European telecoms losing status as safe havens 24 Apr 2009 The old idea was that telephone service was a necessity, so operators wouldn t suffer much in a recession. Reduced expectations from Deutsche Telekom and Teliasonera suggest that is an illusion. But investors might find a modified version of the theory still holds up.
Court saves PCCW minorities from themselves 23 Apr 2009 Richard Li s $2.1bn buyout of the Hong Kong telecom he controls met a sudden death, apparently not because it was illegal, but because judges deemed it unattractive. That seems excessively kind to minority shareholders. They shouldn t be protected from their own poor judgement.
Tiscali may not make it alone 15 Apr 2009 The auditors for the debtmired Italian broadband provider won t sign off the 2008 accounts. Ernst & Young doubts whether this is a going concern. The lenders are lukewarm about refinancing, so Tiscali may have to turn to spurned suitors BSkyB and Carphone Warehouse.
BT needs back-to-basics strategy 14 Apr 2009 The UK telco is set to post ugly annual results this week, including a soaring pension deficit. New CEO Ian Livingston needs to stop the rot. A likely dividend cut should be just the start. BT needs a strategic makeover, focusing on its UK broadband infrastructure business.
Skype IPO should be appetiser for Ebay breakup 14 Apr 2009 The online auctioneer plans to float the profitable internet calling service in 2010. That s good news for shareholders. The fit was awkward, and Skype could fetch $2bn handy cash for Ebay s struggling auction unit. But to really help the shares, Ebay should unleash Paypal too.
Seat PG shows how not to restructure 23 Mar 2009 The Italian yellow pages company is in dying industry. It has a E3bn debt pile. The CEO is leaving. But it wants to raise E200m of new equity in a bizarrely structured 226for5 rights issue. One big investor has already said no. Retail investors may be less smart.
Sony Ericsson woes could bring split-up closer 20 Mar 2009 A profit warning from the handset maker has got what was expected to be a bad year for the industry off to an even worse start. Parent Ericsson already thinks the joint venture is a drag on its networks business. The latest setback will spur thinking that it s time to get out.
Cisco’s Flip deal could lead to colossal flop 20 Mar 2009 At $600m, the networking giant isn t splashing out big for the maker of the popular Flip Video gadget. But it s crossing the Rubicon into the mainstream consumer electronics market dominated by the likes of Apple. This feels like mission creep.
Vodafone Qatar plans a safe $1bn IPO 18 Mar 2009 The telecom giant s Qatari joint venture will float on the Doha market in May, after a long wait for calmer markets. Vodafone and Qatar would look silly if the shares tanked on debut as a new listing in Dubai just did. But this exercise in wealthsharing is primed for success.
Sprint and Palm may yet prop each other up 19 Feb 2009 The alliance between shrinking US wireless carrier Sprint and hasbeen handset maker Palm looks like two drunks offering each other support. Intriguingly, both show signs of simultaneously sobering up.
Paul Allen’s cable group finally pushes reset 12 Feb 2009 Charter Communications is worth quite a bit just not anywhere near the amount Microsoft s cofounder and other investors and lenders pumped into it. Going bankrupt and writing off $8bn of debt is painful, but slashing leverage is the best thing for Charter's future.
New boss takes knife to Alcatel-Lucent 4 Feb 2009 Four months into the job, chief executive Ben Verwaayen is writing down the value of the telecoms equipment maker by E3.9bn. It s an acknowledgement of the disastrous 2006 merger. But as the group finally turned cash positive, investors are cheering Alcatel s caution.
Vodafone under Colao: so far, not bad 3 Feb 2009 Six months in as CEO and Vittorio Colao is upping the mobile giant s fullyear targets. That mostly reflects beneficial forex shifts. Meanwhile, inherited problems are biting in Spain and Turkey. But Colao has made some good early decisions and his defensive strategy looks right.
Tough times threaten US mobile operators 27 Jan 2009 US telcos have long relied on torrid cell phone growth to offset their dying fixedline businesses. Now, market saturation is approaching. Worse, margins look set to compress as tapped consumers switch to cutrate services.
BT shows no signs of healing 22 Jan 2009 The UK telecoms group has issued a second profit warning, this time involving a £340m charge relating to its ailing Global Services Unit. Newish chief executive Ian Livingston says there could be more bad news to come. It bodes ill for BT s hefty dividend.
Nortel bankruptcy offers path for GM to follow 14 Jan 2009 The Canadian tech group has gone bust despite holding $2.4bn of cash on its balance sheet. Filing now, while burning cash, nonetheless allows it to avoid expensive debtorinpossession financing. Other troubled but cashrich firms, such as GM, should take note.
India’s 3G auction looks shambolic 6 Jan 2009 Successive delays, confusion on eligibility and an eleventh hour proposal to double the reserve price have marred the effort to sell third generation technology licences in the world s fastest growing mobile market. It s enough to discourage any new entrants.
Verizon Wireless reveals crack in credit freeze 11 Dec 2008 The mobile phone group has tapped banks for $17bn in loans to complete its purchase of Alltel. True, it s a kind of refinancing rather than new capital. And the debt isn t coming cheap. But it shows there are substantial cracks in the lending freeze at least for good credits.
BCE deal’s collapse shouldn’t mollify investors 11 Dec 2008 The Providenceled group pulled its $42bn bid for BCE, saying KPMG determined the deal would result in an insolvent company. The buyout firms investors benefited from some lucky breaks and should question the firms judgment.
Former tech giants laid low by small stones of debt 10 Dec 2008 There s a reason the sector has long eschewed borrowing. Technological shifts can dry up cash flows with startling rapidity as Nortel is finding out. Selling crown jewels often merely postpones problems. Just look at tech granddaddy Kodak s example.