Daily Archives: March 25, 2014

Telecoms, not in their best year

Telecoms deal currently with a new road map, as a result of the evolution of the technology. In the 80’s and 90’s the companies changed from old state monopolies to listed private groups. This step let them jump into technologies with fresh cash obtained to invest: internet, broad band, fibre and mobile services were developed in a rush (just 25 years) to the majority of the citizens.

After this quick evolution, the branch lives now a new wave of consolidation. Companies try to organise their main services and markets, buying and selling in different movements: Spain, for instance, lives a reorganisation as Vodafone has recently bought a cable operator and other changes are expected from its competitors.

However, by now, this is not the year of the telecom sector, if we take a look at four of the main world groups in T-Advisor.

Telecoms : data from NTT in T-Advisor

The Japanese NTT will obtain in its fiscal year (till march 2014) around $107,5 bn revenues (+2.8%), with a net income of $5.7 bn ($5 per share).

Telecoms : data from AT&T in T-Advisor

American AT&T sales increased 1%, till $128,8 bn, with a net income of $18.25 bn ($3.39 per share).

Telecoms : data from Telefonica in T-Advisor

Spanish Telefónica obtained $78,74 bn revenues (-8.5%), with a net income of $6.33 bn ($1.39 per share).

Telecoms : data from Deutsche Telekom in T-Advisor

German Deutsche Telekom revenues in 2013 were $82.9 bn (+3,4%) and the net income amounted $1.28 bn after the losses in 2012 ($0.69 per share).

The comparison in the main date made by T-Advisor has the following results:

Performance

YTD

Volatility

YTD

Score

Liquidity

VaR

1 week

NTT

-0.42%

15.48%

4.32

9

-3.53%

AT&T

-2.45%

16.86%

3.71

10

-3.71%

Telefónica

-5.70%

20.57%

1.61

10

-4.75%

Deutsche Telekom

-7.48%

19.14%

3.71

9

-5.13%

Investors perceive that these big companies are not so promising as before. Revenues increased slowly, what reduce future chances of technology investments, purchases and profits. None has a positive performance since January 1st and the volatility is quite high to be a typical blue-chip. The score registers also the weakness of their magnitudes. It is possible that we have to include some new players (and exclude some of the currents) in a pair of years for a similar analysis. The ability to join new technological developments will be vital for it.