Digital disruption and changing consumer preferences are driving telecoms executives to consider M&A deals outside of the sector, according to new research.
More than a third (34 percent) of respondents to EY’s biannual Capital Confidence Barometer said they are pursuing cross-sector deals to gain access to new materials or digital technologies.
A further 30 percent of telecom execs are pursuing adjacent market deals that address changes in customer behaviour.
Following a wave of industry consolidation in 2015, EY said overall deal intentions have stabilised.
However, it described the M&A market as “robust” with 43 percent planning to actively pursue acquisitions in the next 12 months and 62 percent having three or more deals in the pipeline.
Earlier this month, Gervais Pellissier, Orange's Deputy Executive Director for Europe, said in-market consolidation is off the table for at least 18 months as the industry sifts through the implications of recent failed deals.
The EY report surveyed 110 senior leader of telcos around the world.
Advances in technology and digitalisation present the greatest disruption to the core businesses of 27 percent of respondents.
Gaeron McClure, EY Global Telecommunications Leader, Transaction Advisory Services, said: “Some telecommunications companies have seized on alliance opportunities with auto makers to provide end-to-end solutions that connect the Internet of Things (IoT) to the connected car for premium buyers.
“Others have worked with banks to deliver mobile banking and micropayment options to their customers, while some are teaming with media or technology companies to bring new products and services to market.
“We expect to see many more alliances of this nature as emerging technologies become ubiquitous.”
