1. Introduction and Methodology

2. Growth Performance Review: driven by acquisitive international expansions

2.1. A lackluster performance on domestic markets
2.1.1. Unfavourable economics on legacy services
2.1.2. Marginal impact so far of innovative services
• Fixed mobile Convergence: keep it simple
• Content distribution: the revolution will not be televised
• Content production: say goodbye to Hollywood?
• Enterprise services: buying a know-how, at the cost of lower margins

2.2. Growth driven by international markets
2.2.1. International expansion through M&A
• Mergers and acquisitions have enabled European operators' international expansion
• …but catastrophic past experiences in terms of shareholder value performance have made investors very cautious about M&A in telecoms
2.2.2. M&A: an efficient yet expensive growth option

3. European operators' financial performance review

3.1. Operational efficiency: fewer margins, sustained investments

3.2. Investment intensity: the impact of networks upgrades

3.3. Capital efficiency: achieving more with less

3.4. ROIC: contrasted models but preoccupying evolutions
• Very different strategies can yield superior return on invested capital…
• …but the overall negative variation in return on invested capital over the recent years is worrisome

4. A Focus on Emerging Markets

4.1. Achieving high margins despite unfavourable environment

4.2. Success requires a regional approach

4.3. Operational performance: not only a matter of headcount

4.4. Commercial performance: driven by distribution and churn management
• Subscriber acquisition costs: roughly on par
• Prepaid Distribution: from street dealers to electronic couponing
• Prepaid churn management: minor improvements yield high rewards

5. Implications and Conclusions

5.1. Volume strategies
5.1.1. In emerging markets: expensive but efficient on a regional scale
5.1.2. In advanced markets: more than a zero-sum M&A game?

5.2. Value strategies
5.2.1. Creating value from a better segmentation
5.2.2. Enhanced connectivity provider
• Audience monetisation
• From SS7 towards SIP