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K N OW Y O U R VA L U E P R O P O S I T I O N A N D WO R T H
Knowing telecoms’ acquisition strategies andongoing business goals is a starting point for formulating your plan and goals for acquisition negotiations. Knowing your value proposition — and what your company is likelyworth—bareother cornerstones of the process.
synergies, efficiencies, and new opportunities your services and solutions create for your acquirer. A good yardstick to help determine your company’s worth is looking at previous similar deals. However, it is essential to note that each negotiation process and situation is different. This is doubly true for the current situation where generating accurate valuations, which are often based on future projections, has become very challenging. Identifying your value proposition and setting a realistic target may require outside assistance. Allying yourself with M&A and industry experts will also increase your ability to discern telecoms’ negotiation tactics from real areas of concern.
Defining how your services and solutions fit within that framework and augment a telecom’s current portfolio will help make your company as appealing as possible and provides valuable arguments for the negotiation process. While it may sound simple, a clearly defined value proposition includes analysis of many different business areas. Your current services and products, ongoing R&D, legal situation, intellectual property rights, employee contracts, potential claims and liabilities, third-party reliance for services, cash-flow, warranties, compliance, and tax issues are just part of this non-exhaustive list. Furthermore, each list section has many sub-parts. Your value calculation should also include projections of future earnings and growth potential, and what
Understanding why your capabilities are of strategic and tactical value to the telecoms company also forms part of the foundation of setting realistic targets for the negotiation process. The first step is finding answers to questions like how your products or services can solve telecoms’ current challenges and realise their long-term goals. That, in turn, requires knowing what changes Covid-19 may have meant for short- and long-term strategies in the telecoms industry. The Internet of Things, AI, robotics, smart cities, and driverless cars are all likely going to rely heavily on high-speed networks provided by telecoms. Even before the global pandemic, telecoms were also aiming to be much more than ‘just’ providers of communication infrastructure, pursuing growth and new revenue streams across adjacent industries.
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