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Analysis

Technology, media, and telecommunications M&A update: Q1 2020

TMT Industry is seeing a boost in the sales of audio books and podcasts and the increased use of digital payments app among the consumers. Also, enterprises may opt for private 5G networks, which offer enhanced customization for specialized work locations, speed from keeping data on site and reducing latency, and security. This technology, media, and telecommunications (TMT) mergers and acquisitions (M&A) update provides Deloitte Corporate Finance LLC market data analysis that shed light on M&A trends in the TMT industry.

TMT trends

  • Stay-at-home technology:1 Application software companies are providing imperative services to help keep productivity from declining as the COVID-19 situation has impacted the vast majority of businesses. Video conferencing, task/project management, and remote desktop applications have been integral to helping businesses remain proactive in a remote work environment.
  • Private 5G networks:2 In the coming years, enterprises—especially industrial companies—may opt for private 5G networks, which offer enhanced customization for specialized work locations, speed from keeping data on site and reducing latency, and security. The value of cellular mobile equipment and services utilized by private networks is expected to reach tens of billions in value by 2024.
  • The rise of audiobooks and podcasts:2,4 Recently, more listeners have been utilizing audiobooks and podcasts for entertainment and news. This trend is expected to continue, as audiobook sales look to grow 25 percent from last year’s total, reaching an estimated $3.5 billion in sales. Initially, the global podcast market was expected to increase 30 percent to $1.1 billion in size. However, 75 percent of podcasting revenue comes from ads, and total advertising spending is down this year, thus limiting total revenue.
  • Digital wallets:3,4 In 2019, the value of digital transactions globally reached US$4.1 trillion. According to a 2019 Deloitte survey, nearly four out of five surveyed respondents have used a digital payments app at least once last year. This is not surprising given that 78 percent of consumers globally have shopped from their mobile phones in the last six months, according to a recent study.

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References

1CNBC, Zoom has added more videoconferencing users this year than in all of 2019 thanks to coronavirus
https://www.cnbc.com/2020/02/26/zoom-has-added-more-users-so-far-this-year-than-in-2019-bernstein.html, accessed April 10, 2020.
2Deloitte, Technology, Media, and Telecommunications Predictions 2020, https://www2.deloitte.com/content/dam/insights/us/articles/722835_tmt-predictions-2020/DI_TMT-Prediction-2020.pdf, accessed April 9, 2020.
3Deloitte, Getting ahead of the curve, https://www2.deloitte.com/us/en/insights/industry/financial-services/consumer-payment-survey.html, accessed May 4, 2020.
4Deloitte, TMT Predictions 2020: How has COVID-19 changed expectations? https://www2.deloitte.com/content/dam/insights/us/articles/722835_tmt-predictions 2020/TMTPredictions2020_COVID19update.pdf, accessed May 4, 2020.

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