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Bank of England alarmed by telecom debts

Worries that speed of change makes it hard to assess long-term credit risk

The Bank of England will add its voice to warnings over the amount of borrowing run up by telecoms companies Thursday.

In its six-monthly Financial Stability Review, the Bank will warn that the huge debts run up by telecoms companies are a worry because of the speed at which the telecoms industry is changing. This makes it difficult for lenders to assess credit risk, reported the Daily Telegraph Monday.

Telecoms companies have spent billions of pounds in winning UMTS licences around Europe, which will allow them to operate third-generation (3G) mobile networks capable of video-streaming and location-based services.

However, experts have recently expressed concerns over the revenue-generating potential of 3G.

Take me to the ZDNet Road to 3G News Special.

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