US & ASIAN OPERATORS CONTINUE TO DOMINATE

27 April 2018 -- US and Asian operators continue to dominate the world's telecoms market. Total Telecom has released its Global 100 list, which compiles the 100 biggest telecoms companies in the world by revenue. There are no real surprises although the report does throw up a number of interesting points. Unsurprisingly, AT&T remained the biggest company in the industry amassing revenues of €131.8 billion. While there was little movement in the top 10 and none at all in the top 4.

Consolidation by some of the industry's big players could have quite a profound effect on next year's positioning. When Vodafone Group swallows up Idea cellular in the coming months, the newly formed entities combined revenues should propel Vodafone up the league table, from its current position of 7th.

While consolidation seems to be the watchword for the next twelve months, telcos are limited in their options on the M&A front. Regulatory constraints, particularly in Europe, mean that we are unlikely to see very much like-for-like M&A activity anytime soon. Instead, operators are looking at consolidation as a way to diversify their business interests into more profitable areas. M&A activity that allows telcos to more easily provide their customers with the Holy Grail of quad-play services is more likely to gain regulatory approval.

 The sheer revenue-generating power of scale is evident from looking at the top 100 companies from around the world. The biggest 4 companies, namely AT&T, Verizon, China Mobile and NTT, all operate in markets with huge numbers of consumers but a comparatively low number of operators. With Deutsche Telekom flying the flag for Europe down in 5th place, it is hard to see how European operators can hope to compete with their US and Asian cousins.

Market conditions are challenging at best. Seven of last year's top 100 operators had ceased to exist either being swallowed up by larger competitors or filing for bankruptcy.

Copyright ©2005-2018 Galbraith & Company P/L.