- Telecom companies are Europe's "sick man," marking the worst performance among the continent's sectors, and there's little encouraging news ahead, says Leila Abboud.
- An index of telecoms has showed up dead last in 2016, with 20% declines (accounting for dividend effects).
- Despite serviceable results from the likes of Vodafone (NASDAQ:VOD), Telefonica (NYSE:TEF), Telecom Italia (NYSE:TI), Orange (NYSE:ORAN) and Deutsche Telekom (OTCQX:DTEGY), investors are unimpressed and have driven the sector's overall value near a two-year low.
- Blocked acquisitions play a role, as EC chief Margrethe Vestager began blocking national mobile mergers.
- Even if the companies come through on sustained growth of market share and revenues, there may not be much to be gained: Enterprise values are around 6.2-6.4 times forward EBITDA -- not far below carriers in the U.S., around 6.5 times (but with quicker growing earnings).