Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Telecoms Outlook 2021

Published 01/31/2021, 08:00 AM
Updated 06/16/2021, 07:30 AM

COVID-19 has had limited impact on most telecom companies' operational performances and balance sheet strength thus far, but still, we expect 2021 to be another year of low-single-digit growth for the sector. In this Outlook, we identify key themes to watch in 2021 and beyond

Executive summary

Telecom companies have been incredibly strategically important to keep economies and societies going during the pandemic and Covid-19 lockdowns.

Working from home, homeschooling and streaming entertainment services have resulted in a substantial rise in data usage on fixed networks in 2020.

Covid-19 has had limited impact on most telecom companies' operational performances and balance sheet strength thus far. Areas affected include lower roaming fees due to travel restrictions and a decline in handset sales due to store closures.

We expect 2021 will be another year of slow growth. Service revenues are expected to show some recovery during the year as travel recovers. Our base case scenario for the sector is a flat full-year revenue performance. Ongoing cost-saving programs further support the EBITDA result, and we expect low-single-digit growth for the sector.

In this report, we identify key themes to watch in 2021 and beyond

  • Accelerated fibre rollout to make fixed networks future proof will continue to be an essential topic as there is still a large difference in coverage between European countries. We believe companies will adopt the best practices learned during the pandemic, including working more structurally from home, supporting demand for reliable high-speed internet, including fibre-to-the-home and DOCSIS 3.1 from cable companies.
  • Telecom companies will continue to explore the possibilities of mobile tower and network monetisation to unlock value. The IPO of Vodafone (NASDAQ:VOD) VOD's Vantage Towers is planned for early 2021.
  • We expect M&A to continue to be a theme this year following the General Court of the European Union's decision to annul the E.C.'s decision to block Telefónica's acquisition O2 U.K. by Hutchison and we could see renewed attempts for in-market consolidation in highly competitive markets.
  • After the commercial launch of 5G for consumers, the focus will shift to 5G for industrial purposes (IoT). The resulting expected strong data growth requires telecom operators to expand coverage, and further densify their mobile networks. In this transition to a connected Gigabit society, cybersecurity will become increasingly important.

Content Disclaimer: The information in the publication is not an investment recommendation and it is not an investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. This publication has been prepared by ING solely for information purposes without regard to any particular user's investment objectives, financial situation, or means. Read more

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.