Siemens speaks up on 3G
Nortel adds to warnings
By Andrew Ward in London
Published: December 21 2000 21:11GMT | Last Updated: December 22 2000 00:45GMT
Nortel Networks, the Canadian communications equipment manufacturer, on Thursday added to forecasts of a new wave of mergers in the telecoms sector as operators began developing expensive third-generation mobile phone networks.
Pascal Debon, European president, said operators would be forced to join together as national infrastructures were integrated into a single pan-European network.
"We will see in the next few years some consolidation in Europe. More and more operators are talking about pan-European services and will need to integrate to achieve it," he said.
Mr Debon's comments followed Wednesday's prediction by Siemens, the German electronics maker, that some mobile operators would collapse under the weight of debt taken on to pay for 3G licences and networks.
"Several of these operators won't survive. They're going to be swallowed by others," said Volker Jung, a board member. "The big ones will survive."
Mr Debon said operators with only one or two 3G licences in Europe would struggle to compete against rivals with coverage across the Continent. "We always talk in terms of countries but customers do not see borders, they see a single region called Europe."
Yesterday, Nortel, Siemens and Nokia, the Finnish telecoms equipment manufacturer, struck provisional deals together worth more than E1bn ($912m) with Deutsche Telekom to provide equipment for the German operator's T-Mobile 3G network in Germany, the UK and Austria.
Ericsson, of Sweden, added to the contracts agreed between network builders and operators recently when it pledged to supply 3G equipment to Sonera, the Finnish operator.
Smaller new entrants, such as Mobilcom of Germany and Hutchison, in the UK, have encountered difficulties this month trying to secure bank loans to pay for 3G networks, increasing speculation that less well- funded operators might fall in to the hands of larger rivals.
However, analysts said the industry giants were unlikely to develop an appetite for acquisitions until 2002. One pointed out that Vodafone and France Telecom had nearly completed their European expansions, Deutsche Telekom was focused on the UK and Germany, and British Telecommunications would struggle to fund deals until it floats its wireless division late next year.
"Funding their own 3G roll-out is a higher priority for the large operators than mopping-up scraps. Further consolidation might be some time off," said Zara Lyons, an analyst at ABN Amro. |
