Explosive deal coming in European telecoms?

According to James Enck of Daiwa, an explosive EuroTelco deal is around the corner. Let's take a look at some of the possibilities, in 7 categories:

1. Deutsche Telekom: rumours:

• Acquisition of O2 fell through, but who knows. T-Mobile UK could use some reinforcement and O2 Germany can be sold on to KPN.
• In other news today, the Handelsblatt writes that T-Systems is interested in Atos Origin. T-Systems so far is mainly focused on Germany and would welcome international expansion. Moreover, ICT-services are part of DT's growth strategy (as much as it is for BT and Swisscom).

2. Vodafone: hasn't finished shopping:

• It could make a bid for T-Mobile USA, and at the same time sell its Verizon Wireless stake to Verizon. That would allow Vodafone to switch to GSM technology and truly integrate the US operations.
• The other minority stake that doesn't sit comfortably in Vodafone's portfolio is SFR. Possibly Vivendi could at some point part with it.

3. Consolidation among Southern European PTTs, looking for growth in Eastern Europe:

• Portugal Telecom, according to market rumours would be considering making an offer for a minority stake in OTE. Telefonica has an interest in Portugal Telecom and owns Cesky Telecom. OTE too has interests in Eastern Europe.
• Telefonica apparently is a candidate for a bid for O2 as well.
• And Egyptian Orascom, owner of Italian mobile and fixed operator Wind, likes to build a pan-Mediterranean mobile operator by acquiring providers in Spain and Greece.

4. Companiews leading the current consolidation trend among mobile and broadband operators are PTT's and the likes of Tele2, the Vodafone-of-fixed-line-telecoms:

• Orange (France Telecom): after taking over Spanish Amena, more is to be expected.
• Telecom Italia has broadband assets in France, Germany and the Netherlands, markets that still need to be consolidated further.
• Tele2, acquirer of Versatel, has most likely not yet ended its shopping spree.

5. VoIP:

• Google, according to the New York Times, will introduce a 'communications tool' tomorrow. It could be an instant messaging (IM) client with voice capabilities (VoIP over IM or VoIM). In (possibly) related news, Google bought Android (software for mobile devices) and plans to issue (pi -3) * 100 million shares.
• Skype, according to earlier rumours, had nearly been sold to News Corp for no less than $3 bn. A rather absurd price, if you ask me. But time is running out for Skype's owners, now that Yahoo!, MSN (Microsoft) and Google (?) offer IM and VoIP. Cringely toyed with the idea that Comcast could be a buyer; the European equivalent I suppose could be Liberty Global, owner of UPC.

6. Other assets that are possibly for sale:

• Arcor, Deutsche Telekom's largest challenger and part of Vodafone. A suitable prey for APAX, that will buy Versatel Deutschland after Tele2 completes the Versatel deal. APAX wants to be a national player in Germany. Other candidates are Telefonica Deutschland and Telecom Italia.
• Colt Telecom: focuses and the not-so-hot wholesale and business markets. Its shares hardly moved since the start of the year.

7. Candidates for private equity or an LBO:

• TDC has alreadys been mentioned.
• KPN too.
• And also O2.