With falling prices and the battle to gain market share intensifying among non-traditional and traditional telecoms operators, there is just not enough room for multiple operators in most markets. To regain firm footing and financial stability, most telco executives are feverishly scouting new business opportunities through consolidation.
The most visible threat to the traditional telco is the cable company, which is ahead in the race for the coveted ‘triple play’ prize. In addition satellite DTH operators are beginning to focus on providing new services (e.g. broadband) to bundle with their television services. To catch up, telecom players worldwide are racing to upgrade their transport and access infrastructures to enable cost-effective ways to provide new integrated services via a single network over a single access pipe. So old competitors are morphing into valuable allies and forming industry partnerships to extend and complement existing technologies and service offerings. Sharing assets, even customers, is beneficial, but analysts also predict a spate of mergers and acquisitions as the industry heads toward fewer but stronger companies.
How PricewaterhouseCoopers can help
Industry partnerships, joint ventures, divestitures, mergers and acquisitions all require in-depth analysis, careful evaluation and a thorough understanding of valuation methods, business models and regulatory implications. PricewaterhouseCoopers can help telco clients determine the objectives of the transaction, structure the deal, and develop materials to convey details to interested parties. We can also identify acquisition targets or buyers, make introductions, assist with financing, and keep shareholders apprised of proceedings. To assist with the negotiation and finalisation of the deal we can provide detailed due diligence (financial, tax, pensions/human resources, treasury, IT). After the deal is done, we can advise companies on how to optimize structures to realize a smooth transition and improved financial performance.
