The next few weeks will be busy ones for investors looking to cash in on the new confidence in the telecom sector. Belgian national operator Belgacom is due to list its shares on the Euronext exchange within the next three weeks in an IPO set to be worth about €4 billion (US$4.86 billion), the largest in Europe for three years (see Belgacom Outlines IPO Timing).

The price range is to be set by Monday, March 8, at the latest, with the announcement of the final price and the start of trading set for Monday, March 22. The IPO is set to value the carrier, which will still be majority owned by the Belgian state following the listing, at about €11 billion ($13.4 billion). (See Euro Carriers Line Up for IPOs.)

In Ireland, privately-held Valentia Telecommunications has confirmed it will float a minority stake in national carrier Eircom Ltd. on the London and Dublin stock exchanges. Details are expected to be announced within the next two weeks. The initial tranche of shares will raise about €300 million ($365 million) and value the operator at about €3.5 billion ($4.3 billion). Further offerings of Eircom shares are expected to follow the initial listing.

Confirmation of the IPO, and Valentia's dividend plans in particular, was met by a downgrading of Valentia's credit rating by Standard & Poor’s (see Valentia Ratings Cut to BB+). S&P credit analyst Michael O'Brien says the payment of significant dividends, given the carrier's moderate free cashflow expectations, "is deemed aggressive." Eircom's latest financial figures, for the nine months to the end of December 2003, showed revenues of €1.22 billion ($1.5 billion) and EBITDA of €450 million ($547 million). Pre-tax and net income figures were not released.

It's not just Belgacom and Eircom that are looking to ride the wave of renewed interest in telecom stocks. Central European operator Cesky Telecom a.s. is to be privatized at some point this year, with the Czech government relinquishing its majority stake in the dominant national operator.

Ownership of the Czech operator will have changed considerably by 2005, compared with 2003. A joint stake held by KPN Telecom NV (NYSE: KPN) and Swisscom AG (NYSE: SCM) was sold to institutional investors recently (see KPN Gets Trendy); and fellow European operator TDC Tele Danmark A/S is interested in acquiring some of the Czech government's stake when it becomes available.

TDC already has telecom and media interests in the Czech Republic. It co-owns network operator and wholesale service provider Ceske Radiokomunikace a.s. and an ISP, Contactel s.r.a.

For investors that have faith in the potential of the Central and Eastern European telecom markets, Cesky could be among the most solid bets. It is aiming to position itself as a gateway for international traffic coming out of Eastern Europe, and has a solid financial position that is helped considerably by its mobile business (see S&P Affirms Cesky Telecom's A- , Cesky Outlines 2003 Results, and Eurotel Reports Strong 2003).

— Ray Le Maistre, International Editor, Boardwatch