Interactive
Facing unprecedented industry transformation and emerging competitive threats, many telecommunications companies are turning to mergers and acquisitions to add new capabilities and evolve their businesses for the next era. At the same time, in the biggest industry reset since deregulation, the integrated telco is giving way to more disaggregated, narrowly focused business models. We’re tracking telecom M&A activity around the world, and each quarter, we’ll publish the latest developments in this dashboard.
Here are some of the key takeaways through the fourth quarter of 2022:
- Deal value down: In a reversal of 2021’s strong growth, telecom M&A deal value declined 52% year over year, from $163 billion in 2021 to just $79 billion in 2022 (see panel 1). Regionally, Europe, the Middle East, and Africa continues to dominate the majority of global transaction value, with about 50% in 2022, followed by the Americas at 28%.
- Infrastructure deals strong: Infrastructure deals made up about 64% of global deal value (see panel 2), primarily due to a spate of tower deals totaling around $32 billion. Infrastructure deals accounted for a whopping 96% of total deal value in the fourth quarter alone. Those numbers also come with an important caveat, as 2022 saw a larger number of transactions without disclosed deal values compared with the previous year, particularly in the Americas and in infrastructure, which likely makes the overall year-over-year decline in deal values look larger than it actually was. Nevertheless, two other factors contributed to the drop in total deal value last year: the higher cost of debt and a 14% decrease in the number of deals in 2022 compared with 2021.
- Biggest deals: The largest announced deal of 2022 was an in-country scale transaction (see panel 1); Orange and MásMóvil announced that they intend to merge their Spanish businesses to expand their fiber-to-the-home businesses and 5G networks.
- Long-term view: In-country M&A accounts for nearly half of total deal value since 2016 (see panel 3), mainly because of growth in scale deals.
Bain’s Quarterly Global Telecom M&A Insights
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Telecommunications M&A
Challenger consolidation and digital infrastructure deals resulting from the rising cost of debt will reshape the industry further.