[Click e-Stock] "Large-Scale U.S. Network Investments... Korean Telecom Equipment Expected to Benefit"

There is an analysis that AT&T’s large-scale network investment plan will serve as a new catalyst for the rise of the domestic telecommunications equipment sector.

On March 12, Kim Hongsik, a researcher at Hana Securities, stated in a report titled “AT&T’s Network Investment News Is the Second Trigger for an Upswing” that “this investment announcement is regarded as the second strong investment signal following the U.S. government’s policy change.” He added, “If network investment in the world’s largest telecommunications market, the United States, expands in earnest, domestic telecommunications equipment companies are also expected to benefit.”

Recently, AT&T announced that it would invest approximately $250 billion (about KRW 370 trillion) over the next five years to expand its 5G, fiber optic, and satellite network infrastructure. The average annual investment will be about KRW 75 trillion, which is 2.5 times the average capital expenditure (CAPEX) of about KRW 30 trillion for 2024–2025. AT&T plans to use this investment to build a continuously connected network capable of reliably supporting artificial intelligence (AI), cloud computing, and autonomous applications.

Previously, the United States proposed a large-scale frequency allocation plan for July 2025, and the first frequency auction is also scheduled for June 2026. In this policy environment, AT&T was the first among the three major telecommunications companies to announce a large-scale investment plan, raising expectations for further telecommunications infrastructure investment. The industry expects that competitor Verizon is also highly likely to announce a CAPEX expansion plan in the near future.

Some say the current situation is similar to the telecommunications equipment sector in 2019. At that time, after new frequency allocations in Korea, the three major telecommunications companies launched 5G commercialization, which led to a sharp rise in the stock prices of telecommunications equipment companies. Subsequently, some companies saw actual improvement in their business performance, justifying the upward trend.

This cycle is expected to see the United States emerge as the key market. The securities industry, in particular, anticipates that domestic companies are likely to achieve performance growth, especially in the second half of this year and beyond. However, it is also emphasized that the telecommunications equipment sector is a “narrative industry,” which means that stock prices tend to rise in the early stage when investment expectations are being formed, rather than after orders and actual business results are confirmed.

Kim evaluated, “Currently, some optical communication companies in the domestic telecommunications equipment sector are already on the rise, reflecting expectations for improved performance, and wireless communication equipment companies have recently joined this upward trend.” He analyzed that an investment strategy focused on leading companies in each field is effective, with attention paid to the possibility of mid- to long-term business improvement rather than short-term results.

This content was produced with the assistance of AI translation services.