Changes In The Sector Of Telecommunication Services

The GICS which stands for Global Industry Classification Standard has introduced major changes in the Sector of Telecommunication Services. The last few years have seen rapid steps of evolution in the way people communicate with each other, access content of entertainment and other relevant information. This evolution is due to the result of the integration among media, telecommunications, and other companies of internet. Companies have taken a further step in this direction by the consolidation through mergers and acquisitions and various now offer bundled services like cable, services of internet, and services of telephone.

Many of these companies also form content of interactive entertainment and the aggregation of the information that is delivered through various platforms such as cable and internet, as well as accessed on cellular phones is also done. In light of the changes in the sector of telecommunications there will be a number of revisions to the structure of GICS which will be implied after the close of business (ET). The changes will be implied in the Indexes of MSCI Equity in step of one as part of the Semi-Annual Index Review in November 2018.

Summary of changes

The Sector Telecommunication Services is being renamed and broadened as Services of Communication for including companies that allow communication and provide content that are related and information through the medium of many media. The Sector which is renamed will incorporate the telecommunication companies that presently exist, as well as companies chosen from the Sector of Consumer Discretionary presently classified under the Group of Media Industry and the Industry of Internet and Direct Marketing Retail Sub, along with selected companies which are presently classified in the Sector of Information Technology The Evolution of the structure of GICS.

In the year 1999 of the month of August, the indices of MSCI and S&P Dow Jones proclaimed their agreement for co-developing GICS. During their first introduction, GICS was a structure of 4 tiers with 23 Industry Groups, 10 Sectors, 123 Sub Industries and 59 Industries. Despite the practice of consultations for periodic client, the evolving of the structure has taken place, 24 Industry Groups, 10 Sectors, 156 Sub-Industries and 67 Industries. Direct input from participants of global equity market has played the key role for these changes.

Some of the changes of more significant nature that took place over the past 15 years incorporate:

• Sector of Industry - the addition of an Industry for Services of profession and Sub-Industries for services of Diversified Support.
• Financial Sector – the forming of an Industry for REIT which stands for Real Estate Investment Trusts along with seven Sub-Industries in relation to REITs.
• Sector of health care - the addition of Sub-Industries for Health Care, Services of Health Care, Life Sciences Tools & Services.
• Consumer Discretionary Sector - the Industry addition for Services of Diversified Consumer and Sub-Industries for Automotive.
• Sector of Information Technology – the elimination of the Industry of Office Electronics and forming of the Technology Hardware.
• Peripherals Sub-Industry is formed through merging the Storage of Computer and Hardware of Computer and Peripherals Sub-Industries.