1998 and 1999 and the first half of 2000 saw an unprecendented level of growth as well as mergers and acquisitions in the telecom industry, not least in Europe. The last 18 months have seen a sharp turnaround in the economy as a whole and particularly in telecommunications. Sales growth has slowed down, the market capitalisations of the main telecom companies have plummeted, and generally the industry is considered in crisis. So, as the main european incumbents have now published their annual reports for the year 2001, we propose to look at some of their key financial indicators. Has their financial situation really deteriorated? Are sales and EBITDA (Earnings Before Interests, Taxes, Depreciation and Amortisation) declining or does the problem lie more in the goodwill and cost of some investments? Have at least incumbent operators managed to build an international presence, since it was the primary reason to incur large debts?
Note: We basically assume that annual reports are sincere.