The world is being eaten by smartphones made by
The U.S. again holds the crown of the telecommunications industry. After years of playing second fiddle to booming
With $163 billion in annual sales, AT&T is now the world’s biggest telecom company, having recently acquired satellite TV provider DirecTV and several smaller wireless outfits. In 2016, AT&T sales rose 11% and Dallas-based company added nearly 3 million wireless subscribers in the fourth quarter alone. Its bottom line fared even better, generating a 19% rise in operating income for the year and $16.9 billion in free cash flow.
It was a different story for competitor Verizon, which saw overall sales fall 4.3% to $126 billion and profits drop by a quarter to $13.6 billion. The New York-based telecom suffered from a change in its subsidies for iPhones and chose to forego some profits by embarking on investments including the build out of its 5G capabilities and its acquisition of media assets such as AOL and Yahoo, building a vertical presence. Still a leader in profitability, Verizon added 2.3 million wireless customers in 2016.
In third, China Mobile generated flat revenues of $106 billion and profits rose slightly to $17 billion during the year, a slowing of growth from prior years. Up and comers in the telecom world are tied to the booming U.S. market. SoftBank, owner of Sprint, now ranks #5 on the Forbes Global 2000 for telecoms and it gains market share in North America. Its rumored M&A partner
What’s next in the telecom race? More of the same.
Carriers around the world are in a consolidation push, seeking to growth their subscriber bases through improved service and new features such as 5G. It’s likely a zero-sum game, with power concentrating to the industry’s top players. As talk heats up on a Sprint/T-Mobile combination, expect mega carriers to continue plowing their cash into acquisitions.
The FORBES Global 2000 is an annual ranking of the world’s largest, most powerful public companies, based on equally-weighted measures of revenue, profits, assets and market value. The world's 25 biggest telecom companies hail from 17 countries. Collectively, they generated $1.2 trillion in revenues in 2016 and $88 billion in profits. Their combined market cap is $1.6 billion.
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