TMT Value Creators Report 2018: Telecommunications Breaking Through Bottlenecks (Boston Consulting Group)

Summary

• The telecom industry had a median five-year annual TSR of 10% from 2013 through 2017, trailing far behind most others.§1
• Telecommunications ranks 30th of 33 industries, a drop of 13 places from the previous report.§2
• Across industries, median annual TSRs increased by an average of 4 percentage points between the two five-year periods, while telecom's dropped by 1 percentage point.§2
• Verizon's $4.4 billion takeover of AOL in 2015 and $4.5 billion purchase of Yahoo!'s core internet business in 2017 gave it access to digital advertising platforms.§4
• Two-thirds of the acquisitions and investments made by major telcos from 2012 through 2016 were in adjacencies and new frontiers.§5
• Vodafone merged its India subsidiary with Idea Cellular in a $23 billion deal in 2017.§6

Key insights

1. Globally, mobile data traffic is expected to quadruple from 2017 through 2021.§1
2. Within the top ten, Japanese telcos have four spots and US cable companies have two.§2
3. Charter Communications ranks only 49th overall among all TMT companies.§2
4. Orange is using self-service apps and AI-empowered chatbots to improve customer experience.§3
5. NTT Communications is now one of the five largest data center operators globally.§4
6. BT's managed security services and cyberconsulting businesses generated an estimated combined $500 million in revenue in 2016.§4
7. Regulation is the wildcard for telecom M&A, with the impact varying by country or region.§6