Answering the East's call

Article Abstract:

The Eastern European and Soviet telecommunication infrastructure is primitive by Western standards due to poor management, inferior technology, inadequate resources, and an aversion to free communication by the governments that formerly ruled the region's nations. The Telecommunications Research Centre (TRC) located in the UK estimates that upgrading the telecommunication systems of Eastern Europe and the USSR will cost $32 billion annually and a total of $350 billion. The TRC reports that Eastern Europe and the USSR will spend $15 billion in upgrading their telecommunication systems in 1990. Projected spending in the USSR for telecommunication systems is expected to reach $21 billion by 1995, which will make the USSR the most rapidly expanding telecommunication market in the world. The capital expenditures by Eastern European governments and the USSR represent a great market opportunity for Western telecommunication companies, and joint ventures involving local manufacturing will be the most likely venue for accessing the markets.

Economic aspects, Telecommunications services industry, Telecommunications industry, Eastern Europe, Telecommunications, Soviet Union, Telecommunication, Europe, Eastern

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Long on promise

Article Abstract:

The UK General Electric Co (GEC) and the German electronics and telecommunications manufacturer Siemens completed a hostile takeover of the UK electronics contractor Plessey in Nov 1988. However, due to the pressure of regulators, including the UK Department of Trade and Industry, Monopolies and Mergers Commission, and the Ministry of Defence, the German cartel office, and the European Community's competition directorate, the joint venture has not yielded the expected benefits in economies of scale the two firms hoped for. Rather than being allowed to jointly operate all nine of Plessey's businesses, the two firms are allowed to operate only two. Siemens is likely to benefit more than GEC over the long-term since the deal gave it 28% of the UK civil telecommunications public switching market.

Management, Europe, Mergers, acquisitions and divestments, Electronics industry, Siemens AG, Plessey Company PLC, General Electric Company PLC

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