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Telecoms: Merger and acquisition activity in telecoms forecast to change market landscape

Telecoms: Merger and acquisition activity in telecoms forecast to change market landscape

Summary

The telecommunications industry is in a curious place right now. Mobile phone usage, internet traffic and data consumption has exploded and is only set to accelerate as far as most can see, yet telecoms companies that provide the facility to do any of these things, are struggling to grow at present. There are multiple issues but principally it is not obvious what business model telecoms companies should adopt in order to secure their futures.

Furthermore all kinds of large new disruptive events in the industry are looming over the next decade, from the emergence of new technology that might disrupt the main players, the building of the 5G network, trying to realize the dream of the internet of things and colossal M&A activity. There are some good opportunities present in the industry, but without careful planning and redesigning of the traditional telecommunications business model, it is entirely possible some of the world’s biggest carriers might struggle to stay independent over the next few years.

Key highlights

  • The decision of a federal judge to clear the way for the merger of AT&T and Time Warner - a deal that has been in the works since before the last presidential election, and which courted the displeasure of both candidates at the time due to the focus upon corporate greed at the time - is expected to enable a series of mergers and acquisitions within the US telecoms market.
  • Whilst the merger itself is positive news regarding the leading figures within the US telecoms market, further very large deals are now expected to move ahead swiftly; many industry insiders were reported as believing if the President could not halt the AT&T and Time Warner deal, passing other deals through the regulatory authorities will present few difficulties. Protestations from the Justice Department have so far failed to gain any appreciable degree of support from the business press.
  • The shape telecoms companies take will now never be the same again. Market insiders have been concerned about the rise of internet streaming rivals for some time, and now the likes of Time Warner can become the joined up service that is required to offer stern competition.
  • Normally rivals would not be hoping for another to strike success in a big cross-vertical, but the AT&T and Time Warner merger opens up highly significant opportunities elsewhere in the market for similar mergers. Leading telecommunications companies are acutely aware of the need for much grander, joined up services that encompass television, broadband and cell phone services. One such company is Comcast. Immediately following the ruling on the AT&T case, speculation about when, rather than if, Comcast would embark on a deal to take possession of Fox Studios began in the business press.
Scope
  • Examine the business landscape in the telecoms industry and how the big players are coping
  • See just how the environment is difficult and new business strategies need to evolve
  • Explore some of the biggest M&A deals, why they happened and how they are fairing
  • Prepare for the new 5G and Internet of thing environments and how they might effect the big carriers
Reasons to buy
  • What are the big players doing in the telecoms industry to cope with static revenue problems?
  • Why is the industry suffering from issues of static revenues?
  • Will 5G and the internet of things give the industry a boost?
  • What players have a successful strategy at present?


Overview
Catalyst
Summary
Merger and acquisition activity in telecoms forecast to change market landscape
AT&T and Time Warner merger deal will transform telecommunications in United States
Judge ruling on AT&T and Time Warner ignites showdown for possession of 21st Century Fox
T-Mobile deal with Sprint faces obstacles but would appear likely to go ahead
Ability of Europe to create genuine global player is about to be tested
Mixed signals from French telecoms regulators leaves much uncertainty regarding the future of European market
Conclusions
Appendix
Further Reading
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Disclaimer
List of Figures
Figure 1: AT&T Time Warner merger
Figure 2: Comcast merger with 21st Century Fox is possible
Figure 3: T-Mobile and Sprint merger in US is being mooted
Figure 4: Vodafone

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