Telecom Italia's announced debt reduction plans and revised outlook from Standard & Poor's, have analysts touting it as one of the best telecom credits in Europe. Last week, Telecom Italia announced plans to sell its 25% stake in Mobilkom Austria, which should bring in E700 million, and S&P revised the outlook on its credit ratings from stable to positive. "TI is probably one of the best names in the sector along with [British Telecommunications]," says Rick Deutsch, head of European high-grade credit research at BNP Paribas in London. He recommends the company's 61Ž4% of '12, because the steep curve makes the longer-dated paper a better value.
Analysts are less pleased with France Telecom and Deutsche Telekom. Despite DT's successful bond issue last month, there is concern about the company's willingness to write down debt. "They've broken out of the circle of the damned for the time being, but they'll get dragged back in," says one. And, FT's lack of clarity concerning its intentions for its stake in Wind, the Italian mobile operator, is not being well received. "They said they were going to IPO Wind and now they say they'll sell it back to Enel. It's disconcerting when they say one thing and suggest another," says another analyst.