Convergence, consolidation in US, Global broadband markets
Tom Paine
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Convergence. That's the word to describe today's broadband market, as distinctions between traditional telcos, cable systems, and to some extent wireless carriers (as mobile speeds increase) diminish. Cross-border and trans-oceanic barriers are becoming less important as well.
If the proposed Comcast-Time Warner Cable merger is ultimately approved, the US broadband market will consist of three giants surrounded by minnows. But don't forget Google, Apple, Microsoft, and Facebook, which all have their own designs on slices of the market. And there may be other emerging competitors we can't even recognize today. Middlemen, including fiber networks and content delivery networks (CDNs) such as Akamai, are also important players.
Market value is not the sole indication of strength, although it does give one a general idea of who might have the upper hand in future consolidation. Of course, the figures in
the table below include only equity values, not debt loads, which can be very significant in the broadband industry.
Verizon just completed the acquisition of the rest of Verizon Wireless from Vodafone
this past week. And Vodafone will pay out $82.5 billion to its shareholders, cutting
its market value to about $100 billion. There has been speculation that AT&T might be
considering a bid for Vodafone.
The combined Comcast/TWC market value is shown as being the simple sum of the two's current market values, as it is a straight stock transaction. However, several factors could move the value up or down.
Link to chart
Source: Philly Tech News, based on closing prices as of 2/21/2014 (Price quotes from Google Finance)
