Telecommunications: Ways to survive a sea of troubles
For much of the 1990s, M&A meant one thing to telecoms companies the creation of cross-border empires. Aware that their home markets were under attack from new start-up companies such as WorldCom in the US and Colt Telecom in the UK, the former monopolies went on an overseas buying spree picking up minority stakes in emerging market monopolies and mobile-phone operators whenever they came up for sale.
Working on the assumption that the industry would eventually be dominated by four or five mega-groups, many telecoms companies sought protection in cross-border alliances. KPN, Swisscom and Telia set up Unisource (a holding company for their international investments). Some (such as Telecom Italia and AT&T, and France Télécom and Deutsche Telekom) went as far as buying shares in each other.
But over the past two years, the...
