In a move that illustrates the changes in the “communications” business, the telecommunications segment of the Standard and Poors 500 index will be recreated, including advertising, broadcasting, publishing, movie and entertainment as well as app firms supplying entertainment.
The change will happen in September 2018, with the firms to be added to the index announced in January 2018.
Several developments drive the change. First, the universe of U.S. telecom firms had essentially dwindled to just AT&T, Verizon and CenturyLink.
Also, the changes will add numerous higher-growth segments to the indices, which have been low-growth and therefore relatively less attractive to investors.
Some might also say the changes also reflect the importance of media, content and video businesses to the “telecom” industry. Those revenue sources are important, for a growing number of tier-one service providers, to add new revenue drivers with higher margins, to fuel revenue growth and replace lost voice and messaging revenues.
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