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Vodafone Group Plc Message Board

  • betting_my_bundle betting_my_bundle Sep 14, 2013 10:53 AM Flag

    Bloomberg: AT&T’s Europe Threat Has Incumbents Weighing Ways to Bulk Up

    Europe’s biggest phone companies have put the brakes on a flurry of asset sales as they brace for the likely entry by AT&T into the $313 billion market...

    Vodafone Group’s $130 billion agreement this month to exit its US venture with Verizon Communications Inc. has made the UK mobile-phone company a potential takeover candidate for AT&T. A new owner of Vodafone, with more than 140 million customers in 14 European countries including Germany, the UK and Spain, would instantly become the region’s biggest mobile carrier and may trigger a series of mergers and acquisitions.

    “It’s a potentially seismic event, the first real entry of a major international telco into the European space,” said Paul Marsch, a London-based based telecommunications analyst at Berenberg Bank. “Other industry players would be expecting, given AT&T’s rhetoric, that they would be trying to accelerate capital expenditure and see more aggressively the kind of tariff structures you’ve seen in the US”

    Europe’s debt crisis, which resulted in a slump in consumer spending -- along with the valuations of the region’s phone assets -- has attracted bargain-hunting investors including Mexico’s Carlos Slim and Hong Kong’s Li Ka-shing. AT&T may be next, having scoured Europe for takeovers this year and examined candidates from EE and Telefonica to Newbury, England-based Vodafone, people familiar with the matter have said.

    The combined market value of Europe’s telecommunications companies shrank 28 percent between 2006 and 2012, compared with a 7 percent increase for their US counterparts...
    Another impetus for mergers and acquisitions is pressure regulators have put on carriers’ revenue and profitability...

    The US, Japan and Korea now account for 88 percent of all fourth-generation mobile subscriptions, while the EU, once the world leader in wireless technology, has only 6 percent...

    “There’s a necessity for consolidation among European carriers as they invest in 4G and fiber networks...”

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