Telecom/media consolidation: Hold on to your seat!

Get ready for the next wave of big telecom and media
consolidation.  Not just the normal accretion deals, but the
potential game changers.  AOL/Time Warner and Comcast/AT&T
Broadband were among the highlights the last merger wave. 

Yesterday, the Wall Street Journal reported that Vodaphone was
considering a bid for Verizon, as a way to take control of Verizon
Wireless.  That deal likely won’t happen — expect Vodaphone to
unwind its interest in Verizon Wireless in connection with a purchase
of AT&T Wireless — but when a >$150 billion company like
Verizon is in play, watch out. 

The next shoe dropped today: Comcast is proposing to acquire Disney
There is logic to the deal, though it’s 1980s logic: combine content
and conduit at scale to squeeze more profits from the entertainment
bundle.  That’s not going to work in the emerging broadband media
ecosystem, where platforms, applications, and content are different
layers of the stack.  Comcast-Disney would also have the same
challenge as AOL-Time Warner: a national content footprint mismatched
with a regional broadband infrastructure footprint.  Nonetheless,
it’s striking that Comcast, so soon after digesting AT&T broadband
to become the largest cable operator, is ready to return to the merger
trough. 

This won’t be the last huge deal proposed in the current wave.  Everyone is in play.