Breakingviews

Portugal Telecom pays the price for weak controls

July 16, 2014

An Espirito Santo group company failed to repay a $1 bln loan to PT. That means the telco’s shareholders will own a smaller stake in the group it planned to form with Brazil’s Oi. It’s not a good start for a complex merger. The combined entity looks financially weaker.

FCC needs thick skin to weather its moment in sun

May 14, 2014

The U.S. telecom watchdog is tackling flashy issues on mergers, net neutrality and wireless spectrum. Resolving them won’t be easy, given the agency’s mandate to spark competition while also promoting efficiency and consumer choice. Current commissioners seem up to the task.

AT&T will struggle to justify $70 bln DirecTV bid

May 14, 2014

Expanding into satellite TV requires heroic assumptions to be financially viable. Just to cover its cost of capital, AT&T would need to find over $2 bln of synergies. That’s more than even Comcast pledges to squeeze from Time Warner Cable. The deal has a whiff of desperation.

AT&T deal dialing emits a shaky signal

May 13, 2014

First, it wanted T-Mobile US for more domestic subscribers. After regulators nixed the idea and Verizon cleaned up its wireless JV, AT&T pursued Vodafone for European growth. Now, DirecTV or Dish beckons at home. The rationale is questionable and the broader strategy wayward.

PCCW spinoff can’t unwind tycoon discount

November 23, 2011

Richard Li’s conglomerate snagged a generous $3.8 bln price tag for its Hong Kong telecom business, thanks to a promise of fat dividends. But the spinoff exposes an inconvenient truth: the mogul’s own holding company is valued at almost 40 percent less than the sum of its parts.

BT gets better side of deal with its pension fund

March 23, 2012

The UK telco’s stock rose 6 pct after it said its pension deficit had more than halved to 4 bln stg and unveiled a plan to shrink the liability further by 2021. The market reaction is understandable. The pension scheme’s trustees could have demanded a faster fix to the problem.

EU probe shows hidden costs of China subsidies

May 28, 2012

A mooted trade case against telecom vendors may hinge on their access to state credit. Yet Huawei and ZTE are competitive enough not to need such perks. State support for national champions may now be turning into a disadvantage, since it makes it easy for others to cry foul play.

RIM doesn’t need to remain Canadian

May 31, 2012

The struggling BlackBerry maker is weighing its options, from joint ventures to a sale. Despite past form, some officials’ preference to keep the company Canadian shouldn’t worry would-be foreign buyers too much. RIM’s declining sales and significance present a bigger challenge.

T-Mobile sale not the only telco worry for antitrust watchdogs

March 28, 2011

America's antitrust and telecoms watchdogs have their hands full with AT&T's proposed purchase of T-Mobile. So they may overlook what's at stake in a seemingly esoteric spat between Google geeks and their Facebook cohorts.

Sprint and Softbank forced into tactical warfare

January 9, 2013

U.S. pay-TV company Dish put forward a highly conditional $2.3 bln offer for Clearwire, a spectrum owner integral to the ambitions of Sprint and its Japanese buyer. Though the Dish bid is unlikely to go far, it could pressure Sprint to pay more - or strike a deal with Dish.