Four Telecom Stocks To Gain From Evolving Industry Trends

Telecommunications is a vital industry witnessing rapid technological improvement. Unprecedented growth in high-speed mobile Internet traffic, particularly with respect to wireless data and video, has transformed this industry into the most evolving, inventive and keenly contested space.

On the positive side, the new U.S. telecom regulatory body — Federal Communications Commission (“FCC”) — has given enough indications of its leniency compared with the Obama administration. It is also likely to roll back several stringent regulations of the previous regime. The FCC’s stance of being less restrictive will aid mergers and acquisitions, which are likely to spur growth in 2017. Moreover, the expected corporate tax reform will benefit telecom operators to extensively explore the booming businesses services market.

A growing economy speeds up demand for real-time voice, data, and video manifold. The escalation in demand has encouraged telecom service providers to undertake large network extensions while upgrading plans. The rising demand for technologically superior products has been a silver lining for the telecommunication industry in an otherwise tough environment. This in turn has boosted the demand for telecom equipment manufacturers.

In addition, a major characteristic of the telecommunications industry is that it is immune to international geo-political disturbances even when these lead to economic fluctuations. The need to remain connected is so very human, springing from our earliest tendencies to communicate with our fellow human beings. An era of digitization and technology is essentially built on this human craving. It is here that telecommunications come to the fore as a necessary utility. Consequently, any non-U.S. economic volatility is not expected to have an immediate impact on the industry.

Future Drivers of Telecom Industry

(1) 4G LTE Networks Thriving: According to a recent research report published by Ovum for industry association 5G Americas, 4G LTE connections have reached 2.37 billion globally at the end of second-quarter 2017. This indicates an improvement of a whopping 59% year over year. Per the report, LTE connections will reach 4.9 billion in 2022. At this rate, 4G LTE is set to outnumber 3G subscribers worldwide by 2020. By the end of 2021, global LTE market share will cross 53%.