The glory days of Europe’s telecoms providers as cash-rich, utility-like behemoths may be over. – FT.com

The walking wounded from the eurozone debt crisis are trickling into the emergency room. Among them are Europe’s telecommunications companies. The further south the company – mirroring the eurozone crisis – the greater the threat to total shareholder payouts as regulatory demands, market share loss, infrastructure investment and deteriorating economies erode profits. The glory days of Europe’s telecoms providers as cash-rich, utility-like behemoths may be over.

Telefónica is a good example. Spain’s incumbent has been a freewheeling payer of dividends. In 2003 it paid €0.25 a share; by 2011 this had risen to €1.60. But during the same period, net debt also rose from €20bn to €60bn, driven in large part by the acquisition of O2 in 2005. The ratio of net debt to earnings before interest, taxes, depreciation and amortisation rose from 1.5 to 2.9.

via European telcos – FT.com.