Delta Partners outlines emergence of global telecom market

The paper discusses the development of the global telecom sector and the potential for further consolidation in the industry, as well as the increasing levels of globalization in the telecoms world.

'The telecoms sector is fast becoming a truly global industry, similar to the financial services sector in the last decade,' says Kristoff Puelinckx, Managing Partner Delta Partners and co-author of White Paper.

'Operators start to realize it is possible to run the business on a global level. Shareholders constant demands for new growth markets will make this globalization trend almost inevitable. With operator cash positions improving, the question seems no longer if it will happen, just when and who will start this trend,'

adds Puelinckx.

The paper outlines five categories of telecom players, clustered by size, footprint and hunger for expansion. The key operators are made up of the Global Titans, European Indecisives', Asian Tigers, Emerging Challengers and National Players. The paper emphasises the relevance of understanding these trends and specifically the implications for operators in the Middle East and Africa. As more and more regional operators are drafting their own international expansion agenda, understanding and war gaming the plans of the global titans seems key.

'Regional operators will need to decide on their future direction and vision, and ask what type of operator they want to become,' says Puelinckx. This requires a conversation between management and shareholders as buy or being bought seem the only true alternatives. Both are valid strategies that if are followed consciously can maximize shareholder value.'

The Delta Partners White Paper - 'The Emergence of Global Industry Titans and Implications for Emerging Market Players,' is now available for review.

Key figures and highlights covering the emerging telecom sector in the Middle East from Delta Partners:


•Already today, the largest global players are seen to operate in a maximum of 30 to 40 countries around the world

•The total estimated cash available for M&A activity by the top 5 Global Titans in the next two years is close to $170 Billion.

•China holds the largest industry players in terms of subscribers, with over 200 million subscribers, and still growing aggressively. China Mobile is expected to build up a war chest of close to $100 billion in the next years, putting it in a position to buy anyone anywhere.

•As penetration grows, global annual subscriber growth rate is slowing down, reaching 6% in 2010 - requiring operators to look for alternative sources of growth and concentrate on emerging markets.

•Many regional players are cash-rich and scouting for opportunities. Even local players like STC with current cash availability of over $20 billion could be a player making very aggressive acquisitions and totally change their profile overnight in and beyond the region.