Stock market: why investing in telecommunications companies is very profitable?

The telecommunications sector is progressing quite rapidly in industrialised countries. This rapid development of the sector began in the mid-1990s. The increasing supply and also the constant demand for telecommunication services characterise the current picture of the sector. The power of technology is not to be overlooked either. Discover here the factors explaining this phenomenon.

The total added value of telecommunications: the share of turnover

Industrialised countries are experiencing increased liberalisation in their telecommunications markets. This has obviously reinforced the innovations and appearances of new telecommunications services whose prices are increasingly competitive on the market. This is the case of verizon stock, which is making its presence felt in this market. With such rapid expansion of telecom services, investors were quick to anticipate profit growth. This was a feat never before achieved. The excessive and irrational production shown by investors in the market capitalisation in Germany, France and the UK. This is a huge multiplication due to the excessive desires of over-optimistic investors.

Competition in the telecommunications market

The liberalisation of the telecommunications market has left an opening to competition. This competition entered the United States and Europe just at the beginning of 1998. This market, which is becoming more and more monopolised, has not escaped inflation in telecom values. Being generated because of the race for customers, competition has caused a war of competitiveness and technological capacity between powers (the operators). This has greatly contributed to the rise in stock prices. On the other hand, others had rather advantageous financial situations. These are the so-called historical operators who saw their privatisations coincide with the liberalisation of this telecommunications market.