Clouds on the European telecom sector.

Many analysts are predicting that European incumbent service providers will have to face worsen conditions in the near-term. Already it was known that their fixed line business was shrinking, hardly offset by the boom in high-speed Internet services. The survival fight will go a step further with fierce competition with cable companies to gain high-speed Internet subscribers. Furthermore, telcos with their new IPTV strategy are entering a business new to them, and adding costs and troubles. Voice was traditionally the cash cow for telcos, but with new companies offering VOIP and free Internet voice (Skype, ...), their profitability should be endangered a lot. Another threatening cloud is forming in the telco' shy. Their lucrative mobile voice business should be under pressure with the emergence of mobile VOIP, VoWLAN and other alternative solutions, as well as strong increase competition from new entrants and MVNOs. As a result, telcos' share prices are shrinking. The Dow Jones Stoxx index for European telcos is down around 6%, while the pan-European, all-industries Stoxx 50 index has gained around 19%.