Telecommunications industry

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The telecommunications industry within the sector of information and communication technology comprises all telecommunication/telephone companies and Internet service providers, and plays a crucial role in the evolution of mobile communications and the information society.

Contents

Telephone calls continue to be the industry's largest revenue generator, but due to advances in network technology, telecom today is less about voice and increasingly about text (messaging, email) and images (e.g. video streaming).[ citation needed ] High-speed Internet access for computer-based data applications such as broadband information services and interactive entertainment is pervasive. Digital subscriber line (DSL) is the main broadband telecom technology. The fastest growth comes from (value-added) services delivered over mobile networks. [1]

The telecom sector continues to be at the epicenter for growth, innovation, and disruption for virtually any industry. Mobile devices and related broadband connectivity continue to be more and more embedded in the fabric of society today and they are key in driving the momentum around some key trends such as video streaming, Internet of Things (IoT), and mobile payments.

— Deloitte [2]

Think of telecommunications as the world's biggest machine. Strung together by complex networks, telephones, mobile phones and internet-linked PCs, the global system touches nearly all of us. It allows us to speak, share thoughts and do business with nearly anyone, regardless of where in the world they might be. Telecom operating companies make all this happen.

— Investopedia [1]

Insight Research [3] projected that telecommunications services revenue worldwide would grow from $2.2 trillion in 2015 to $2.4 trillion in 2019. [4]

Market segmentation

Of all the customer markets, residential and small business markets are the toughest. With hundreds of players in the market, competitors rely heavily on price; success rests largely on brand name strength and investment in efficient billing systems. The corporate market remains the industry's favorite. Big corporate customers are concerned mostly about the quality and reliability of their telephone calls and data delivery while being less price-sensitive than residential customers. Multinationals, spend heavily on telecom infrastructure and premium services like high-security private networks and videoconferencing. Network connectivity can also be provided to other telecom companies by wholesaling circuits to heavy network users like internet service providers and large corporations. [1]

Value chain

2018 share of revenues by segment [5]
segment% share of revenues
Infrastructure and platform vendors5
Device vendors20
Operators55
Over-the-top content (OTT), content, advertising services10
Retail and distribution10

Global players

Top global telecom companies in 2013 [6]
CompanyCountry Market value ($ Bn) Revenue Profit
China Mobile China213.888.820.5
AT&T USA200.1127.37.3
Verizon Communications USA137.3115.70.9
Vodafone UK135.774.411.1
América Móvil Mexico70.760.27.1
Telefónica Spain67.182.35.2
Telstra Australia58.425.83.5
Nippon Telegraph & Tel Japan58.21275.6
Deutsche Telekom Germany48.876.7-7
Softbank Japan47.238.783.8

Mergers and acquisitions

Around 24,800 M&A deals have been conducted in the telecommunication industry with either the acquirer or the target company coming from the telecommunications sector. In total over 5.712 bil. USD have been spent on M&A between 1985 and 2018 in this industry. [7] There has only been one big M&A wave around 1999 and 2000. In most other industry there are three waves between 1990 and 2018. Since 1999 deal value shrunk by -90.12% and is expected to stagnate in 2018.

Here is a list of the top ten telecommunication deals in history ranked by volume:

Date AnnouncedAcquiror NameAcquiror Mid IndustryAcquiror NationTarget NameTarget Mid IndustryTarget NationValue of Transaction ($mil)
11/14/1999Vodafone AirTouch PLCWirelessUnited KingdomMannesmann AGWirelessGermany202,785.13
09/02/2013Verizon Communications IncTelecommunications ServicesUnited StatesVerizon Wireless IncWirelessUnited States130,298.32
03/05/2006AT&T IncWirelessUnited StatesBellSouth CorpTelecommunications ServicesUnited States72,671.00
05/11/1998SBC Communications IncTelecommunications ServicesUnited StatesAmeritech CorpTelecommunications ServicesUnited States62,592.54
01/15/1999Vodafone Group PLCWirelessUnited KingdomAirTouch Communications IncTelecommunications ServicesUnited States60,286.87
01/26/2000ShareholdersOther FinancialsCanadaNortel Networks CorpTelecommunications EquipmentCanada59,973.57
06/14/1999Qwest Commun Intl IncTelecommunications ServicesUnited StatesUS WEST IncOther TelecomUnited States56,307.03
06/24/1998AT&T CorpTelecommunications ServicesUnited StatesTele-Communications IncCableUnited States53,592.49
07/28/1998Bell Atlantic CorpTelecommunications ServicesUnited StatesGTE CorpTelecommunications ServicesUnited States53,414.58
04/22/1999AT&T CorpTelecommunications ServicesUnited StatesMediaOne Group IncCableUnited States49,278.87

Recent developments

The telecommunications sector has seen a large increase in the recent years. Whereas in 2015 there were 3.3 billion active mobile broadband subscriptions worldwide, in 2020 there were around 7.7 billion. This increase was due, in part at least, to the deployment of 4G LTE. [8]

During the COVID-19 pandemic, telecommunications was used to track the spread of COVID-19 and was use by remote workers to conduct business during the COVID-19 lockdowns. [9]

Societies

See also

References

  1. 1 2 3 "The Industry Handbook: The Telecommunications Industry". 7 January 2004.
  2. ↑ "2017 Telecommunications Industry Outlook - Deloitte US". Deloitte United States.
  3. ↑ "Insight Research - Telecom Market Research Reports, Industry Analysis, Custom Consulting Services". www.insight-corp.com. Archived from the original on 2017-12-01. Retrieved 2016-02-23.
  4. ↑ "Worldwide Telecommunications Industry Revenue to hit $2.4 Trillion in 2020, says Insight Research" (Press release).
  5. ↑ "Global telecommunications study: navigating the road to 2020" (PDF). EY. Archived from the original (PDF) on 2016-04-09.
  6. ↑ "Top 10 Telecom Companies of the World 2013". Archived from the original on 2017-10-28. Retrieved 2016-02-23.
  7. ↑ "M&A by Industries - Institute for Mergers, Acquisitions and Alliances (IMAA)". Institute for Mergers, Acquisitions and Alliances (IMAA). Retrieved 2018-02-28.
  8. ↑ "Intelligence Report - Key Global Telecom Industry Statistics". researchandmarkets.com. Archived from the original on 2021-12-14. Retrieved 2021-12-12.
  9. ↑ "The telecom sector in 2020 and beyond". www.mckinsey.com. Retrieved 2021-02-05.
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