Telecom Industry Report

October 2, 2014

October 2, 2014

TELECOM SECTOR

Sector report

Nancy Underwood Cox Endowment Fund MBA Portfolio Practicum

TELECOM SECTOR

Sector report

Nancy Underwood Cox Endowment Fund MBA Portfolio Practicum

Analyst:

Anamika Kumar

anamika@smu.edu

Analyst:

Anamika Kumar

anamika@smu.edu

Executive Summary:

Telecom sector report, analyzes the global telecom industry (focus on North America) to review the industry as a whole, provide description and analysis of the sub sectors , the opportunities in the space, the most important metrics and the drivers .We also review our current positions in this space in the MBA portfolio and provide insights on sector weightage.

The outlook on global Telecom industry looks relatively negative due to increasing competition in the industry, large capex requirements and the ongoing consolidation in the industry which makes the industry less predictable. Having said that, increasing wireless data, smartphone and tablet usage are positives for the industry, which can be a growth story which provides additional incentives for staying in this stable defensive sector.

Sector Description:

No other industry touches as many technology-related business sectors as telecommunications, which, by definition, encompasses not only the traditional areas of local and long-distance telephone service, but also advanced technology-based services including wireless communications, the Internet, fiber-optics and satellites. Telecom operators globally generated approximately $2 trillion in revenues in 2013. This is a slight improvement from $1.9 trillion revenues recorded in 2012. While the telecom growth momentum is expected to be maintained in the U.S. over the near term, the major impetus is likely to come from emerging markets of China, India, Brazil and Russia which still have opportunities for growth compared to US , which is a highly saturated market....