Market Analysis: Barclays
Barclays’ Amir Rozwadowski observed the combination of heightened anxiety around several structural and competitive concerns, coupled with fairly muted expectations heading into the Q2 reporting cycle, gave way to some notable surprises, including better than expected performance out of legacy players and services.
Rozwadowski said carriers continued to invest at healthy levels with each carrier tied to their own individual network strategies and that overall, carriers have reported mixed Q2 capex results (AT&T below expectations, T-Mobile in-line, and Verizon above).
“However, with each carrier re-affirming their full-year capex expectations, we expect spending trends to remain steady for the remainder of 2017,” he said. “Tower operators’ commentary adds to our constructive outlook for spending trends. Key focus areas seem to be new spectrum deployment and fiber.” In his recent ‘Roz Report,’ Rozwadowski said Crown’s acquisition of Lightower suggests increased confidence in outdoor small cells and Cisco’s shuttering of its business and the sale of SpiderCloud suggests less momentum in indoor.
“We do not believe these developments are likely to fully alleviate the prevailing concerns around mobile competition or pressures to the linear video distribution model and thus continue to focus on how these evolving dynamics are likely to impact the competitive structure going forward,” Rozwadowski said. “Against this backdrop, we believe that several notable data points have emerged over the first two weeks of earnings that are worth taking a look at,” he said in his latest ‘Roz Report.’ “This isn’t to say that the structural dynamics underscoring these concerns (i.e. linear TV pressure, OTT threats) are gone; however, we do believe that better-than-expected performance from AT&T and Verizon’s wireless businesses, and better-than-expected video subs on the back of cable providers, are the notable standouts for the quarter thus far.”
August 1, 2017
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