The companies that connect our phones and computers are often portrayed as staid behemoths that only wish to maintain the status quo. They can seem unassailable: protected from competition by their expensive infrastructure, exclusive licences and network effects. Their apparent inertia makes the telecoms industry an enticing target for disruptive newcomers. Yet the incumbents haven't been toppled so easily. So far they have maintained their advantage - through innovation, iteration and above all acquisitions.
Global telecom tie-ups have come thick and fast this year, as companies have sought to enter high-growth territories, develop 'quad-play' portfolios of TV, broadband, mobile and fixed-line telephony, and scale up to meet surging demand for data and superfast '4G' broadband. The latest example is BT (BT.A) entering into exclusive negotiations to acquire mobile-phone operator EE, a joint venture between Orange (Fr: ORA) and Deutsche Telekom (Ge: DTE), after initially weighing a takeover of O2, owned by Telefónica (Sp: TEF). The move surprised investors, as the privatised UK telecoms titan had planned to launch its own offering in the domestic mobile market - which it exited in 2005 with the sale of Cellnet, an earlier iteration of O2 - early next year.