​Jeff Kagan: Consolidation, Expansion in Telecom, Wireless, PayTV

Jeff Kagan  |


Over the last 30 years, I have consulted with countless companies and have noticed two important developing trends. Consolidation and expansion. It started with many separate segments and many smaller competitors. Over time, two things have been happening. One, companies are merging. Today there are fewer, yet larger competitors. Two, each company offers services from other sectors. Services they never offered before. So, where is the industry heading?

When I started in the mid 1980s, everything was different. There were many smaller competitors which competed in one segment. Period. I remember this because my name is Jeff Kagan and back then my title was Telecom Industry Analyst. And there was another analyst with the name Paul Kagan, who was in the same business, but Paul Kagan Associates was on the cable television side of the industry.

Our paths never crossed. Even though we did many of the same things, we didn’t compete with each other because we both worked in different segments. Back in the 1980’s I followed telephone and he followed cable TV. Years ago, Paul sold his company and it changed its name to SNL Kagan.

Times have changed. Today, I follow many sectors like wireless, telecom, pay TV, Internet, and to a wider extent, most of the personal technology industry on both the consumer side and business side. This is a quickly changing, consolidating and expanding industry.

Back in the 1980s and 1990s, there were separate sectors with smaller competitors. Now, fast forward to 2017 and the entire industry has changed. Today, the seven baby bells merged into three giants, AT&T (T), Verizon (VZ) and CenturyLink (CTL). Today, the long-distance industry with AT&T, MCI and Sprint is no longer a separate sector. Today, dozens of tiny wireless carriers have merged into four giants, AT&T Mobility, Verizon Wireless, T-Mobile (TMUS) and Sprint (S), although there are still smaller competitors.

In fact, today there are new wireless competitors entering the space as well. Companies like Google (GOOGL) Project Fi, Comcast (CMCSA) Xfinity Mobile and Charter (CHTR) will enter next year.

So, while yesterday there were countless smaller competitors in one segment or another, today there are fewer, larger companies which compete in many sectors. Look at how companies like AT&T and Verizon offer wireless, telephone, VoIP, Internet, pay TV and more. Look at how Comcast is offering cable TV, VoIP, Internet and wireless. Look at how Google is selling smartphones and service in addition to Android.

AI, IoT, VR, AR, M2M, B2B and More!

The industry is both consolidating and expanding. It is growing in new ways and that is both confusing and exciting. It continues to rapidly move forward into new segments like Artificial Intelligence, the Internet of Things, Virtual Reality, AR and so much more.

These new technologies are the first step into a new world of growth going forward. AI will continue to grow and expand into new areas. Consider IBM (IBM) Watson as one high profile example. In fact, AI will continue to grow in importance in every industry and every company going forward. And it will need wireline and wireless networks to communicate.

IoT is another big growth opportunity. This is the invisible part of the Internet. It lets machines talk to other machines. M2M and B2B are some of the incredible forward moves of this sector.

All these technologies will continue to impact our lives. It will affect consumers, businesses, governments and more. Some of this technology will be used by us, while other parts will just happen behind the scenes. However, these new technologies will become more important and pervasive as we move forward.

It’s all very exciting. Lots of growth in many different segments. And it all started decades ago with the telephone and cable TV. It’s all about expansion and consolidation. Tomorrow will continue to grow and change. When we look backwards we see how much the world has changed over the last few decades. Looking forward we can expect more transformation. Who would have thought?

Jeff Kagan is an Equities.com columnist. Kagan is a Wireless Analyst, Telecom Analyst, Industry Analyst, speaker and consultant. He follows wireless, wire line, telecom, Internet, cable TV, IPTV, Cloud, Mobile Pay, FinTech and communications technology. Email him at jeff@jeffKAGAN.com. His web site is www.jeffKAGAN.com. Follow him on Twitter @jeffkagan.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
IBM International Business Machines Corporation 120.89 -0.24 -0.20 5,042,895 Trade
S Sprint Corporation 5.94 0.01 0.17 7,749,337 Trade
TMUS T-Mobile US Inc. 65.53 -0.20 -0.30 2,475,314 Trade
CHTR Charter Communications Inc. 312.54 -3.10 -0.98 947,378 Trade
VZ Verizon Communications Inc. 58.85 0.58 1.00 14,991,438 Trade
CTL CenturyLink Inc. 16.97 -0.08 -0.47 11,191,941 Trade
T AT&T Inc. 29.70 -0.21 -0.70 49,559,270 Trade
CMCSA Comcast Corporation Class A Common Stock 36.84 -0.51 -1.37 24,295,013 Trade

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