Why Are Telcos Exiting AdTech?

Over the past decade, a number of large telecommunications companies have acquired advertising technology businesses, only to sell them off — often at a loss — just a few years later.

On paper, the rationale for telcos entering AdTech looks solid. Many of them operate multiple digital properties (websites, streaming services, and more), sit on rich consumer data sets, and control the communication infrastructure that could theoretically support a serious programmatic advertising operation.

So why have so many of them ended up retreating?

Why AT&T Sold Xandr (formerly AppNexus)

In June 2018, AT&T announced it would acquire AppNexus — a programmatic AdTech company that claimed to be the largest independent digital advertising exchange at the time — for a reported $1.6 billion. The plan was to integrate AppNexus with AT&T's first-party data, premium video content, and distribution network.

AT&T's stated ambition was to become a dominant force in digital advertising and challenge Google and Facebook directly.

Three years later, in December 2021, AT&T announced it was selling the rebranded Xandr to Microsoft for a reported $1 billion — a $600 million loss on the original purchase price. AT&T executives effectively conceded that the company was abandoning its ambitions in digital advertising.

Why SingTel Sold Amobee

In 2012, Singapore-based SingTel acquired Amobee, an AdTech platform that helps advertisers buy ad inventory across websites and mobile devices, for $321 million. The strategy was straightforward: compensate for declining revenues from traditional SMS and voice services — eroded by the rise of over-the-top communication apps like WhatsApp — by building out a mobile advertising business.

Despite being well-positioned to pursue that goal, SingTel never fully realized Amobee's potential. In July 2022, the telco announced it would sell Amobee to Israel-based Tremor International for $239 million — $82 million less than it had paid a decade earlier. Executives framed the sale as part of a broader strategic reset to reshape SingTel's portfolio.

Why Verizon Sold Yahoo

In 2017, Verizon acquired Yahoo for $4 billion, with the ambition of building a multibillion-dollar media empire capable of competing with Google and Facebook. Yahoo was folded into the Oath brand alongside AOL, Yahoo Sports, TechCrunch, and Engadget. Oath was subsequently rebranded as Verizon Media in 2019.

The vision never materialized. In May 2021, Verizon Media sold Yahoo and AOL to Apollo Global Management Group for $5 billion — nominally a gain on paper, but one that came after years of write-downs and a sustained failure to challenge the digital advertising duopoly. Verizon stated that media and advertising were no longer core to its business.

Why Telcos Have Struggled to Make AdTech Work

Looking across these cases, a few common threads emerge.

The first is that acquiring an AdTech business does not, by itself, guarantee the ability to turn it into a profitable division. Regardless of whether the acquired company was performing well beforehand, the acquiring telco still needs a deep understanding of how the programmatic advertising and AdTech industries function — from both a business and a technical standpoint.

System integration is a particularly thorny challenge. Combining a telco's existing infrastructure with a newly acquired AdTech platform is nowhere near plug-and-play. The central question — how do you merge these technology stacks and actually activate the user data? — turns out to be far harder to answer in practice than it sounds in a boardroom.

The second recurring problem is the competitive context. Google and Facebook don't just participate in digital advertising — they define it. Google owns the search advertising space through Google Search and YouTube and dominates open web advertising. Facebook owns social media advertising. Both have entrenched positions built over many years. Independent AdTech companies have been attempting to chip away at that dominance for the better part of a decade, with only a handful finding meaningful success. A telco arriving via acquisition, without a differentiated strategy, faces the same structural headwinds.

The third issue is valuation risk. Paying hundreds of millions or billions of dollars for an AdTech asset creates enormous pressure to generate returns quickly — and when the integration proves more complex than anticipated, those assets can rapidly become expensive, underutilized pieces of technology that the organization doesn't fully know how to operate. That dynamic explains why these telcos ended up writing down their AdTech investments and moving on.

What Telcos Could Do Differently

Despite this pattern of failed acquisitions, there are real opportunities for telcos in AdTech. The core mistake many of them made was assuming that buying a leading AdTech company would deliver market dominance quickly.

A more viable path would be to build from existing strengths: the proprietary data, the infrastructure, and the digital properties telcos already own. Rather than acquiring technology that needs to be retrofitted to an existing business, building AdTech platforms from the ground up allows organizations to design systems that align precisely with their operational needs, integrate cleanly with existing tools, and evolve incrementally as market conditions and business priorities shift.

The challenge with that approach is that it requires genuine domain expertise in programmatic advertising and digital marketing — both at the business strategy level and in engineering. Finding engineers with meaningful AdTech development experience is genuinely difficult, especially at scale. Telcos without that in-house capability would need to source a development partner with relevant specialization. Without that expertise, building from scratch carries its own risks of a different kind.

The lesson from the AT&T, SingTel, and Verizon experiences isn't that telcos can't succeed in AdTech — it's that acquisitions alone, without the integration capability and competitive clarity to back them up, are an expensive way to find that out.