M&A may look tempting, but dangers lurk

First published on Mobile World Live, 4 November 2013

More M&A involving mobile operators looks on the cards. According to Ernst & Young’s recently-published H1 2013 report on the M&A sector, 35 per cent of company executives surveyed – from all industry sectors, not just telecoms – said they were likely to pursue acquisitions. That compares with just 25 per cent who thought the same a year ago.

The consulting firm further found that 65 per cent of executives expected the global economy to improve over the coming year, up from a miserly 22 per cent a year ago. Growing confidence in the economic outlook should make boardrooms less reticent about taking the M&A plunge.

Softening M&A attitudes will auger well for some mobile operators. It’s often said M&A is one of the few areas of human activity where it pays to be victim. Deep-pocketed predators (or at least ones that can get their hands on plenty of debt financing) invariably boost the share price of their intended target when word gets out. (more…)

Dish boss plays weak patriotic card for Sprint

Charlie Ergen was apparently “disappointed” by Masayoshi Son, SoftBank’s boss, when he made jibes about the credibility of Dish Network’s takeover bid for Sprint. In an interview with USA Today, referring to Son’s remarks at SoftBank’s full-year earnings call on 26 April, the Dish chairman said “it was more [about] personal attack and personality than it was about business”.

Yet there appears little justification for Ergen to get hot under the collar about personal attacks, not least because Son had plenty of “business numbers” in his arguments about why he believes SoftBank’s bid for Sprint is better value than Dish’s. (more…)

Fixing Vodafone

There was a time when the news that Vodafone Group was eyeing a takeover of Cable & Wireless Worldwide (CWW) would have come as a big surprise. The UK-based operator once seemed determined to be thought of as a mobile-only player, shunning investments in the fixed-line infrastructure that is CWW’s speciality. But when Vodafone last week confirmed its interest in exactly such a deal, few were taken aback. Buying CWW would simply mark the continuation of a strategy that Vodafone started to implement several years ago. (more…)