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Global 100 2014: In the Red Zone
Source: totaltele.com
Source Date: Friday, October 24, 2014
Focus: ICT for MDGs
Created: Oct 27, 2014

It's America one and two as, for the first time in seven years, we have a major change at the top of the Global 100. Based on the most recent year's financial results, Verizon is now the second-largest telecoms operator in the world by revenues, pushing NTT–once the world leader–down into third place.

Verizon has held second place before, albeit briefly, in the 2006 Global 100 report, when NTT was top of the pile. "This could be the last year for some time that Japan's national operator holds the title. Next year, Verizon Communications could be carrying the crown of the biggest telecoms operator in the world," Total Telecom predicted at the time. We were correct in the first half of that forecast, but not the second: AT&T took the top spot in the 2007 report and has stayed there ever since. Meanwhile, Verizon dropped to number three and stayed firmly planted there. But by the 2013 edition the writing really was on the wall: "Verizon…is mounting a credible challenge for second spot," we said.

Indeed, Verizon was less than €1 billion behind NTT in revenues last year. Both companies saw their revenues fall in euro terms this year due to exchange rate effects, but in reporting currency Verizon grew its turnover by 4.1% compared with NTT’s 2.1%.

The US operator can attribute its rise to its strength in mobile. Verizon Wireless accounted for $81 billion or 67% of the operator's revenues in the most recent financial year–up from 65% the previous year–its turnover increasing by 6.8%. By contrast, its global enterprise business shrank by 3.9%, pulling down overall wireline revenues. Arch-rival AT&T generates a smaller percentage of its revenues from mobile–54% in the most recent year–but it too is relying on that side of the business for growth. The telco reported a 4.7% increase in turnover from its wireless operations, compared with a 1.3% decline in wireline.

With overall revenue growth of 1% in own currency terms, AT&T retains its position at the head of the Global 100, but if Verizon can maintain the 4%-plus growth rate it has recorded in recent years, the top dog could be feeling the pressure. Verizon added US$4.70 billion to its revenues last year, compared to AT&T's $1.32 billion, and is $8.20 billion behind.

That said, AT&T has embraced M&A in recent months and that could be its saving grace.

(By Mary Lennighan)
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