By HESTER PLUMRIDGE
Europe's telecom giants hope the afterglow of AT&T's takeover deal, the sector's biggest globally postcrisis, holds some warmth for them. Vodafone Group could be among the continent's most obvious beneficiaries. But the deal also reflects an expectation U.S. regulators will allow greater in-market consolidation. Given the uncertainty about that, domestic players should pause before celebrating.
Vodafone's shares gained almost 5% after the deal's announcement Monday, largely as a result of its joint venture with Verizon Communications, AT&T's biggest rival. That reflects expectations the deal distractions facing AT&T in the next couple of years will help Verizon Wireless gain further ground. At the same time, an improved competitive environment if the deal is approved would benefit Verizon as much as AT&T. Both should help Vodafone, not least through improved prospects for a resumption in dividend payments from Verizon Wireless.
Beyond Vodafone and T-Mobile USA's seller, Deutsche Telekom, the positive news for European players seems less obvious. The 7.1 times earnings before interest, taxes, depreciation and amortization multiple paid for T-Mobile USA was certainly hefty versus a five-to-six-times developed-market average. But there is little evidence that reflects a mispricing of the sector. Postsynergies, the multiple falls nearer to five.
Regulatory approval is probably at least a year off. If it comes, it would imply regulators will allow more consolidation to deliver capital-intensive infrastructure needs. That would be useful as carriers begin the upgrade to fourth-generation mobile technologies such as Long Term Evolution. Highly consolidated markets such as Japan enjoy much faster broadband speeds than more-competitive countries like the U.K.
AT&T's deal would reduce the number of national U.S. mobile operators from four to three. European markets often have four or more operators, albeit with higher numbers of "virtual" operators that rent network capacity and greater network sharing. In Germany, cable companyLiberty Global's proposed acquisition of Kabel Baden-Württemberg is a bet regulators might be open to greater consolidation, at least in the fixed-line space.
But a lot of in-market consolidation has already happened. And regulators in Switzerland blocked an attempt by France Telecom last year to reduce the number of big mobile players from three to two. For now, that should curb European operators' enthusiasm.
Write to Hester Plumridge at Hester.Plumridge@dowjones.com
沒有留言:
張貼留言