Assessing the meltdown in the telecommunications sector

Abstract

The trading difficulties affecting the telecommunications sector have continued to deteriorate over the past year and a half. The purpose of this article is to update the outlook as presented in previous articles on the same general theme. What this latest version demonstrates is that there has been a widespread write‐down in the capital values of telecommunications companies of all kinds on a scale that has few, if any equals in other sectors. The article analyses the reasons for this phenomenon, concentrating upon the issue of indebtedness. Data are presented on a variety of indicators which suggest that the sector is mired in a spiral of debt, credit downgrades and bankruptcy. This has implications for the structure of the sector in the medium term, but consolidation must await signs of an upturn in the fortunes of companies in a position to act as predators rather than prey.

Citation

Curwen, P. (2002), "Assessing the meltdown in the telecommunications sector", info, Vol. 4 No. 5, pp. 26-38. https://doi.org/10.1108/14636690210453208