Telecom operators prepare for M&A as spotlight falls on regulators

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Rating agencies say operators can improve credit standing via mergers and acquisitions, as telecom operators and investors prepare to meet at the TMT M&A Forum 2014 in London to discuss strategies

Telecom operators from mature and developing markets globally are meeting at the TMT M&A Forum in London on March 19, as the sector braces for an influx of mergers and acquisitions, driven by consolidation needs and convergence opportunities, and underpinned by strong capital debt markets.

Senior telecom executives from Vimpelcom, Orange, Etisalat, KPN, Ooredoo, Millicom, Hutchison 3, Telekom Austria, and many more will join private equity investors, investment bankers, technology and regulatory experts, and the leading legal and professional advisory firms at the third edition of the annual TMT M&A Forum, which takes place at the Andaz Hotel, London with participation limited to 150 senior executives.

Standard & Poor's Patrice Cochelin, Analytical Manager Telecom & Tech EMEA, will deliver a keynote speech entitled: ‘Are the capital markets willing to fund a bigger M&A wave?’, and chair the Raising Finance session.

“Debt, equity and hybrid capital continues to flow to the TMT sector but telecom companies have a record of overpaying and overreacting for acquisitions,” said Cochelin. “While we believe credit quality may have bottomed out in the sector, with the right targets and the right funding mix, carriers can solidify their business positions and credit standing via M&A,” he added.

Head of M&A for Telekom Austria, Roland Haidner, who is joining senior TMT investment bankers from Goldman Sachs, UBS and Macquarie Capital on the plenary M&A Panel hosted by Merrill DataSite, said: “All eyes are on Germany and Ireland where big decisions are being made. Should those deals receive regulatory backing, I expect other operators to make a move, particularly in markets such as Italy and Scandinavia. Several markets in Europe are likely to see the number of operators reduce from four to three – some could even see three reduce to two,” he said.

Haidner said Telekom Austria would continue to pursue consolidation targets, as well as fixed-line convergence opportunities: “Deutsche Telekom’s acquisition of GTS Central Europe and Vodafone’s deal to buy Kabel Deutschland demonstrate mobile operators’ desire to invest in fixed line and cable assets, which I think we will also see more of over the next 12 months,” he added.

The TMT M&A Forum 2014 provides a knowledge sharing platform for the key players and financial decision makers active in the telecom, media and technology sector globally. Key session themes include: Telecom Strategy; TMT M&A; The Future of TMT; Infrastructure Sharing and Spectrum; Mobile Towers, and Raising Finance - the return of LBOs and IPOs.

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Dominic Lowndes
TMT Finance
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