2016: A Big Year for Telecom M&A

2016 was a big year for telecommunications mergers and acquisitions. Telecompetitor covered more than two dozen mergers and acquisitions in 2016 and they involved numerous facets of the industry. Here’s a summary of key trends and how they are reshaping the communications service provider playing field:

The biggest changes occurred in the cable industry, where the desire to obtain increased scale spurred a mega-merger that brought three of the nation’s largest cable providers into a single entity. The operations of Charter, Time Warner Cable and Bright House are now combined into a single entity under the Charter name, and they are the number three video provider in the market (behind AT&T/DirecTV and Comcast).
France-based Altice also has been acquiring cable properties in the US. In 2016, it acquired Cablevision after previously acquiring Suddenlink.
After purchasing DirecTV in 2015, AT&T is now pursuing the acquisition of Time Warner with the goal of acquiring content to support its video and other media offerings.
Verizon made plans to acquire XO Communications in order to obtain the competitive carrier’s spectrum licenses, which Verizon plans to use to support 5G wireless service.
Meanwhile, CenturyLink’s 2016 acquisition strategy was focused on gaining scale in the enterprise market. The company’s plan to acquire Level 3 Communications, announced in October, will make the combined company number two in the enterprise market, behind AT&T.
Although not known primarily as a communications provider, Google entered that market when it began deploying its gigabit fiber-to-the-home service in select markets several years ago. Google’s acquisition of wireless Internet service provider WebPass, completed in October, indicated the Internet giant is still interested in the service provider market, but that it is likely to shift toward a broadband wireless strategy.