate some bottlenecks in bilateral trade relations, while US Trade Representative Robert Lighthizer and Chinese Vice Premier Liu were expected to lead more high-level discussions. late this month.
At the beginning of the year, a comprehensive electronic commerce law came into force in China. In addition, the Chinese Standing Committee of the National People's Congress has begun to consider a draft law on foreign investment. Both laws are aimed at countering IP infringement and the forced transfer of foreign technology to Chinese companies through strict rules and regulations. The Communist nation has also lowered tariffs on American cars from 40% to 15% for three months from the first week of January. In addition, China has increased its imports of soybeans and has commanded more than 5 million tons of US soybean since December, while approving the import of five genetically modified crops.
At the same time, incriminating documents alleging alleged links between Huawei and two obscure companies, with the help of which Meng allegedly cheated international banks by asking them to clear transactions (worth several millions of dollars) with Iran despite economic sanctions, had made it possible to highlight the case of extradition. Although Huawei maintained that equipment vendor Skycom and screen company Canicula Holdings are independent entities, documents reveal that Huawei was controlling both of them. While a senior Huawei executive would have been the Iranian official of Skycom, at least three Chinese-name people had signing rights to Huawei's and Skycom's bank accounts in Iran. In addition, the documents reveal that Huawei conducted operations in Syria via Canicula. It remains to be seen how the trial will fail with these revelations and it will impede the negotiation process.
In terms of company-specific information, acquisitions, 5G service deployment, technology collaborations and strategic operations have come to the fore over the last five trading days.
Summary of the most important stories of the week
1. Motorola Solutions, Inc. (MSI – Free Report) acquired VaaS International Holdings, Inc., a data and image analysis company, for $ 445 million, combining liquidity and equities. The transaction will broaden Motorola's footprint in the command center software portfolio with the largest shareable database of vehicle location information.
The acquired company, with projected revenues of approximately $ 100 million in 2019, will be an integral part of Motorola's Software and Services business. Over the years, Motorola has expanded its installed service base and is building an end-to-end public security command center platform. Management expects a faster growth in this sector and a significant expansion of the operating margin in 2019 and beyond. (Learn more: Motorola buys VaaS software and strengthens its command center software portfolio)
2. It seems that there is no respite for QUALCOMM Incorporated (QCOM – Free Report) legal battles related to its activities. After a long court saga with Apple Inc. over patent infringement issues, Qualcomm is now preparing for the antitrust case of the US Federal Trade Commission regarding monopolistic business practices. The California courtroom trial is likely to have a cascading effect on the smartphone industry around the world and has attracted keen interest from all stakeholders, including Apple.
In an appeal to US District Judge Lucy Koh, the government argued that Qualcomm had resorted to anti-competitive policies to boost sales of its smartphone chips. He alleged that Qualcomm followed the "no license, no chips" commercial policy, according to which the chips were only sold to manufacturers who had agreed to inflate the patent license terms. The government agency further accused Qualcomm of using unfair business practices and allegedly offering financial cuts to the iPhone maker who only bought chips, harming as well as competing offers from its competitor Intel Corporation. (Read more: Qualcomm prepares legal battle against US antitrust regulator)
3. Join the 5G train, Sprint Corporation (S – Free Report) announced its intention to market 5G smartphones on the market in the first half of 2019 in collaboration with the Samsung electronics group. It's apparently the third device unveiled by Sprint for its 5G network.
The latest Samsung 5G smartphone launched by Sprint will offer dual-mode connectivity to its LTE and 5G networks supporting a 2.5 GHz spectrum. For roaming facilities, the handset will support the spectrum of 1.9 GHz (Band 25), 800 MHz (Band 26) and other Sprint LTE spectrum bands. (Read more: Sprint joins the movement of 5G smartphones with Samsung Mobile)
4. Backed by an "out of the box" thought, AT & T Inc. (T – Free Report), a telecommunications company, has over the years become a major player in the US communications sector, with significant strengths in the media. The company is now focused on harnessing the inherent potential of its Xandr advertising unit and WarnerMedia's Turner business to Turner to provide customers with engaging advertising content and data analytics in 2019.
The two commercial entities have now collaborated to enhance the relevance of advertising by pooling a unique set of assets: valuable consumer data and information, advanced advertising capabilities, and passionate fan bases. (Read more: AT & T will offer enriching ads with Xandr-Turner collaboration)
5 ARRIS International plc (ARRS – Free Report) recently unveiled its SURFboard mAX Pro Mesh Wi-Fi system, which allows users to better use Gigabit Wi-Fi on all connected devices in their homes. The system includes Gigabit service as well as extended coverage by combining network technologies such as Tri-band, Wi-Fi 6, 4×4 and Mesh to provide seamless connectivity.
With this state-of-the-art product, ARRIS aims to meet the growing demand for Gigabit and multi-Gigabit connectivity, as consumers are now looking for high-speed Internet access in every room of the home. The rapid availability of Wi-Fi 6 and mesh systems also provides ARRIS with a competitive advantage in its ongoing efforts to reach a high-end market segment. (More: ARRIS offers the Wi-Fi 6 mesh system for better home connectivity)
The table below shows the price movements of some of the major telecommunication stocks over the past week and the past six months.
During the last five trading days, Juniper Networks, Inc. (JNPR – Free Report) was the main gain with a stock price up 4.5%, while Qualcomm was the only one to fall, its stock having lost 1.4%.
Over the past six months, Sprint posted the best performance, with shares rising 12.1%, while Harris Corporation (HRS – Free Report) recorded the largest decline, with shares falling 8.6%.
Over the past six months, the Zacks telecommunications services sector grew 0.6%, while the S & P 500 sector fell 6.9%.
What is the next step in the telecom space?
In addition to the continued product rollout and deployment of 5G technologies, all will remain blinded by the way the US and China continue their negotiations for a long-term solution to the trade war.
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