Mergers and acquisitions

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Global telecom M&A volume in the first half of 2016 was consistent with the second half of 2015, reaching 273 deals, compared with 277, and signaling a steady appetite for transactions. Deal volume in the first quarter of 2016 was 117, outpacing the year ago figure of 89, which was the lowest in the last two years.

Global telecom M&A by target area

EY - Global telecom M&A by target area

In-market convergence remains buoyant

We continue to see a number of deals where operators are scaling up in core market segments at the country level. Pure-play consolidation in a single market segment remains popular, as do more convergence-oriented deals where players combine telecom and media capabilities. This comes as bundling different service elements to increase customer satisfaction, reduce churn and increase share of wallet is top-of-mind for many.

Dealmaking heats up in Canada

The Canadian market has witnessed a number of deals in recent months predicated on convergence opportunities. These deals include Bell Canada Enterprises (BCE) bid to acquire Manitoba Telecom Services (MTS), the leading operator in the western province of Manitoba; Shaw Communications selling its broadcasting subsidiary, Shaw Media, to Corus Entertainment, an integrated media and content company; and Telecom and media provider Quebecor boosting exposure to the enterprise segment for its Vidéotron unit by acquiring Fibrenoire, which provides business connectivity.

Carriers bolster their OTT video capabilities

Numerous carriers are seeking upside across different elements of the video services value chain, recognizing that video drives data traffic growth and presents new business model opportunities. During 2016, acquisitions by US carriers underlined this growing interest.

Bolder moves into IoT are underway

Operators are already playing an important role in the IoT by providing machine-to-machine (M2M) connections, and acquisitions are adding capabilities in key verticals as companies look to monetize their offerings beyond pure connectivity.