What is the 'Technology, Media, and Telecom (TMT) Sector'

The technology, media, and telecom (TMT) sector, sometimes also referred to as technology, media, and communications (TMC), is an industry sector used by investment bankers, investors, traders and other market participants. Because this industry segment covers a broad range, it is often useful to break down TMT into sub-sectors such as semiconductors, hardware, software, mobile, Internet, networking, etc. Because this sector contains new and high-tech firms, it experiences a large amount of mergers, acquisitions and initial public offerings (IPOs).

BREAKING DOWN 'Technology, Media, and Telecom (TMT) Sector'

The technology, media and telecom sector includes a wide range of companies, but they are interrelated in that they heavily depend on research & development (R&D), the value of patents and other intellectual property protections, and preferring rapid company growth. As a result, valuation of companies in this industry segment may tolerate relatively high price to earnings (P/E) ratios in favor of enterprise value to sales (EV/Sales). 

Within the TMT sector it is useful to subdivide it into relevant sub-sectors. Semiconductor manufacturers develop and produce integrated circuits and microchips used in all sorts of applications from personal computers and mobile devices to robotics and industrial machinery. Some representative firms are Intel, AMD, Texas Instruments and Nvidia. 

Telecom focus on communications-related businesses such as phone, TV and Internet service providers and include players such as AT&T, Verizon, and Sprint. 

Hardware includes computer makers (IBM, DELL, HPQ), but also makers of server systems, mobile device handsets, tablets and storage devices such as hard drives and memory. 

Internet companies exist online and include companies like Facebook, Groupon, LinkedIn and Zynga. 

Software companies produce computer or mobile applications for both individuals and enterprise and include Microsoft, Adobe, and SAP. 

Networking companies maintain, install, and produce components for wired and wireless computer networks including fiber optic cable, switches and routers. Some big players in the networking space include Cisco Systems, Juniper Networks, Netgear and Ciena Corporation. 

Media companies develop, produce and distribute multimedia content on TV, radio, in print and online. Television networks, cable TV providers, production studios and social media companies may all be included in this sub-sector.

Different market participants may categorize different TMT companies in different sub-sectors. Facebook may be viewed as either Internet or media, and Apple as Internet, hardware, software and media depending on who is judging the company. Other examples that cross sub-sectors are Hulu, Amazon and Netflix. Sometimes, companies in one sub-sector of TMT will merge or acquire another to consolidate, diversify and broaden product offerings. This has been seen in the examples of AOL and Time Warner, AT&T and Dish Network, and Dell and EMC.

RELATED TERMS
  1. Networking

    Networking is a process that fosters the exchange of information ...
  2. Social Media Marketing (SMM)

    Social media marketing (SMM) is the use of social media websites ...
  3. Social Media Optimization (SMO)

    Social media optimization (SMO) is the use of social media networks ...
  4. Sector Fund

    A sector fund is a fund that invests solely in businesses that ...
  5. Social Networking

    Social networking is the use of internet-based social media programs ...
  6. Mobile Marketing

    Mobile marketing utilizes multiple distribution channels to promote ...
Related Articles
  1. Investing

    How To Pick The Best Telecom Stocks

    This ever-changing industry can leave investors scratching their heads. Find out which metrics matter.
  2. Small Business

    Social Media: High Risk, High Potential Returns

    Carefully selecting social media ETFs can provide you with the opportunity to diversify your portfolio and enjoy financial rewards due to user growth.
  3. Insights

    Intel and AT&T Launch Platform for IoT (T, INTC)

    Intel and AT&T will both benefit from a more sophisticated digital network, which will realize significant cost savings.
  4. Tech

    AT&T Eyes Argentina Amid Telecom Reform (T)

    Telecom reform is coming to Argentina and AT&T is one of the companies eyeing the market.
  5. Insurance

    3 Social Media Companies Ready To Go Public

    These sites are expected to go for outrageous prices, but are they worth the hype?
  6. Investing

    Top 5 Computer Stocks of 2016 (AAPL, HPQ)

    In the technology sector, there are a number of both hardware and software computer stocks for investors to consider adding to their 2016 portfolio.
  7. Investing

    Verizon: Loser in AT&T-Time Warner Deal? (VZ, T)

    The loser in the AT&-/Time Warner may end up being Verizon Communications because it won't have the media reach that a combined AT&T will have.
  8. Tech

    The Internet Of Things In 2015

    By now, the internet has made its way into nearly all of our homes and via mobile devices into our pockets. Technology think-tank ABI estimates that there will be over 30 billion devices connected ...
  9. Financial Advisor

    Advisors: How to Make Social Media Work for You

    Most financial advisors today are using social media to help build their client base. Here are some tested basic guidelines on how to get started.
RELATED FAQS
  1. What is the average price-to-earnings ratio in the Internet sector?

    Learn what the average price-to-earnings ratio, or P/E ratio, is for companies in the Internet sector and how the sector ... Read Answer >>
  2. What is the telecommunications sector?

    The telecommunications sector is comprised of companies that transmit data in words, voice, audio or video across the globe. Read Answer >>
  3. What are the biggest trends affecting the profitability of the financial services ...

    Explore the trends that most affect the financial services sector, including the role of central bank policy and challenges ... Read Answer >>
  4. What is a power ratio?

    A power ratio is a method used by media companies to measure revenue performance compared to the audience share it controls. ... Read Answer >>
  5. How strong are the barriers to entry for new companies in the telecommunications ...

    Discover the significant barriers to entry, such as the necessity for high capital expenditures, for new companies in the ... Read Answer >>
  6. Who are Facebook's (FB) main competitors?

    Explore the different social media networking sites and internet companies that are competing directly with Facebook, such ... Read Answer >>
Trading Center