Will 2021 Be Better Than 2020 For Telecom Stocks?

Source:Andrey_Popov, Shutterstock

US telecommunication stocks saw a mixed performance in 2020. While some companies have seen robust growth, others struggled to keep up. For instance, the stocks of AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE, Nasdaq: VZ) fell 24.4% and 4.3%, respectively, in 2020.

On the other hand, T-Mobile US Inc. (NASDAQ: TMUS), which merged with one of the major wireless providers in the US – Sprint, saw its share price soar 72% during the year. T-Mobile stock closed at US$134.85 on Dec. 31. Likewise, shares of internet service provider Comcast Corporation (NASDAQ: CMCSA) also rallied 16.5% during the year to close at US$52.40 on Nasdaq on Dec. 31.

T-Mobile’s customer count reaches 102.1M

T-Mobile’s net customer additions in 2020 were 5.6 million, which the company said is the highest in four years. The total customer count increased to 102.1 million.

Total revenue jumped to US$68.39 billion from US$44.99 billion in the previous year following the Sprint merger and customer growth.

Net income fell to US$3.06 billion from US$3.47 billion. The increased expense from the merger was partially offset by higher revenues.

T-Mobile said its extended range 5G covers 280 million people across 1.6 million square miles. The company claims it to be nearly 4 times more than Verizon and nearly 2.5 times more than AT&T.

T-Mobile projects its ultra-capacity 5G, which covers 106 million people, to cover 200 million people in 2021.

German telecommunications company Deutsche Telekom AG is the largest shareholder in the Washington-based company with a 43.35 percent stake.

Image Source: Refinitiv, T-Mobile US share price from January to December 2020

Comcast’s cable communication revenue rose in 2020

Comcast posted a 4.9 percent year-over-year decline in its revenue to US$103.6 billion in 2020. However, the company’s cable communication revenue increased 3.4 percent during the period to US$60.05 billion as high-speed internet and wireless revenue grew 9.9 percent and 34.9 percent, respectively.

Net income attributable to the company in 2020 came in at US$10.53 billion, down 19.3 percent year-over-year. Comcast, which paid US$4.1 billion in dividends during 2020, raised its annual dividend for 2021 by 9 percent.

AT&T posts loss in 2020

AT&T's consolidated revenues in 2020 dropped to US$171.8 billion from US$181.2 billion in 2019 as the COVID-19 pandemic impacted its WarnerMedia and the domestic wireless service business.

The company reported a net loss of US$5.4 billion attributable to common stock, compared to the net income of US$13.9 billion in the year-ago period.

Meanwhile, the Texas-based telecommunications company projected its consolidated revenue to grow by around 1 percent during 2021. Gross capital investment is expected in the range of US$21 billion with capital expenditures around US$18 billion.

Verizon’s revenue declines 2.7 percent

Verizon saw its consolidated operating revenues decline 2.7 percent year-over-year to US$128.29 billion in 2020. Total consumer revenues dropped by 2.8 percent to US$88.53 billion while revenue from wireless service came down by 0.3 percent to US$53.6 billion.

The New York-based wireless carrier said its net income fell 7.3 percent year-over-year to US$18.35 billion during the year. For 2021, Verizon expects capital spending to be in the range of US$17.5 billion to US$18.5 billion.

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