Companies such as AT&T Inc. (NYSE:T), Sprint Corporation (NYSE:S) and Verizon Communications Inc. (NYSE:VZ) have been going through tough times on the market recently, especially Sprint Corporation (NYSE:S). Germany cancelling the networking contract didn’t help Verizon Communications Inc. (NYSE:VZ) either.
Kevin Smithen, Telecom analyst at Macquarie Securities was on CNBC and he spoke about the positives for telecom stocks such as AT&T Inc. (NYSE:T), Verizon Communications Inc. (NYSE:VZ) and Sprint Corporation (NYSE:S). Smithen was bullish on Telecom stating: “We think that telecom could perform a little bit better in the second half of the year.”
He also spoke about the aggressive pricing strategy of T-Mobile US Inc (NYSE:TMUS) and about the price responses from the telecom companies like AT&T Inc. (NYSE:T), Verizon Communications Inc. (NYSE:VZ) and Sprint Corporation (NYSE:S) which kicked down the revenue in the first half.
Smithen expects a rebound in the subscribers for AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ) and a more benign pricing promotions and environment for the rest of the year. So, according to him, AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ) would perform relatively well, owing to the low interest rate environment.
In a longer run, Smithen expects the expensive spectrum costs might impact the revenues and thereby the stock prices.
“Longer term, we have concerns over the industry going from essentially what has been a duopoly for many years to 4 competitors”
The key investors in Verizon Communications Inc. (NYSE:VZ) are Lansdowne Partners with over 13 million shares and Luxor Capital Group with about 4.3 million shares as of 31st March 2014.
Arrowstreet Capital is a key investor in AT&T Inc. (NYSE:T) with approximately 5 million shares and Aqr Capital Management with around 4.1 million shares.
Disclosure: None
