Investing in telecoms companies in SA and US — 2022 review

2022 was a brutal start of the year for tech giants. Netflix is down 70%, Nvidia dropped 44%, and Facebook declined 43%.

It is not only tech stocks which took a hammering. The S&P 500 recorded its worst start of the year since 1939, while the Nasdaq is down over 25% in 2022.

Although most technology stocks took a pummelling, a few companies weathered the storm and showed growth. These include telecom operators, T-Mobile and AT&T.

T-Mobile’s share price increased by 9.45% year-to-date. This rise is in line with expectations.

Bloomberg Intelligence analyst John Butler said T-Mobile’s early lead in rolling out 5G would help the operator outperform its competitors and increase sales.

T-Mobile was also the pick among many analysts as a stock to hold when a recession hit. It was partly thanks to its spectrum assets after a deal with Sprint.

AT&T is also well-positioned to weather a recession because of cost-cutting measures.

Analyst Michael Rollins said it could “serve as a possible cushion if the company were to experience additional financial pressures in a recession scenario.”

Locally, Vodacom was the best performing share this year, rising 5% year-to-date. MTN declined by 4%, and Telkom was down 16%.

South African investors are currently debating whether local or international equities will serve people’s needs the best.

This debate gained momentum following the crash in tech shares in 2022, which caused pain among investors heavily invested in US tech giants.

Despite the dismal start to the year for US markets, the top American telecom operators still outperformed Vodacom, MTN, and Telkom in rand return.

The average share price performance of US telecoms giants T-Mobile, AT&T, Verizon, and Comcast was -1.62% year-to-date.

In comparison, Vodacom, MTN, and Telkom declined by an average of 5.10%.

The table below shows the performance of the largest US and South African telecom companies in 2022.

The performance is calculated in rand, showing the returns of losses for South African investors.

US Telecommunications Companies
Company Exchange 1 January 2022 (in ZAR) Current (in ZAR) Percentage Change
T-Mobile NASDAQ 1825.28 2009.85 10.11%
AT&T NYSE 306.10 324.65 6.06%
Verizon NYSE 836.47 784.59 -6.20%
Comcast NASDAQ 809.36 676.10 -16.46%
South African Telecommunications Companies
Company Exchange 1 January 2022 (in ZAR) Current (in ZAR) Percentage Change
Vodacom JSE 134.80 141.84 5.22%
MTN JSE 172.04 164.62 -4.31%
Telkom JSE 54.26 45.47 -16.20%

Now read: South African telcos building robust 5G networks

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Investing in telecoms companies in SA and US — 2022 review