MOBILE PHONES ATTRACT THE INTEREST OF EUROPEAN OPERATORS.

• Position: Industry Overview

Mobile telephony, a real cash source, has started attracting the interest of European telecommunications operators, increasingly faced with falling revenues from fixed telephone lines. According to analysts, the number of clients using fixed lines is likely to drop by 5% per year in the future whereas mobile phones are still on the up. European operators, once again active in the acquisition market after being interrupted by the end of the internet boom, are now targeting mobile operators in a bid to profit from new markets.

In recent weeks, the European telecoms sector saw its biggest transaction for five years, when Spanish Telefonica paid euro 26 billion for the British mobile operator O2. And this summer alone, France Telecom paid euro 6.4 billion for Spanish Amena, Deutsche Telekom bought Austrian Telering and Swiss Swisscom signalled its intention to buy Irish Eircom. The reasoning behind the different operations varies however. Telefonica, active in Spain and Latin America, will now be operational in the English, Irish and German markets, while France Telecom, present in Spanish fixed and internet markets is aiming, through Amena, to implement its convergence strategy for fixed, internet and mobile offers.

According to Jean-Michel Salvador, an analyst at Fideuram Wargny, this convergence strategy is most likely to succeed...