TECH - 3 Stocks From the Thriving Communication Industry to Bet On | Benzinga
The Zacks Diversified Communication Services industry is likely to benefit from the diminishing supply chain adversities, increased fiber densification and accelerated 5G deployment across the globe. However, high capital expenditures for 5G infrastructure upgrades, unpredictable raw material prices, geopolitical conflicts and elevated inventory levels amid a challenging macroeconomic environment and uncertain market conditions have dented the industry's profitability.
Nevertheless, Swisscom AG (OTC: SCMWY), Telefonica, S.A. (NYSE: TEF) and Telenor ASA (OTC: TELNY) should benefit in the long run from a higher demand for scalable infrastructure for seamless connectivity amid the wide proliferation of IoT and transition to cloud networks and related next-gen technologies.
Industry Description
The Zacks Diversified Communication Services industry comprises firms that provide a wide array of communication services, including wireless, wireline and Internet, to business enterprises and consumers. These companies offer mobile and wireline telephone services, high-speed Internet, direct-to-home satellite television and other value-added services. In addition to providing integrated information and communications technology services to businesses and governments, some of these companies operate as local exchange carriers or full-service providers of data center colocation and related managed services in state-of-the-art data center facilities. Some industry participants also provide IP networks, private lines, network management and hosting services, along with sales, installation and maintenance of major branded IT and telephony equipment.
What's Shaping the Future of the Diversified Communication Services Industry?
Focus on Low Latency, High Bandwidth Applications: The industry participants are investing considerably in LTE, broadband and fiber to provide additional capacity and ramp up the Internet and wireless networks to meet exponential video and data demand. These companies are rapidly transforming themselves from legacy copper-based telecommunications firms to technology powerhouses. At the same time, the industry participants continue to focus on leveraging wireline momentum, expanding media coverage, improving customer service and achieving a competitive cost structure to generate higher average revenue per user while attracting new customers. Also, these firms offer the flexibility to better manage data traffic by leveraging indigenous software-defined networks to enable low-latency, high-bandwidth applications for faster access to data processing.
Diminishing ROI: Video and other bandwidth-intensive applications have witnessed exponential growth owing ...