Judging by telco executives’ M&A intentions, network operators are feeling increasingly acquisitive.

Results from EY’s most recent Global Capital Confidence Barometer, which includes an annual survey of M&A sentiment across industries, shows that 55% of telecommunications industry respondents expect to pursue acquisitions in the next 12 months, up from 45% on average in the past few years. However, one thing seems clear from the high-level conclusions: the idea of consolidating operators in the market appears low on the list of priorities. Rather, carriers seem to be looking to flesh out their service portfolios by acquiring companies in adjacent industries (most likely gaming, entertainment, and IoT).

Five years ago, things looked different. European Commissioner for the Digital Agenda Neelie Kroes and her predecessor Viviane Reding had consistently suggested that the EU had too many telecoms groups and that the resulting fragmentation slowed innovation and kept costs high.

The rest of the world – parts of which take their telecoms regulatory cues from the EU – seemed to be waiting for a similar consolidation. Instead, as the market matured and customers gravitated to multiplay bundles, there was a wave of mobile players buying fixed and cable networks, both to be able to connect their towers and to make sure that that they could provide their customers fixed broadband and entertainment content.

That process is reaching its conclusion, and telcos’ M&A focus is clearly changing. Not surprisingly, the primary M&A focus for the next several years is likely to be 5G. The new technology generation promises to shake up the market by enabling a myriad of new services and partner relationships. Especially on the enterprise side, 5G will eventually underpin capabilities that never existed before. As a result, telcos are concentrating on transforming their product portfolio and service capabilities to take advantage of 5G performance, rather than trying to buy out direct competition.

Unsurprisingly, then, the top M&A motivation reported by telco execs was access to new talent and technology. Telcos know that they need more IT and data science talent, but also that they need to adopt the more agile ways of working that have led web economy players to dominate the market. This is a tricky proposition: telco culture is generally strongly conservative, so there are few examples of an acquired team driving overall re-skilling and culture change. Rather, telcos seem to get more of their training, process change, and cultural help from their main vendor partners. They would be well advised to look at their ecosystem for transformation help before assuming that buying another company will do the trick.

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