Zacks Industry Outlook Highlights: AT&T’s, CenturyLink, Qualcomm and Comcast

CHICAGO, June 27, 2011 /PRNewswire/ -- Today, Zacks Equity Research discusses the Telecommunications industry, including: AT&T (NYSE: T), CenturyLink Inc. (NYSE: CTL), Qualcomm Inc. (Nasdaq: QCOM) and Comcast Corp. (Nasdaq: CMCSA).

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A synopsis of today's Industry Outlook is presented below. The full article can be read at http://www.zacks.com/stock/news/55667/Medical+Devices+Stock+Outlook+-+June+2011

Smartphones and tablets have become the next-generation products of choice and are increasingly taking over market share from the basic mobile handsets. Although the economy in a recovery phase and we are not completely out of the woods yet, the growth in the smartphone market maintains its impressive trend.

This reflects a shift in consumer preference toward application-rich devices from ordinary mobile handsets used primarily for voice telephony. Smartphones are generally characterized by very powerful operating systems capable of supporting a variety of services and applications that need very high-speed network infrastructures.

Various industry sources estimate that smartphone shipments as a percentage of total mobile handset shipment are expected to increase by 58% in 2011 over last year. This opportunity provides scope for telecom service providers, equipment developers, chipset manufacturers and wireless tower operators to retain new users and grow revenues moving forward.

Less than a decade ago, the telecom operators in the U.S., Western Europe and Japan were upgrading their existing networks to high-speed 3G technologies. At present, the world telecommunications industry is talking about the installation of next-generation super-fast 4G technologies.

Several giant telecom operators globally are funding projects to deploy super-fast 4G networks of WiMAX and LTE (Long-Term Evolution). As of now, 19 LTE networks are commercially operational throughout the world. Cable TV operators are also upgrading their networks with high-speed DOCSIS 3.0 architecture.

The GSM Association forecasts that within the next 5 years, telecom service providers will invest approximately $100 billion to upgrade their respective networks to accommodate hassle free transmission of mobile data and video traffic. The major technical areas will be High-Speed Packet Access (HSPA), 3G mobile broadband, and next-generation (4G) LTE. One simple example of this significant rate of growth is the LTE network, which was globally first deployed in late 2009, and which now provides over 1 million connections.

As smartphone users are now downloading increasing multimedia content, video has become the primary network traffic. What is more interesting, in addition to download, the smartphone and tablet users are uplinking more and more video content and in turn becoming broadcasters on their own. Several industry researchers predict that video may account for 60% of total network traffic by the end of 2012.

Competition and Consolidation

Massive technology invention and innovation have resulted in the creation of competitive atmosphere within the telecommunications industry. Product life-cycles and upgrade-cycles have been reduced drastically since several firms are coming out with new types of products and services within a short span of time. As a result, we are witnessing hectic merger and acquisition activities to consolidate the market share.

The biggest of the merger and acquisition activity is AT&T's (NYSE: T) proposed buyout of T-Mobile U.S. If this deal gets regulatory approval, it might become the largest acquisition in this industry in the post-recession period. In other major deals, CenturyLink Inc. (NYSE: CTL) has acquired Quest Communication, Qualcomm Inc. (Nasdaq: QCOM) has acquired Atheros Communications, and Comcast Corp. (Nasdaq: CMCSA) has purchased NBC Universal's 51% stake.

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