The report below gives a good overview of the Winter 2024 M&A activity in the Technology, Media and Telecom Industry Sector. The telecommunications industry is rapidly transforming, driven by the demand for innovative applications such as autonomous vehicles, robotic surgery, and a myriad of seamless digital interactions. These advancements are made possible by significant investments in 5G infrastructure by telecommunications companies, reflecting the industry's dynamic evolution to meet the diverse needs of businesses and consumers. According to a McKinsey report, over the next decade, specific tech roles are predicted to see a 20 to 30 percent increase in demand across US industries, potentially surpassing the growth in the supply of recent STEM graduates, which was only 5 to 10 percent annually from 2015 to 2019. Telcos, especially, are expected to face higher demand for roles like electrical engineers, with a projected growth of 24.4 percent by 2031 compared to 5.9 percent in other sectors. Based on "The Global Economic Impact of 5G" by PwC, 5G technology has the potential to add $1.3 trillion to global GDP by 2030, with more than 80% of the economic potential lying in healthcare applications, smart utilities management, and consumer and media applications. The report also states that 5G will be a key part of the new operating environment and technology toolkit for businesses, enabling new use cases and business models, and resulting in the creation of higher value for businesses, employees, customers, and entire economies. As economic pressures tighten, consumers in the media industry face increased challenges, with 32 million U.S. users canceling streaming services in Q3 2022 due to inflation. A saturated streaming market will witness significant consolidation in 2023, emphasizing key performance indicators like ARPU, churn, and profitability. Ad markets anticipate slower growth, with a 5.9% YoY increase in overall ad spend from 2022. Sports teams experience a vibrant market with increased M&A activity and the rise of direct-to-consumer sports offerings. Media companies shift focus to profitability, conducting strategic reviews amid economic uncertainties, labor costs, and inflation.
Posted by Dan Vermeire.