Mobiles can be wealth risk
By JAMES CHESSELL
Monday 23 July 2001
An upcoming United States court case that examines the potentially harmful effects of radiation from mobile phones could hurt the valuations of some telecommunications companies.
In a recent report, Macquarie Research Equities argues that while scientific research into the long-term health effects of using mobiles remains inconclusive, the impending litigation is a concern for telco investors.
"Litigation by alleged victims of EMR (electromagnetic radiation) has already commenced in the US and it may proliferate over the next 12 months," says Macquarie.
"Although it is likely to be some time away, a successful action would clearly be negative for mobile valuations."
According to Macquarie's research team, even the threat of a successful action could hurt global mobile valuations in the short to medium term.
The experience of the tobacco industry vividly demonstrates the damaging impact billion-dollar class actions can have on individual companies.
Recently it was revealed that Peter Angelos, renowned for having acted in successful cases against tobacco companies, was acting as co-counsel for the EMR case.
His involvement is regarded as a potential signal of "a proliferation of cases being brought over the next couple of years".
The US case involves Christopher Newman, a US neurologist, who blames using a mobile four hours a day, six days a week, for a cancerous tumor behind his right ear. Dr Newman is seeking $US800 million ($A1582 million) in damages from several companies, including Vodafone and Motorola.
Despite the impending litigation, it is not yet certain exactly where liability - if it exists at all - rests.
"While handset and equipment makers would clearly be liable, network operators are different from corner stores selling cigarettes in that they have more control over their customers," says Macquarie.
A second point is that carriers are aware of the issue and, in many cases, are contributing to research efforts.
The World Health Organisation is collating the estimated $US100 million worth of research being conducted into the issue.
While it continues to monitor and research the issue, Telstra's public stance is that there is insufficient evidence to substantiate claims that mobiles present health risks. |
