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Overview

New and rapidly changing content distribution and consumption models are driving an unmistakable shift to digital platforms. Only sophisticated, well-capitalized players with the right mix of capabilities will be able to navigate the technology and ecosystem evolution to satisfy growing consumer expectations. However, many communications-sector players will find it increasingly difficult to build these capabilities organically; the investment required could be out of reach for most companies. That’s why M&A will play a major role in keeping communications companies competitive. Where communications companies place their bets and how successfully they execute these deals ultimately could determine their long-term survival.

DOWNLOAD M&A IN COMMUNICATIONS: EVOLVING TO GAIN AND MAINTAIN COMPETITIVENESS [PDF]

KEY FINDINGS

M&A will play a major role in communications companies’ pursuit of critical digital platform capabilities needed to satisfy the demands of today’s consumers:
  • According to Accenture research, 40 percent of executives believe adopting a platform-based business model and engaging in ecosystems of digital partners are very critical to their business success.

  • Further underscoring the value of platform capabilities is the market cap of Amazon, Apple, Facebook and Google, which is double the market cap of 15 of the largest traditional US communications companies combined.

  • But the money to close that gap organically will be hard to find in most companies. That’s why M&A remains an important option to acquire the right digital platform capabilities and remain competitive.

  • Compounding the problem are the costs of total 5G network upgrade costs, estimated at $104 billion over 10 years. Scale players will be much better positioned than smaller ones to make this investment.

M&A infographic

RECOMMENDATIONS

Three keys can help communications companies choose the best route to infusing digital platform capabilities and, when M&A is the preferred option, enhance their chances for success:
  1. Develop a growth strategy to respond to the shift to digital and changing customer expectations


  1. Devise an acquisition strategy to close important capability gaps


  1. Make the customer experience core to both corporate and M&A strategy



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