2010 was an active year for the telecom sector. The major players in the market maintained the level of their investments, particularly with the deployment of optical fibre in major metropolitan areas. Innovative services—3G, IP-TV, VoD, etc.—continued to develop successfully, particularly mobile broadband, which has made a significant breakthrough in Western Europe. Finally, the consolidation of the sector continued among operators and Internet service providers, reflecting the dynamic performance of the industry as a whole. Despite the turbulence in the financial markets and the background of global recession, the great majority of telecom players are achieving generally positive operating results.
In this context, the investments that we look for fall into two main categories:
The second type of opportunity consists of companies that are currently benefiting from the new dynamic performance of the sector, whose cash flow generation profile permits only a limited level of debt. The companies we look for are businesses that, in addition to having a top-rank management team and technology that is usually proprietary, have demonstrated their ability to increase sales rapidly and become leading global players.
Overall, we closely monitor changes in the sector and the recovery of investments in specific segments, particularly those related to voice-data-video convergence, and the development of new mobile services.