Emerging Market Telcos
In 10 years’ time the mobile cellular ownership landscape could look very different from today, where telcos from Emerging Markets such as China, India and Indonesia, extend their clout beyond their continental boundaries and invest/purchase telcos, not just in other Emerging Markets, but also Developed markets.
Could it be that Emerging Market telcos, sustained by the strong growth in their underlying economies, burgeoning middle class with disposable income to spend, purchase stakes in Developed market telcos with strong cash-flow but constrained growth prospects? Many Developed Market telcos will have market capitalizations that are eclipsed by telcos from Emerging Markets.
Impossible? We just have to look to other very mature industrial sectors such as the automotive industry. Shanghai Automotive Industry Corp. (China) owns Rover, Nanjing Automotive (Group) Corp. (China) owns MG, while Jaguar is owned by Tata Motors (india). Other examples can be found in the steel industry.
Certainly those Developed Market telcos that have secured Emerging Market assets may be able to ride out the changing landscape, although some of their Developed Market Assets are currently looking very poorly (ABI Insight: Vodafone Group – Should It Dispose of Europe or Verizon Wireless? ). Just look at the last 10 years to see how much the telecoms world has changed.