88th International Atlantic Economic Conference
October 17 - 20, 2019 | Miami, USA

Valuation and comparison of markets - sector of new technologies

Saturday, 19 October 2019: 9:40 AM
Pawel Kossecki, Ph.D. , Film Production, National Film School in Łódź, Lodz, Poland
The telecommunication market has undergone tremendous changes, mainly due to the introduction of new technologies. Telecommunication companies now attract their subscribers, not only with traditional telecommunication services, but also with high-speed Internet access and attractive television content offered at very competitive prices. Their competition includes not only telecomms, but also cable operators and video on demand services. The sector was closely examined by private equity investors. Strong competition is due to the development of satellite platforms, traditional telecoms, as well as cable operators. Many companies grew mainly due to the acquisitions.

Telecommunication companies should be considered as companies using the so-called subscription-based business model, where the customer pays a fixed subscription fee for access to a product or service. The level of monthly average revenues per user (ARPU) from basic service is rather low in most of the European countries. Among the countries in Europe, there is a large dispersion in ARPU per client and amount of delivered services.

A common problem in the valuation of telecommunication companies is finding comparable data and markets for valuation. The objective of the investigations presented in this paper is recognition and classification of similarities and differences among European countries related to the telecommunication market. For this purpose, taxonomic measures, especially multivariate comparative statistical analysis methods were used. The author presented a model for comparison of the markets based on cluster analysis. The study covers selected European markets. These methods can be used for comparing markets in cases of enterprise valuations in the telecommunication sector and by level of development.