TMT World Congress 2024: Dealmaking, AI, and market consolidation 

TMT World Congress 2024, sponsored by AlixPartners, brought together 500 industry leaders in London earlier this month, for two days of discussions centred on deals, financing and investment in digital infrastructure and connectivity.  

With financial conditions stabilising, industry leaders are optimistic about the dealmaking outlook for 2024. 80% of attendees who were polled at the Congress said they expected dealmaking conditions to be slightly or significantly better than in 2023.  

AI remains front of mind 

AI was a talking point throughout the Congress, with speakers and attendees in agreement on the significant opportunity for AI to optimise telco networks and transform digital infrastructure. 25% of attendees polled at the event said they are actively investing in AI, while 54% are waiting for more data before doing so. Some speakers shared the sentiment that the major investment opportunity for the sector to harness AI is still a few years away. 

Tim Roberts, AlixPartners Partner and Managing Director, delivered a keynote on how AI will alter operations and M&A, recommending that leaders focus on only a few select areas where AI can drive real value – such as in customer personalisation, network monitoring, and resource optimisation – while ensuring they embed safety, security and privacy from the design stage onwards. AlixPartners’ 2024 Disruption Index, its 5th annual survey of 3,000 C-level executives around the world, found that nearly two-thirds of CEOs say their company cannot keep up with the current pace of technological change, and about the same proportion say AI is the most disruptive force they are dealing with. However, only a quarter of executives surveyed say AI is embedded in their workflows today. 

AlixPartners Partner and Managing Director Catherine Brien led a panel with speakers from Virgin Media O2, euNetworks, DigitalBridge and Neos Networks, on how AI is impacting telecoms. Panellists discussed several use cases that are taking hold, the subsequent demand on infrastructure – for greater storage, compute, and power – and therefore for investment. Power is fast becoming a critical factor, driving the locations of new data centres and their link with sustainable energy sources.          

Consolidation in the UK and European fibre markets  

Consolidation of the UK fibre market is still seen as inevitable, and viewed by some as imminent. AlixPartners Partner Stuart Cockburn opened the second day of the Congress, moderating a panel with leaders from several leading European FibreCos – speakers from TIM, CityFibre, Openreach, and Eurofiber – exploring the risks and opportunities for new investment. Panellists discussed the likelihood that the UK will eventually see three national incumbents: Openreach, Virgin Media O2, and a third national player comprising a merger of smaller UK altnets. CityFibre CEO Greg Mesch confirmed that the company is actively exploring M&A opportunities as an alternative to building additional footprint. 

M&A is also anticipated in the wider European fibre market, and identifying potential targets is a primary focus for acquisitive players for the year ahead. While last year’s challenging macroeconomic outlook spread uncertainty in the market, the sector is now seeing landmark deals such as TIM’s fibre NetCo carve-out in Italy, and its subsequent sale of NetCo to KKR. TIM’s Chief Network Operations and Wholesale Officer Elisabetta Romano shared further insight into the deal, providing a contrasting viewpoint to market developments in the UK. Whether in the UK, Italy, or other European markets, there was consensus that a clear strategy, and the adaptability to execute it, will be essential.  

Overall, while the industry faces several challenges, Congress attendees shared optimism for the year ahead. With financial conditions stabilising, emerging technologies, the prospect of further market consolidation and soaring demand, there are significant opportunities for operators, investors and lenders to harness.