Telecommunications in the Midst of Two Crises: 2008-2020

Abstract

This research deals with a pervasive general purpose technology and an economic resource of huge value founded on innovation, subject to rapid changes and obsolescence, a capital-intensive industry and high-revenue industry. The study addresses from a general and company perspective the impact on the telecommunications of the shock hitting the world economy with exceptional virulence, size and extent unseen in the last eight decades. The text consists of three main sections which analyses a broad issue -telecommunications in the world- and two specific points -the companies' response to the crisis and one particular path, namely, mergers and acquisitions. It is built on different sources from major institutions and big companies. The 2008 global financial crisis adversely hit mergers and acquisitions, causing a sharp decline in these markets, which did not recover before 2014. Nevertheless, after the downturn, the emerging market countries benefited from the attractive asset prices in advanced countries and expanded their acquisitions abroad. This research contributes to general knowledge that telecommunication sector faces both common and industry risk factors. The analysis at companies’ level finds the importance of specific factors derived from the nature of the companies in question, independent of specific shocks.