With companies and consumers depending on better mobile coverage, faster speeds and increasing digitization during the pandemic, the telecom sector is in investment mode – with the 5G rollout and new enterprise-focused applications expected to drive growth. However, analysts say companies may face a few challenges, such as rising inflation, in the short-term.
“There is a little bit of push and pull on the [plans to] invest for future growth – just how quickly do you invest and how much growth are you able to generate in the near term,” Mr. Rattee says. Mr. Harris believes that mergers and acquisitions activity may be a driver for the sector in Europe over the next year or two. But it’s a trend he doesn’t expect to see happening as much in North America because there are fewer service providers.
Difficulties facing the sector include inflation-related cost pressures and rising interest rates which could put pressure on stock prices, Mr. Harris says.A number of new players have also entered this sector, with plans to bring high-speed internet to rural areas via low-Earth orbit satellite, including Elon Musk’s SpaceX’s Starlink satellite network and Canadian companies Telesat and Kepler Communications Inc.
“Everything from how you deliver services to your employees to how you serve customers and the relevance of technology in future operations has become that much more important,” he says.