Herbert Blum

The halls of the GSMA’s Mobile World Congress in Barcelona were less crowded this year. Last-minute cancellations, particularly from participants in or transiting through the Middle East amid armed conflict, were a somber reminder that we are navigating a turbulent time. Our thoughts are with those affected. Even so, the communications ecosystem showed up with energy and resolve. As the world grapples with geopolitical instability, the telecom industry continues to face its own turbulence.

It’s hard to imagine a business overlooking or underinvesting in a market that has about 400 million potential customers worldwide, an 8% annual revenue growth rate, wide profit margins, and relatively manageable service costs. And yet, that’s the case for many telecommunications companies when it comes to their small- and medium-sized business customers. It’s a big opportunity.

This article is part of Bain's 2024 M&A Report. The story of telecommunications mergers and acquisitions in 2023 was defined more by the deals that didn’t happen than the ones that did. The industry’s deal value declined by about 39% during the first three quarters of last year, the second consecutive down year after strong growth in 2021. Much of the newsworthy activity took place in Europe.