Article at a glance:

Facing disconnection: Hard choices for Europe's telcos

Facing massive debt and skeptical shareholders, Europe's telecommunications operators are entering a period of painful change. As the industry restructures, only a few large integrated players will remain; others will have to reduce their emphasis on either wireless or data services—areas they once considered vital. But without taking the painful steps of shedding assets and refocusing, most European telecom companies will find their growth options blocked.

The take-away

Most European telecom companies resemble holding companies with majority interests in a variety of businesses. Over the next few years, this structure will change dramatically. Only a very few incumbents have pockets deep enough to remain integrated; most of the others will have to start shedding assets and abandoning activities.