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Telecom: Firms Strive to Be More Than 'Dumb Pipes'

U.S. telecoms are working to diversify away from being pure wireless network providers.

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  • Overall, we view the communications services sector as fully valued at a market-cap-weighted price/fair value of 1.01.
  • U.S. telecom continues to combat the fear of being a "dumb pipe."
  •  China Mobile (CHL) still dominates in broadband even as the mobile subscriber market evens out a bit.

U.S. Telecom Continues to Combat the Fear of Being a 'Dumb Pipe'
Perhaps the most important trend we're seeing in U.S. telecom is the ongoing shift in strategy to diversify away from being a pure wireless network provider.  AT&T (T), in particular, continues to move away from wireless and into satellite television and over-the-top, or OTT, TV via its acquisition of DirecTV and, more recently, the firm's pending entry into the media content space via its acquisition of  Time Warner (TWX).

Brian Colello does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.