British Telecom and Other Telcos Face Pain From Massive Wireless Costs

BERLIN -- Europe may be only halfway through allotting licenses for third-generation wireless services in its four largest markets, but the region's major telcos are already reeling from the effects of the U.K. and German auctions.

Bringing in $35 billion and $50 billion respectively, the auctions in Britain and Germany have sent telcos scrambling for cash to help foot the bill for UMTS, or Universal Mobile Telecommunications System, the standard to be used in Europe for snazzy multimedia cellular services. With France and Italy still to distribute licenses, many of the biggest telecom operators are facing downgrades of their credit ratings from the likes of Standard & Poor's and Moody's.

Such downgrade concerns led British Telecom (BTY Quote) earlier today to postpone a roadshow for a $10 billion bond offering originally slated to begin Sept. 5. British Telecom evidently chose to wait for decisions by the ratings agencies before pressing ahead. ...