Over the last quarter of a century, the continuous development of the telecommunications industry, dramatic changes in its institutional structure and the overall growth of its strategic importance for the modern information society have brought to the forefront the need for more careful study of fundamental processes in telecommunications. Amid the wave of mergers and acquisitions, international diversification of business has become one of the most debated issues. This study was designed to examine the factors influencing the efficiency of the internationalization of telecommunications companies. In order to determine the effect of M&A announcements on stock returns for acquiring companies, we applied an event study analysis. To test the impact of different country parameters characterizing the level of economic and institutional development of the target environment on acquiring firm returns, a regression analysis was used. The study was conducted on a sample of 66 M&A deals between telecommunications companies in 2005–2015. It appeared that the territorial distance between the countries, the degree of international diversification of the acquirer, and institutional characteristics of the target country have the impact on acquirer returns. Due to the high international expansion rate of this industry, the results of this research may be useful to the managers of telecommunications companies for making strategic decisions, and to any practitioners in the field of mergers and acquisitions in finding the optimal strategy of internationalization. There is an optimum degree of internationalization, which makes all the more important the problem of choosing the right expansion strategy considering both external factors, such as cultural, administrative, geographic and economic barriers between countries, and internal factors such as the company's experience in functioning on foreign markets.