Restructuring in Telecommunications and its Market Impacts: An Event-Study Analysis

This study presents an assessment of the changes in the telecommunications industry and their impact on market returns. Events were identified from a sample of global telecom companies and assessed in terms of their favorable or unfavorable impacts. Based on event-study analysis with generalized autoregressive conditionally heteroskedastic specification, the impact was tested after incorporating dummy variables of different lengths. The results show interesting patterns in how the market views restructuring in the business model of telecom companies, organizational structure, alliances and mergers, and technological platform changes. Countries differ in how they view telecoms restructuring and what changes are considered beneficial by investors.