Feeds

European telecoms: light at the end of the tunnel

Debt reduction

  • alert
  • submit to reddit

Beginner's guide to SSL certificates

Europe's three largest telcos are all showing signs that market conditions are improving.

After a torrid two years of cutbacks, job losses and asset sales, there are signs that the economic gloom may be easing somewhat for the 'big three' European telcos: Deutsche Telekom, France Telecom, and BT. Helped by a reduction of debt and the uptake of broadband, all three are exhibiting signs that conditions are improving.

Deutsche Telekom has recently announced that it is to acquire Polska Telefonia for €1.1 billion. This is its first acquisition for nearly two years after a spending spree during the boom years meant that DT racked up a crippling debt burden.

DT already owned a 49 per cent stake in the Polish mobile player, but was keen to gain full control because it is Poland's largest mobile operator, profitable, and offers an attractive route into the underdeveloped east European mobile market. Poland is one of the most populous states in eastern Europe, and has a mobile phone penetration rate of only 40%.

France Telecom's (FT) return to financial health has been signaled by its decision to gain full control of Orange. It currently holds an 87 per cent controlling stake, with the remaining 13 per cent held by minority shareholders. It is offering 11 of its own shares for 25 Orange shares in an all-share deal thought to be worth approximately €7.1 billion.

Only a year ago FT was on the brink of collapse after a spending spree left it facing a debt of E68 billion. However, new management, a controversial cash injection by the French government, and a restructuring program have helped put it on the road to recovery.

As Europe's first privatized carrier, BT has often led the continent both in its mistakes and its recovery program. BT has taken giant strides away from its debt-ridden past and is seeing a sharp increase in profit and the growth of a new revenue stream from broadband Internet access.

However, it still has the shadow of a billion-pound pension fund deficit hanging over it. BT's one area of weakness is the lack of a mobile operation (it spun out its mobile network as mmO2 in 2001), but it is intent on becoming a virtual mobile operator.

In the end, the 'Big Three' are still facing problems, mainly from the decline in fixed-line calls. However, with greater uptake of broadband, and the reduction of debts, all are approaching the future with a degree of optimism.

Recommended research

Reuters Business Insight: "The Wireless Outlook"

Secure remote control for conventional and virtual desktops

More from The Register

next story
Brits: Google, can you scrape 60k pages from web, pleeease
Hey, c'mon Choc Factory, it's our 'right to be forgotten'
Of COURSE Stephen Elop's to blame for Nokia woes, says author
'Google did have some unique propositions for Nokia'
FCC, Google cast eye over millimetre wireless
The smaller the wave, the bigger 5G's chances of success
It's even GRIMMER up North after MEGA SKY BROADBAND OUTAGE
By 'eck! Eccles cake production thrown into jeopardy
Mobile coverage on trains really is pants
You thought it was just *insert your provider here*, but now we have numbers
Don't mess with Texas ('cos it's getting Google Fiber and you're not)
A bit late, but company says 1Gbps Austin network almost ready to compete with AT&T
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.