Merger control in the telecom industry: a landscape transformed

摘要

Convergence in telecommunications and the accompanying regulatory changes prompted a wave of mergers and acquisitions (M&As) in the sector. Companies introduced devices to perform multiple functions that previously required several devices, a development termed convergence by industry commentators. Smart phones, for example, can be used to communicate, for internet access and for watching programmes, as just a few options. The first wave of mergers occurred in the 1990s and the second in the early 2000s. The third wave, which is occurring at the present time, is the result of three developments: convergence, deregulation and over-the-top (OTT) services such as Netflix and Amazon Prime. The rapid rise of the OTT services has resonated its way into strategy and business model innovation, leading incumbent traditional media companies to reconsider their strategic assessment of the market. The recent merger between AT&T and Time Warner and the transformed business model of the merged entity, for instance, is a direct consequence of this transforming landscape where the "spray and pray approach" of the traditional pay-TV operators seems completely misplaced against the "digital, big data-led" algorithmic approach of the OTTs.