From the newsletter: As telcos rethink growth strategies, contrasting moves by Rocket Lab, Comcast, BT and Verizon highlight a common goal: using acquisitions, divestments, and selective consolidation to sharpen focus, improve capital allocation and strengthen investor narratives.
How do you make sense of acquisition and separation narratives in the same market – as with Rocket Lab’s proposed $8bn acquisition of Iridium and Comcast’s planned split of NBCUniversal and Sky? Probably by looking at the different segments – satellite comms and terrestrial comms, plus some extra-curricular media stuff. And also considering that integration according to the old telco playbook, from 20 years ago, was more about horizontal M&A, rather than vertical M&A.
So Comcast’s slimming down is about focus in the traditional terrestrial telecoms market, and Rocket Lab’s fattening-up is about leverage in the new space-comms frontier. Either way, whether through integration or separation, the aim is to sharpen investor narratives and capital allocation, of course. We might view yesterday’s proposed mega (the term is relative) merger of BT’s and Verizon’s international divisions through the same kind of lens: selective mutual consolidation of troublesome legacy comms units, and a way to slim down to sharpen up.
