Telecommunications companies show elevated deal appetite in the search for growth.
Telecommunications companies continue to be at the forefront of disruption, a place that impacts everything from strategic growth drivers, to boardroom agendas, to the talent agenda, according to the latest edition of the Global Capital Confidence Barometer.
With an all-time high 62% of telecommunications executives actively pursuing deals in the next 12 months, the emphasis is on innovation. Almost 50% indicate they are juggling three or more deals in their pipeline as they look for bolt-on deals that can help them expand into new areas and boost market share.
All inorganic growth options are on the table
Although mergers and acquisitions are the main focus, telecommunications companies are looking at all inorganic growth options in an effort to futureproof their business in an age of constant change. Looking to seize the upside of disruption, 35% of executives see joint ventures and alliances as a means of gaining faster access to innovation or leveraging the brand recognition of a partner.
However, given the rapid pace of change, a third of respondents admit that implementing and enabling a digital innovation culture is one of the hardest aspects of their digital transformation.
Talent remains a top priority
Yet for telecommunications executives, their people remain a top priority. Unwilling to swap people for technology or tools, companies are instead looking to shift skills and talent within the business, or reskill their people to better respond to technology challenges. The goal is to build a more responsive talent organization that can meet the challenges of today’s business environment.
Telecommunications executives look to balance growth with risk
Although deal intentions are high and telecommunications executives are feeling increasing confidence in the global economic outlook, market volatility has returned as a source of concern for telecommunications executives. At the same time, increasing government and regulatory intervention is adding a new layer of risk. Uncertainty about policymaking has telecommunications executives on the lookout for any impediments that could slow the flow of trade or labor, while antitrust concerns may yet hinder future consolidation scenarios.
As telecommunications companies look at the year ahead, we expect deal intentions to remain brisk. Digital transformation and pursuing inorganic growth opportunities will remain atop the boardroom agenda as they consider a wide range of options to maintain their competitive market position in a market that continues to evolve.