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Technology Stocks : Nokia (NOK) -- Ignore unavailable to you. Want to Upgrade?

To: JohnG who wrote (19512)	4/12/2002 9:34:41 AM
From: elmatador	Read Replies (1) \| Respond to of 34857

Europe-wide mobile meltdown, Mobile telecoms Published: April 11 2002 20:03 \| Last Updated: April 11 2002 21:01 news.ft.com <<COMMENTS: The horse trading, the 'playing close to chest', all that has to come to and end, and pretty soon.>> The collapse in Vodafone shares is turning into a Europe-wide mobile meltdown, with Orange, MMO and other wireless stocks also tumbling. This is at least internally consistent. Vodafone’s brutal derating is not driven by company-specific factors but by a fear that mobile has gone ex-growth, and that, rather than accepting this, managements will waste existing cash flow trying to get it moving again. This alarmist thesis can be applied to the sector. More rationally, the market is closing a valuation gap between Europe and the rest of the world. The meltdown started in the US, following disappointing Christmas sales. A month ago, European mobile traded on nine times next year’s forecast earnings before interest, tax, depreciation and amortisation a 30 per cent premium to US mobile, and a 50 per cent premium to emerging Asia and Latin America. Considering penetration rates in Europe are the highest in the world, that was hard to justify. Even now Vodafone, down 39 per cent since January 1 in dollar terms, has fallen less than AT&T Wireless or Sprint PCS, down 47 per cent and 61 per cent respectively. NTT DoCoMo, up 7 per cent over the same period, looks vulnerable. Company-specific issues add fuel to the fire. MMO, for instance, is exposed to UK regulation and competition from its former parent BT. But industry trends dominate. And with even the bulls accepting that it will be several quarters before average revenue per user shows a discernible upward trend, do not expect a rapid bounce-back.