One way of looking at the traditional telecom segment of the total public market is that it is, in some ways, too small to constitute a “sector” in its own right, like transportation, industrials or health care, especially when considered on a “single country” basis.
Consider the U.S. market, which essentially consists of AT&T, Verizon, CenturyLink, T-Mobile US, Sprint, and a handful of other firms with significant market capitalization.
Some funds include a wider basket of companies, on a weighted basis. But most of the market value is driven by a handful of firms. Verizon, for example, has a market cap of about $177 billion. AT&T has a market cap of about $223 billion.
CenturyLink has a market cap of about $13 billion. Sprint is worth perhaps $35 billion. T-Mobile US is worth about $50 billion.
Comcast is valued at about $186 billion, but the access business is valued at perhaps 61 percent of that, or perhaps $113 billion. Charter is worth about $92 billion.
The point is that including fixed network, mobile and cable TV providers as a single market, nearly all the market capitalization is held by seven firms.
Going forward, we might expect not only further consolidation, but also a shift in revenue towards “applications” revenue (video entertainment networks, studios and enterprise apps related to internet of things). At least for the moment, it does not seem that truly-significant additional market cap will be generated by cloud computing or hosting, devices.
Equity analysts often follow a larger basket of firms and industries called “telecommunications, media and technology.” That might not only offer enough diversification to create a more-stable “segment,” but also likely represents the future of the former “access” segment as well.
Provider
|
Market Cap
|
AT&T Inc.
|
223.049B
|
Verizon Communications Inc.
|
177.796B
|
CenturyLink, Inc.
|
12.577B
|
Shenandoah Telecommunications Company
|
1.421B
|
Consolidated Communications Holdings, Inc.
|
0.9B
|
Frontier Communications Corporation
|
1.1B
|
Cincinnati Bell Inc.
|
0.7B
|
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