Debt-laden telecoms companies will be forced to further consolidate and divest during 2002, as they simply cannot afford to go it alone. This is one of the findings of the World Markets Research Centre (WMRC) report on the prospects for the global telecoms market in 2002.
The analysis says that if 2001 were the
annus horribilis for the global telecoms market, then 2002 is hardly likely to deliver the promised land of full recovery. Many telecoms operators have taken dramatic measures to reduce expenditures and reduce debts.
As a result, further consolidation and divestments are on the cards and, in the case of Western Europe’s third generation (3G) mobile licensees, we are likely to see network sharing agreements.
However, 2002 is unlikely to see the wide-scale commercial deployment of such broadband solutions, let alone networks offering high data rates and multimedia services; the debt-laden incumbents such as BT, Deutsche Telekom and KPN simply cannot afford to go it alone, says WMRC.
Regulatory change and the difficult ‘last mile’ “If the attitude of operators like British Telecom and Deutsche Telekom are anything to go by, Central and Eastern European regulators will have to be at their most interventionist to make sure their former monopolies loosen control of their precious last mile, the key to fixed broadband (digital subscriber line) competition. After all, returns on their wireless broadband (3G) investments are hardly likely to be forthcoming in 2002,” says the report.
The ‘last mile’ is the point through which cable backbone networks actually reach consumers’ homes. It is problems of securing the last mile companies that are looking set to scupper Liberty Media’s plans to move into the German cable market with the planned acquisition of six franchises from Deutsche Telekom (see Liberty Media’s Deutsche Telekom Cable Deal Hits Regulatory Snags).
A separate report from Forrester Research has also warned that telecoms companies will lose out if they attempt to compete head-on with cable companies, by matching the latter’s ‘triple-play’ of voice, video and data communication (see European Telcos Will Lose Out If They Compete Head On With Cable Companies, Warns Forrester).
