Another fine mess from the tele­coms in­dus­try

The Sunday Telegraph - Money & Business - - Business - Christopher Wil­liams

There’s a grim logic to EE’S de­ci­sion to go to court over rights to 5G air­waves. If it did not, it risked al­low­ing Three to curb its am­bi­tions un­chal­lenged. Now, at least, the High Court will hear ar­gu­ments against cap­ping its share of ra­dio spec­trum, as well as im­pos­ing tighter re­stric­tions. When Marc Allera, its chief ex­ec­u­tive, says his hand has been forced, it is hard to deny. EE would have let the auc­tion go ahead un­der Of­com’s pro­pos­als, but the at­tack from Three aimed di­rectly at its fu­ture strat­egy and that of par­ent com­pany BT re­quired a de­fence.

The whole thing is a mess of a type the tele­coms in­dus­try has be­come very adept at cre­at­ing for it­self. Hun­dreds of mil­lions of pounds in le­gal fees must have been paid out in the last decade.

The stakes this time are higher, how­ever. Bri­tain’s sta­tus as a lead­ing dig­i­tal econ­omy is a key com­pet­i­tive ad­van­tage over our EU neigh­bours. Keep­ing up in the shift to 5G will be key to main­tain­ing it.

Months spent in the High Court will not help.

Com­mu­ni­ca­tion break­down

It hasn’t been a vin­tage year for re­la­tions be­tween big busi­ness and gov­ern­ment.

On this side of the At­lantic, Theresa May’s frosty ap­proach to Bri­tain’s top com­pa­nies won her few fans in the cor­po­rate world. She dis­banded David Cameron’s busi­ness ad­vi­sory group, pulled down the Down­ing Street shut­ters and lost touch with a vi­tal con­stituency.

Few pre­dicted Mrs May would dis­as­trously mis­judge the na­tional mood with her gen­eral elec­tion cam­paign, but per­haps more ad­vice from busi­ness peo­ple and less from pol­icy wonks might have helped.

Now Don­ald Trump has dis­banded his pan­els of chief ex­ec­u­tives. Or, more truth­fully, they have aban­doned him. The star­tling fact is that the pres­i­dent is now some­one with whom the boss of the Camp­bell Soup Com­pany is em­bar­rassed to be as­so­ci­ated.

The flaws and fail­ures of two un­usual politi­cians, with un­usual ap­proaches to busi­ness, might con­vince some chief ex­ec­u­tives their in­ter­ac­tions with the pub­lic sphere are just fine.

Many of those who re­signed from Trump’s ad­vi­sory groups said they had joined in good faith and had been shocked and disappointed by events.

Re­ally? Did they re­ally be­lieve they would be able to in­flu­ence the pres­i­dent? Amid his post-char­lottesville melt­down he tweeted that they were eas­ily re­placed. That seems fairly good ev­i­dence Trump placed no value on their views in the first place. If busi­ness lead­ers want to be heard they are go­ing to have to learn to speak up, rather than rely on po­lite dis­cus­sion be­hind closed doors. The out­pour­ing of Brexit-re­lated con­cerns from Bri­tish busi­ness in the wake of the gen­eral elec­tion was un­der­stand­able but too late. They should have joined in de­bates around the cam­paign, been straight with the pub­lic and made their voices heard.

No one owes big busi­ness a quiet life. No­body else is get­ting one for a while.

‘If busi­ness lead­ers want to be heard they are go­ing to have to learn to speak up’

China’s not done with deals

Sin­cere con­do­lences are due to in­ter­na­tional deal­mak­ers this week­end. The Chi­nese gov­ern­ment on Fri­day of­fi­cially killed off the mar­ket in mas­sive, head-scratch­ing deals that has de­liv­ered fat fees to in­vest­ment bankers for the last few years.

Never again shall we see a debt-fu­elled spree of ho­tel takeovers by a Chi­nese in­sur­ance com­pany. Foot­ballers hop­ing that some sort of wid­get maker in Guang­dong will buy their club and keep pay­ing their in­flated wages will be disappointed.

It is a shame, in some ways. The ac­quis­i­tive an­tics of An­bang, Wanda, Fo­sun and HNA Group have been en­ter­tain­ing, if noth­ing else.

Yet as our front page story about China’s rich­est chicken farmer mak­ing a £1bn play for North­ern Ire­land’s Moy Park shows, the days of Chi­nese takeovers are far from over. They just might make a bit more sense from now on.

Over­all out­bound deal-mak­ing by Chi­nese com­pa­nies is down 42pc this year, yet the value of takeovers in coun­tries such as Bri­tain that are tar­gets for Bei­jing’s new Silk Road ini­tia­tive are al­ready higher than across the whole of 2016.

No­body should be count­ing their chick­ens, but China’s in­ter­est in over­seas in­vest­ment ap­pears to be ma­tur­ing rather than wan­ing.

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