The Irish Independent reports that Ireland's biggest mobile operator, Vodafone, is to create 100 new jobs at a new International Customer Contact Centre in Leopardstown, Co Dublin.
There was competition from a number of the company's European bases to bag the jobs, according to a spokeswoman for Vodafone - but Ireland was chosen because of its sophisticated IT facilities and its highly-skilled staff base.
The centre will support global Vodafone customers on issues like roaming and coverage queries and device replacement and repair.
Vodafone Ireland announced yesterday that it has nearly 2m customers here after adding on 88,000 subscribers during the period to year ended March 2005.
Irish Vodafone subscribers continue to spend more on their mobiles than users in any of the other countries in which the company operates.
Blended Average Revenue Per User (ARPU) was €608 in the year ended March 2005 - the figure is twice that of Germany, 70pc higher than Italy and a 40pc premium to the figure in the UK.
The company said higher usage outweighed price reductions, adding that the amount of time spent by Irish customers on mobile phones was also the highest of all its businesses.
Vodafone does not strip out minutes of use (MOU) per country but said the figure here was up 6pc during the year.
Data performance also increased during the year and represents 20.8pc of service revenues, reflecting strong use of texting as well as the Vodafone Connect card and its Live! services.
The company will file a full set of results for its Irish business at the Companies Office at the beginning of next year.
New initiatives on the horizon in the Irish market include a service targeting users who just want a phone for voice and text services. Vodafone Simply will comprise two easy-to-use phones with straightforward price plans, according to the company.
Vodafone has already said that it will introduce lower-cost roaming services here over the next few weeks.
Commenting on the figures, Vodafone Ireland chief executive Teresa Elder said: "Irish customers are to the forefront in embracing wireless technology, and the mobile phone now commands an integral position in our daily lives."
Shares in Vodafone Group finished down 4.7pc at 139.5p in London yesterday. The company announced that group losses were down to £7.5bn from over £9bn the previous year.
The Irish Independent also reports that Campus Stadium Ireland Development (CSID), the National Aquatic Centre's landlord, has issued legal proceedings against the private company charged with operating the facility. The fresh legal action is the latest row to break out at the €70m centre.
CSID is suing Dublin Waterworld Limited (DWL) over its maintenance of the centre which has been dogged with controversy since before it opened.
CSID claims that DWL is not maintaining elements of the building correctly.
However, DWL is understood to be arguing that these issues are nothing to do with maintenance but relate to what it alleges are design and construction flaws in the building.
Neither side was prepared to comment on the dispute yesterday.
This is not the only difficulty facing the National Aquatic Centre, which reopened for business on Friday. Five months ago the roof blew off, and three separate reports have been completed into the matter.
These reports were commissioned by Rohcon, which built the centre, as well as the loss adjuster of the centre's insurance company, and the OPW (acting on the behalf of the ultimate owner of the aquatic centre - the Government). These reports are being discussed at present by CSID, Rohcon and the insurer, with a view to settling who will pick up the tab for the roof repairs.
DWL has previously indicated that when liability is determined it will be seeking recompense for lost earnings during the five months the centre was closed.
Yet another standoff involving CSID, centring on a disputed €10m VAT invoice, remains unresolved since the issue first emerged in the company's 2002 accounts.
CSID is seeking €10m from its tenant DWL based on what it believes is the valuation of the lease agreement between the two sides.
However, DWL - advised by KPMG - disputes this valuation, claiming that the VAT due on the lease is just a fraction of this figure.
Yet another row is also expected to appear in the Supreme Court later this year.
This relates to a long-running legal action taken by Dublin International Arena Ltd, a failed consortium which bid to build the aquatic centre, against CSID and others.
The Irish Times reports that Irish Ferries has emerged as one of the main beneficiaries of an obscure tax break which means it pays a nominal tax on its profits.
The company, which currently is at the centre of a controversy surrounding the level of wages paid to foreign contract workers, is estimated to have saved nearly €3 million in 2003 due to the scheme, which is known as tonnage tax.
According to documents prepared for the Government's tax strategy group in 2001, Irish Ferries threatened to move its operations out of Ireland if the Government did not bring in such a scheme, which has been approved by the European Commission.
There have now been calls from opposition TDs for a "full disclosure" by Minister for Finance Brian Cowen on the number of vessels qualifying for the scheme and its cost to the Exchequer.
The tonnage tax regime was highlighted in a Primetime Investigates documentary on RTÉ on Monday night which reported that a luxury Irish-owned charter yacht, the Christina O, could qualify for the tax break as it had been reclassified as a passenger ship.
Under the scheme, introduced in 2003, companies engaged in certain shipping activities can opt to pay 12.5 per cent tax on a "notional profit" or tonnage tax, which is based on the size of their ship.
The Irish Marine Development Organisation, a State agency established to promote Ireland as an international location for shipping activity, describes the system in promotional literature as giving companies a tax bill "that bears no relationship with the real profits generated by the company".
In the case of Irish Ferries, this notional profit is estimated at less than €20,000 for its four ships. The company, which is part of the Irish Continental Group (ICG), has been making profits before tax and exceptional items of between €24 million and €30 million in recent years.
In 2002 the group, which also includes other activities that do not qualify for the relief, paid €3.1 million in tax. In 2003, after the tonnage tax scheme was introduced, the tax bill had dropped to €300,000.
The Irish Times also reports that a new report, commissioned by four An Post unions, has rejected what it calls the "graveyard scenario" depicted by the company's management and questions the need for any further price rises.
The report, written by economist Paddy Walley, accuses the company of seeking price increases "based on an obsolete view of mail". The unions claim that pricing should aim to grow mail volumes, rather than just trying to grow margins on static or declining volumes.
"A number of price categories should be introduced to cater for a variety of mail types that serve customer needs and grow volumes and revenue," says the report entitled An Post - A New Vision.
The report also says that the Government should consider providing the company with an annual subsidy or compensation fund so that it can fulfil the terms of its universal service obligation (USO). The USO commits An Post to providing every citizen of the State with a postal service at the same rate, irrespective of where they live.
While management is seeking to trim the size of the workforce, the unions' report claims that new staff may be needed.
The report, commissioned by the four largest unions at the company, says An Post should do more to exploit new technologies. It suggests that internet cafes be situated inside some post offices.
"Internet cafes are mushrooming in every community and An Post has failed to exploit the opportunity that this demand could create for local post offices," it states.
It adds that the post office network should be developed into a "one-stop shop for financial, government and internet services in every town".
The report says that the international agreement governing postal deliveries between countries, known as Reims, is costing the company €6 million a year. It says the company should either renegotiate this agreement or withdraw entirely.
Yesterday, An Post management strongly rejected many of the claims made in the document.
It said that mail volumes were falling all over the industrialised world and the Republic was no exception. It added that, while the company supported greater levels of direct mail, one piece of conventional mail was worth the same amount as eight pieces of direct mail.
It also said the Communication Workers Union had a cap on deliveries of five items of direct mail per week per house. It rejected the idea it was deliberately using a "graveyard scenario" to describe the company's position.
The Irish Examiner reports that the Sunday Tribune lost almost €90,000 a week in 2003 and 2004, the latest annual report for the newspaper reveals.
The company blamed the losses on a costly redesign and promotions campaign aimed at improving sales at the ailing paper.
Pre-tax losses for the 18 months to December 2004 were €7.09 million, compared with a loss of €2.08m for the whole of 2003.
To keep the paper afloat its 29.9% shareholder - Independent News & Media - lent it €5.8m over the 18 months, an increase on the €2.2m it advanced to the Tribune in 2003.
Tribune Newspapers plc chairman Gordon Colleary said that the redesign had worked, with the paper gaining an extra 18,000 readers in 2004.
“All this was happening in a period of intense competition in the Irish Sunday newspaper market. CDs, books, free offers and more were the norm and we followed suit,” Mr Colleary said.
“The cost of doing so hit our bottom line in a very dramatic way, giving us an operating loss of over €6m for the eighteen-month period. Of this about one third related directly to the redesign, while the balance was spent on advertising, supplements and various promotions.”
Mr Colleary said the distribution of the paper in London and other European capitals had not proved successful as the paper had not appeared until Monday.
Turnover for the 18 months was €17.4 million compared with €10.9m for 2003 alone.
Retained losses grew to €37.2m from €30m at the end of 2003, while the balance sheet also shows a shareholders’ deficit of €11.2m.
Mr Colleary added that the paper was looking to bring its cost base back to 2003 levels, but said “it will not be easy.”
The paper has not been helped by management upheaval with the unexpected exit earlier this year of managing director and editor-in-chief Jim Farrelly.
His position has since been split, with former Independent executive Michael Roche becoming managing director and Evening Herald deputy editor Noirin Hegarty becoming editor.
The paper employed 74 people at the end of last year, an increase of six. Directors’ emoluments for the period were €232,000. Aside from Mr Colleary the other directors are listed in the report as Liam Healy, Brendan Hynes, James Parkinson, Andrew Donagher and Anne Marie Healy.
Mr Colleary is the largest shareholder in the paper with 32%. Glen Dimplex founder Martin Naughton holds around 8%.
The Tribune has faced stiff competition not only from Irish groups, but an increasing move into the market by British media groups. The Daily Mail has pumped considerable money into its Ireland on Sunday paper, though Rupert Murdoch’s Sunday Times remains the greatest threat to the Sunday Tribune.
“The cost of doing so hit our bottom line in a very dramatic way, giving us an operating loss of over €6m for the eighteen-month period. Of this about one third related directly to the redesign, while the balance was spent on advertising, supplements and various promotions.”
Mr Colleary said the distribution of the paper in London and other European capitals had not proved successful as the paper had not appeared until Monday.
Turnover for the 18 months was €17.4 million compared with €10.9m for 2003 alone.
Retained losses grew to €37.2m from €30m at the end of 2003, while the balance sheet also shows a shareholders’ deficit of €11.2m.
Mr Colleary added that the paper was looking to bring its cost base back to 2003 levels, but said “it will not be easy.”
The paper has not been helped by management upheaval with the unexpected exit earlier this year of managing director and editor-in-chief Jim Farrelly.
His position has since been split, with former Independent executive Michael Roche becoming managing director and Evening Herald deputy editor Noirin Hegarty becoming editor.
The paper employed 74 people at the end of last year, an increase of six. Directors’ emoluments for the period were €232,000. Aside from Mr Colleary the other directors are listed in the report as Liam Healy, Brendan Hynes, James Parkinson, Andrew Donagher and Anne Marie Healy.
Mr Colleary is the largest shareholder in the paper with 32%. Glen Dimplex founder Martin Naughton holds around 8%.
The Tribune has faced stiff competition not only from Irish groups, but an increasing move into the market by British media groups. The Daily Mail has pumped considerable money into its Ireland on Sunday paper, though Rupert Murdoch’s Sunday Times remains the greatest threat to the Sunday Tribune.
The Irish Examiner also reports that fruit importer Fyffes has reiterated that it expects double-digit earnings per share growth this year.
At the company’s annual general meeting in Dublin yesterday, chairman Carl McCann said market conditions remain favourable, particularly in continental Europe.
He said the company was also benefiting from the first contribution from its Swedish business Everfresh, which it acquired last year.
“The group continues to pursue price increases to address the lower margins being achieved in its UK/Ireland operations and the significant cost inflation being experienced by the industry.
“Given this positive start to the year, and notwithstanding the strong performance recorded in the second half of 2004, Fyffes is now targeting a double-digit increase in adjusted earnings per share for the full year in 2005,” Mr McCann told shareholders.
The Financial Times reports that pressure mounted on the European Central Bank on Tuesday to boost demand after the Organisation for Economic Co-operation and Development urged it to act immediately “by significantly cutting policy rates”.
The Paris-based international organisation, charged with improving the economic prospects of advanced countries, called for a 0.5 percentage point reduction in eurozone interest rates.
“It is of course a matter of central importance for the growth prospects of the countries involved but also, to some extent, for the credibility of the Economic and Monetary Union itself,” the editorial of the OECD's twice-yearly economic outlook said. The OECD also dropped the usual diplomatic language of international organisations in relation to the risks posed by growing imbalances in the world economy.
Cutting the growth forecast for all leading economies, Jean-Philippe Cotis, the OECD chief economist, told the Financial Times: “We're not saying there willbe a doomsday tomorrow morning . . . but because the adjustments [to global imbalances] are relatively slow, we are running the risk that an accident will happen. That's where we are.”
Mr Cotis added: “[A global adjustment] may happen, but late and at a less propitious time. Time is running out the numbers are getting big, big, big.”
The OECD forecast that the US current account deficit would continue to rise, hitting nearly $900bn (€715bn) or 6.7 per cent of US gross domestic product in 2006.
Wolfgang Clement, Germany's economics and labour minister, supported the OECD's conclusions about Europe, joining Italian ministers in urging the ECB to loosen monetary policy.
The ECB has insisted that a rate cut would be harmful and was not supported by sensible economists. Jean-Claude Trichet, the ECB president, told the European Parliament on Monday: “The last time we met, we were absolutely convinced that we would not improve the situation [with a rate cut] but that we would hamper Europe if we would go in the direction that is suggested by some.”
In an interview in today's Financial Times, Erkki Liikanen, governor of the Bank of Finland and a member of the ECB's governing council, reiterated the ECB's view that the next move in European rates would be up.
But now that the OECD, a bastion of orthodox economic thought, has flatly contradicted the ECB's position, Mr Trichet will find it more difficult in future to reject out of hand a discussion of lower rates.
In other areas, such as the need for lower government borrowing, the OECD's views chimed with those of the ECB.
The OECD's call on rates came after it concluded there was a “chronic pattern of weak resilience and divergent activity” in the eurozone economy and that “circumstantial arguments”, such as the Iraq war and oil prices were “not sufficient to explain the string of aborted recoveries in continental Europe”. It said: “What is badly lacking is sustained momentum in the eurozone.”
The FT says that China rejected on Tuesday a detailed prescription from Washington for a quick move to a more flexible exchange rate system, beginning with a 10 per cent revaluation of the renminbi.
The US proposal also generated scepticism from China-based analysts, who said a large one-off revaluation would run against the gradualist traditions of Chinese policymaking and undermine the government's mantra of exchange rate "stability".
A foreign ministry spokesman, in response to questions about a Financial Times report that the US Treasury had made a revaluation demand via unofficial envoys, said many US visitors had come to China recently carrying "such messages" about revaluation.
But he repeated Beijing's view that it would not bow to foreign pressure on the issue.
"China will not do this when internal conditions are not ripe, no matter how great the external pressure is," said the spokesman, Kong Quan.
China has long said it will dump the decade-old peg to the US dollar in favour of a more flexible exchange rate system, but it has not commented on the timing of such a move.
Ha Jiming, chief economist at China International Capital Corporation, the country's largest investment bank, said that, although the timing was right for a change in currency policy, 10 per cent was too large a move at the beginning.
"It remains too risky to relax the peg too much, so China may well start from a 5 per cent revaluation then repeg the renminbi to a basket of currency," said Mr Ha.
Zuo Xiaolei, chief economist with Galaxy Securities, said the currency had now become a political rather than economic issue, militating against a large move. "The making of decisions in China is mostly consensus-based . . . so that might lead to a compromise of a 3 to 5 per cent rise in the renminbi's value."
Andy Rothman, China strategist for the securities house CLSA in Shanghai, said a 10 per cent revaluation would be counter to China's incremental approach to reform over the past 25 years, "reinforced by the experience of the Soviet Union [which made rapid changes] and which the Chinese view as a disaster".
Stephen Green, of Standard Chartered in Shanghai, said a 10 per cent jump in the value of the currency would "be quite a shock for people, particularly when you have argued domestically that basic stability in the currency is the most important thing".
The New York Times reports that US home prices rose more quickly over the last year than at any point since 1980, a national group of Realtors reported yesterday, raising new questions about whether some local housing markets may be turning into bubbles destined to burst.
With mortgage rates still low and job growth accelerating, the real estate market is defying yet another round of predictions that it was on the verge of cooling. The number of homes sold also jumped in April, after having been flat for almost a year.
Nationwide, the median price for sales of existing homes, which does not factor in newly built ones, rose to $206,000 last month, up 15.1 percent over the last year and breaking the $200,000 level for the first time, the National Association of Realtors said. Adjusted for inflation, the median price - the point at which half cost more and half cost less - has increased more than a third since 2000.
"We've had robust markets before," said Maurice J. Veissi, the president of a real estate agency in Miami, who has been a broker for 30 years. "But this one is so much broader and deeper."
Even before this surge, housing prices had risen more steeply over the last 10 years than during any such period since World War II. A growing number of economists worry that real estate is to this decade what technology stocks were to the 1990's, with many people assuming that home values will rise forever.
Over all, home prices have never fallen by a significant amount, and Alan Greenspan, the chairman of the Federal Reserve, said on Friday that a national drop in price remained unlikely. But they have sometimes fallen sharply in certain locations, including New York and Los Angeles, and Mr. Greenspan, in his strongest warning to date, stated that some metropolitan areas were clearly showing signs of "froth."
Having been sanguine about real estate in recent years, Mr. Greenspan began to change his tone in March, when he cited some analysts' concern that the housing market might "implode."
Prices continue to rise most rapidly in the places where they are already highest, including Florida, the Boston-Washington corridor and along the West Coast. In the late 1980's, a typical house in San Diego cost about as much as two typical houses in Syracuse, according to the Realtors' association; today, someone could buy six Syracuse houses for the price of one in San Diego.
Prices have jumped most sharply over the last year in the West - up 21 percent in April from a year earlier, compared with an increase of 14 percent in the calendar year 2004. Price increases also accelerated in the Midwest, to almost 13 percent, while they remained roughly similar in the Northeast at 16 percent, and the South, where they are up about 8 percent compared with a year earlier.
In a separate report, the Census Bureau said Tuesday that the percentage of homes worth at least a million dollars had almost doubled from 2000 to 2003. California had the highest share of million-dollar homes in 2003, with more than 4 percent valued above that amount. It was followed by Connecticut; Washington, D.C.; Massachusetts; and New York, where an estimated 2.1 percent of the homes were valued at more than $1 million. Nationally, 1 percent are worth more than that.
"There's clearly speculative excess going on," said Joshua Shapiro, the chief United States economist at MFR Inc., an economic research group in New York. "A lot of people view real estate as a can't lose."
Until the April surge, the overall housing market had seemed to have reached a plateau. Economists, even some working for real estate lobbying groups, predicted that sales would decline a little in 2005 and prices would rise more modestly.
But even as the Fed has steadily lifted its benchmark short-term interest rate, mortgage rates have remained low. The average interest rate for a 30-year fixed loan is now 5.71 percent, down from 6.30 percent a year ago, according to Freddie Mac, the government-sponsored mortgage buyer.
Mortgage rates are closely tied to the market for long-term government bonds, which are benefiting from purchases by foreign governments, particularly in Asia, that continue to buy Treasury bonds, as well as from investors looking for a haven from risky corporate securities.
As the economy has gained strength this year, the still low rates and creative financing arrangements appear to have wooed a new group of homebuyers into the market. Some are trading up to larger houses, while others are buying a vacation homes or putting money into real estate simply as an investment.
"Mortgage rates are doing this," said David A. Lereah, chief economist of the Realtors' association. "They're near historic lows."
The number of existing homes that changed hands in April increased 4.5 percent, the biggest monthly gain since early 2004. Sales of condominiums, particularly popular among real estate speculators, rose faster than sales of free-standing homes. Condo prices rose faster, too.
To economists worried about a bubble, the growing gap between house prices and almost everything else - rents, incomes, population growth - is the surest sign of trouble. A typical apartment, for example, costs less to rent than it did five years ago, taking inflation into account, according to the National Real Estate Index, which is published by Global Real Analytics, a research company based in San Francisco.
The last time that house prices increased more than 15 percent over a 12-month period was in 1980, according to the Realtors' group. But overall inflation was also high at the time, helping to drive home values higher as well. Inflation has been modest in recent years.
Mr. Shapiro of MFR said that even a moderate rise in mortgage rates now had the potential to cause a price decline in some expensive markets. A rate increase would change the calculation for people buying residential real estate as an investment, he said, and could make other buyers realize that the recent price jumps could not continue.
But other economists predict that powerful demographic forces will keep prices increasing in most of the country. Many baby boomers are buying second homes, and their children - like many immigrants who have arrived in the last generation - are destined, in this view, to buy their first, continuing to stoke demand.
The NYT also reports that Warren E. Buffett struck a deal on Tuesday to buy the electric utility PacifiCorp for $5.1 billion from Scottish Power, his largest purchase in eight years. Sounding a bullish note for the energy industry in general, he promised to buy similar assets in the future.
Mr. Buffett, whose investing style has been scrutinized this year because of an investigation into the insurance industry, one of his longstanding favorites, said Tuesday that energy companies were a good fit with his company, Berkshire Hathaway, because they need capital and provide steady returns.
He also trumpeted an eagerness to do big deals and a willingness to look outside the United States.
"There is no limit to the amount of money we would have available for the right acquisition," Mr. Buffett said during a news conference in London about the PacifiCorp deal. "Frankly, the bigger, the better," he said. Berkshire Hathaway has more than $40 billion to invest at the moment, he said. "If you have a big one out there, try us out."
Berkshire Hathaway will also assume $4.3 billion in debt in the deal.
The purchase of PacifiCorp is Mr. Buffett's largest since Berkshire bought the General Re reinsurance business in 1998. That acquisition has not paid off as expected. A deal in 2000 between General Re and the American International Group is a focus of an investigation by government officials and regulators into transactions that made A.I.G.'s financial condition look better than it was. Mr. Buffett is not a target of the investigation, but he has cooperated as a witness.
In the deal announced on Tuesday, PacifiCorp, which provides electricity to 1.6 million customers in six states in the Northwest, will become part of MidAmerican Energy Holdings, Mr. Buffett's utility company, which is based in Des Moines. The purchase will create a company with $10 billion in annual revenue.
Energy will be "an important industry 10, 20, 50 years from now, and Berkshire Hathaway hopes to expand its investments" in the sector, Mr. Buffett said during the news conference, where he appeared by teleconference. "We will look at energy assets around the world," he said, and invest through MidAmerican. MidAmerican owns CE Electric UK in Northeastern England.
"The energy field is one that I basically like," Mr. Buffett said in a phone interview later on Tuesday. "It's not a business you can dream about, however. It's a capital-intensive business that provides decent returns. It's stable and it's predictable."
Scottish Power, which bought PacifiCorp in 1999 for about $10 billion, will record a £927 million ($1.7 billion) charge because of the sale, which is expected to close early next year. The deal is subject to regulatory approval.
PacifiCorp has been a disappointment to Scottish Power investors. The company, based in Glasgow, failed to increase PacifiCorp's revenue as predicted and said on Tuesday that the unit's earnings were below expectations. Over all, Scottish Power reported pretax profit of £1 billion ($1.83 billion) for the year ended March 31.
In November, Scottish Power started a review of PacifiCorp, which provides about half its earnings. Scottish Power executives said Tuesday that after looking at capital requirements and regulatory developments, they decided to sell the business.
"This cash-consumptive, low-return profile was clearly too much to bear" given the stronger performances of the company's other divisions, Merrill Lynch said Tuesday in a research report about the deal.
The company is a good fit for Berkshire Hathaway's investors, who have different needs, Mr. Buffett said. Unlike Scottish Power investors, Berkshire investors would rather see their profits reinvested than receive dividends, he said. Shares of Berkshire rose $2,010 on Tuesday, or 2.4 percent, to $85,500. Scottish Power rose 27.75 pence, or more than 6 percent, to 469.75 pence in London.
Some analysts said the PacifiCorp acquisition could be a precursor to a buyout of Portland General Electric in Oregon, which is owned by Enron. Both companies are based in Portland, and a combination could provide some savings. "It would make sense to own both of these utilities," said Doug Fisher, an electric utility analyst at A. G. Edwards.
Erik Sten, a Portland city commissioner , said, "Any effort to consolidate PacifiCorp and Portland General Electric would be a divisive issue and would bolster support by industrial customers for the city to take over Portland G.E." The city is negotiating with Enron to acquire the utility. Mr. Sten said the city could significantly cut rates because it would not owe federal income taxes and could raise capital more cheaply than any for-profit owner.
The PacifiCorp deal comes as a new wave of buyers are showing interest in utilities like water and electricity worldwide. Cash-rich investors looking for a place to park their money are attracted to the relatively unglamorous, generally highly regulated industries because of their steady returns.
The Bill and Melinda Gates Foundation was part of an effort to buy Portland G.E., which Oregon regulators rejected in March. Bill Gates serves on the board of Berkshire Hathaway and is Mr. Buffett's frequent bridge partner.
In Britain, local and American banks and private equity investors have bought up a large portion of the country's water industry. Private equity investors have been particularly drawn to the sector because the steady revenue allows them to take out hefty loans against the companies. Banks, meanwhile, can turn the steady stream of revenue into securities, which they package and sell to bond investors.
In the United States, utility companies, which operate as regulated monopolies, are trying to expand through acquisition after several quarters of streamlining businesses. But they face intense regulatory scrutiny and a long approval process, analysts said, which might slow future purchases.
"There is no doubt the industry is consolidating," said Paul Patterson, an analyst at Glenrock Associates in New York. "But I don't think there will be a wave of mergers. There are several barriers to entry, namely at the state and federal level, and there's been little recent track record of how the regulators will ultimately treat such mergers."
