Hardly a week goes by without a headline-grabbing merger or expansion. The industry is changing at an extraordinary clip. Analysts agree that the telecoms industry will be increasingly dominated by a few major alliances. But the type of alliance most likely to succeed remains unclear. Global One, the much lauded venture linking France Telecom SA, Deutsche Telekom AG and Sprint Corp. of the United States, appears to be collapsing.
Outside players can also have an enormous impact on the industry.
In July, Olivetti SpA acquired Telecom Italia SpA, a company five times its size, as part of an effort to expand beyond its mobile phone niche. Many analysts questioned whether the leadership battle was in Telecom Italia's best interests. Another difficulty for prospective investors is figuring out the technology. Telecoms companies have changed beyond almost all recognition in the last decade, making it extremely difficult for even seasoned investors to assess the prospects of their multiple businesses. But striving to look or sound more like an Internet company doesn't necessarily pay off.