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Telecom capital market news: Merger and acquisition speculation looms

Given the ever-changing conditions of the telecom industry, it's wise to stop and take a look at the sector's capital markets activity, as stock fluctuations can provide a good indication of which way a particular company is trending. Here are a few of the most noteworthy events to occur recently within telecom capital markets.

Talk Talk stays the course
In the often contentious telecom stock market, sometimes it's good enough to simply hold steady. Such was the case recently for Talk Talk Telecom Group, which once again received a "neutral" rating from Citigroup Analyst Ratings Network citing the British telecom's price target at GBX 320, offering a potential gain of 2.73% for investors, according to Ticker Report. Consensus has yet to be reached on the long-term viability of investing in Talk Talk stock, with analysts from Oriel Securities, Barclays and Nomura all offering differing views.

AT&T outlook remains fuzzy
Wireless service providers remain locked in a seemingly never-ending game of one-upmanship, lowering prices in order to draw customers away from the competition. The ongoing battle between AT&T Mobility and Verizon Wireless for mobile market share is a fine example of this. According to The Motley Fool, this race to the bottom may be having an adverse effect on the companies' revenue streams and stock value. Recently, the stocks of both telecom operators fell more than 1% in a single day, which may have been precipitated by the flurry of discounts and promotional deals offered by the companies. The source cautioned that these actions could ultimately serve as a detriment to the telecoms' business.

"[I]f lower-priced plans don't bring in enough new customers to offset falling revenue, the moves could simply cost Verizon and AT&T money," The Motley Fool stated. "If that happens, then even a high dividend yield wouldn't be enough to keep investors satisfied for the long run."

Potential Comcast acquisition of Times Warner Cable raises concerns
The idea of large corporations consolidating their power and influence within a single market has typically caused some degree of consternation among consumers. Comcast’s recently proposed $45 billion acquisition of Time Warner Cable was widely greeted with similar skepticism, with many industry observers questioning the long-term effects such a transaction would have for the telecom industry.

Spencer Weber Waller, professor at Loyola University Chicago's School of Law, argued in a recent Chicago Tribune piece that if approved, the merger would threaten to stifle competition in the telecom industry. He noted that the resultant merged organization would account for just under 30% of all cable subscribers, stating that this figure was very close to the threshold set by the Supreme Court as the tipping point for being considered a monopoly.

Asia Pacific Telecom denies buyout talks
Speculation has mounted regarding a potential acquisition of Asia Pacific Telecom by the Ting Hsin International Group. According to Channel NewsAsia, however, officials from Asia Pacific Telecom recently denied these rumors. Despite the company's staunch denial, the speculation fueled a surge for its assets on the Taiwan Stock Exchange, increasing nearly 1% by the closing bell.

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