CHICAGO, Sept. 12, 2014 /PRNewswire/ -- Today, Zacks Equity Research discusses the Telecom, including Verizon Communications Inc. (NYSE:VZ-Free Report), Vodafone Group plc. (Nasdaq:VOD-Free Report), Time Warner Cable Inc. (NYSE:TWC-Free Report) and Sprint Corp. (NYSE:S-Free Report).
Industry: Telecom
Link: http://www.zacks.com/commentary/34354/in-telecom-wireless-still-the-key
A major intra-industry shift has recently taken place in the high-speed Internet (Broadband) market. For the first time in the 65-year long history of the cable TV industry, broadband customer count surpassed the TV viewers count. According to a recent report by the Leichtman Research Group Inc. (LRG), the top nine cable TV operators accounted for a total of 49.915 million broadband subscribers as against 49.91 million video subscribers, at the end of second-quarter 2014.
LRG further reported that there were approximately 85.9 million high-speed data subscribers at the end of the last quarter. Out of this, cable TV operators command around 50.7 million customers (59%) and the remaining 35.2 million (41%) customers belong to telecom operators.
Mergers and Acquisitions to Continue
The U.S. telecom industry is likely to witness more mergers and acquisitions going forward. Owing to the rising demand for scarce and valuable wireless spectrum, mergers and acquisitions have increased exponentially. While established players need more spectrums to gain competitiveness, small players prefer to collaborate with strong rivals rather than trying to establish a nationwide foothold, which is extremely capital intensive.
Verizon Communications Inc.'s (NYSE:VZ-Free Report) takeover of the remaining 45% stake of Verizon Wireless from Vodafone Group plc. (Nasdaq:VOD-Free Report) for $130 billion marks the largest acquisition of the wireless industry. In Feb 2014, Comcast reached an agreement with Time Warner Cable Inc. (NYSE:TWC-Free Report) to acquire the latter in an all-stock deal valued at around $45.3 billion. Softbank of Japan acquired a 78% stake in Sprint Corp. (NYSE:S-Free Report) for $21.6 billion.
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