The current Detecon study shows that in 2018 there were fewer mergers & acquisitions (M&A) in the telecommunications industry than in previous years. However, it was a record year for high-quality M&A deals, as a comparison between the third quarter of 2017 and 2018 shows.
This is due to the consolidation of smaller telecommunications providers in previous years. A review shows that there are currently three dominant trends that can explain this phenomenon: the rise of 5G technology, consolidation into multi-play and converged services, and increasing investment in related industries.
The new Spotlight issue examines the three most important M&A trends in the telecommunications industry and explains exemplary transactions for each trend:
- 5G technology could become the biggest driver for M&A deals
- Consolidation into Multiplay & Converged Services
- Investments in related industries
The year 2018 saw increased investments in neighboring industries. The desire of telco companies to diversify their product portfolio while expanding their customer base was the reason for many acquisitions in the Internet of Things (IoT), software and applications, advertising platforms, analytics, cybersecurity and even healthcare sectors. This shows that telecommunications companies are actively leveraging M&A transactions to reduce the risk of increased market uncertainty and improve their position in the global battle for market share, growth and sustainable profitability.