Chinese technology stocks have been enjoying a better run than their US peers owing to more protectionist regulations, heavily diversified revenue streams and brighter prospects in the telecoms market. A long-term correction in prices is expected, but the short term will reward Chinese tech investors.
Updated telecoms legislation would help the mobile market to develop as it would provide better competition and lower prices. Furthermore, the reforms could set a framework for the entry of MVNOs in the future, developing more advanced services in the long-term.
With its licence being valid, Claro will be able to quickly grow its market share with double-play bundles, pushing rivals to seek consolidation in the cable market. Other players like Telef?nica will try to also enter the market using the same decision, but this could be met with regulatory obstacles.
The FCC is continuing with its pro-telecoms operators and light-touch regulation approach, which will culminate in the repeal of the Open Internet rules. On the other hand, the DoJ, also under the guise of light-touch regulation, is taking a stronger stance on vertical mergers and structural remedies. The contradiction could impact the future structure of the market.
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Thanks, BMI Research