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.
Carphone deserves governance discount 8 Dec 2008 Cofounder and deputy chairman David Ross is departing under a cloud after belatedly disclosing he d pledged his 19% stake in the UK retailer against personal loans. The failure creates a weighty overhang. But it also raises questions about the governance culture at the company.
TI’s unimaginative strategy re-jig may not be enough 3 Dec 2008 The highly indebted Italian telco is short on radical ideas. Instead it is meeting the slowdown with a familiar formula of disposals and job cuts. The proposed E3bn of asset sales may be tough to deliver. At least TI still has the option of a dividend cut.
Falling handset sales should bring consolidation 3 Dec 2008 Research in Motion, Palm and Nokia have all slashed forecasts as cell phone revenues slow. Global sales are expected to shrink next year for the first time since 2001. Add falling prices to the mix and there s trouble ahead for handset makers. Industry consolidation may result.
Latest BCE trouble is blessing for many 26 Nov 2008 An auditor has said the Canadian telco won t be solvent if the giant buyout closes. That could scupper the deal. Most involved would be relieved. Buyout investors are strapped, banks don t want to lend, and bondholders never liked the deal. Only BCE shareholders would cry.
Carphone can’t hide behind a possible demerger 18 Nov 2008 The UK telecom retailer was clearly hoping that mulling a split would offset the grim outlook for its electronic retail venture with Best Buy. It hasn t worked. What s more, founder Charles Dunstone doesn t inspire investor confidence by categorically ruling out a telecoms sale.
Carphone scandal a wake-up call on director shares 13 Nov 2008 The CEO, Charles Dunstone, says he had no idea that an extravagant director was using the retailer s shares as loan collateral. Meanwhile, banks say they have no responsibility for forcing disclosure of such arrangements. In sum, a huge lack of foresight by all involved.
Vodafone battens down the hatches 11 Nov 2008 The mobile giant has slashed its fullyear revenue outlook, announced a £1bn costcutting plan and tweaked its strategy. It s decisive action, just in time. Emerging markets are hurting now too. Without currency benefits, Vodafone s first half would have really disappointed.
Li calls wrong number on PCCW buyout 10 Nov 2008 Chairman Richard Li is offering $3.7bn to take the Hong Kong telecoms group private. That s less than the value implied a month ago by private equity offers for part of the business. The board declined those, and shareholders should only take Li s call if he offers more.
Sprint woes show how downturns bite underdogs 7 Nov 2008 In better times, investors lent Sprint and Sirius billions to set up networks to challenge their bigger rivals. But now that money is difficult to find, their customers are fleeing. When the economy slows, these businesses have a tough time staying aloft.
Telenor learns about tough markets 6 Nov 2008 Stiff shareholder backlash appears to have the Norwegian telecom operator rethinking the financing of a $1bn investment in an Indian startup. It wanted a rights issue sensible for a company with debt constraints and a supportive 54% shareholder. But not in these tight times.
Deutsche Telekom turnaround plan stands up 6 Nov 2008 The German telecom operator is distinguishing itself from the crowd by meeting its targets. UK rival BT could learn a thing or two from chief executive Rene Obermann s costcutting drive. Investors just want to be sure DT won t go back to its wild dealmaking past.
Richard Li tries rope trick with PCCW 5 Nov 2008 The son of Hong Kong s richest man plans to wangle control of his telecoms empire effectively without paying a penny. His $3.7bn offer to take PCCW private looks clever as well as opportunistic. Not bad given Li's track record of bungling deals.
BT puts itself firmly on the sick-list 31 Oct 2008 A profitwarning and the resignation of François Barrault, head of the telecom group s muchheralded services growth engine, are bad news. Costs are out of control. Add worries about how the credit crunch is hurting BT s pension fund, and investors are right to run scared.
US legacy telco deal just forestalls the inevitable 27 Oct 2008 Landline phone companies are racing to cut costs faster than customers flee. Buying a competitor, as in CenturyTel s $5.8bn purchase of Embarq, may shore up their combined finances, but it doesn t hold back the technological tides.
Ericsson’s good news is unlikely to last 20 Oct 2008 Investors are cheering the world s largest network maker s positive Q3 results. But they are largely due to costcutting and Ericsson is rightly cautious about the outlook. The worst of the financial crisis and broader economic slowdown aren t reflected in these figures.
Private equity style-drift dangers start to show 6 Oct 2008 It isn t just TPG or JC Flowers that lost money on minority investments. KKR s investments in Sun Micro and Legg Mason and Blackstone s Deutsche Telekom deal are all performing poorly. Private equity can lose more than just their investors' money.