Research Paper on:
British Telecom and O2's Demerger

Unformatted Sample Text from the Research Paper:
are economies of scope and scale there are also diseconomies that may result form a company that is large. Larger companies may be less efficiently, slower to react and create  instability though the diversification in different, even if related sectors. The de-merger of BT and O2, formerly Cellnet, took place on November 19th 2001 (BBC News, 2001). The reasons  behind the de-merger are complex. Cellnet had been seen as a establishing influence on BT. There had been increased debt with the purchase of the third generation licences, which many  believe were overrated when they were purchased. This increased the debt burden and there were fears regarding the way that the poor operating performance of Cellnet would impact on BT.  In the five years before the de-merger the volatility f the BT share price was greater than the average for other similar blue chip companies and the performance of  the FTSE 100. There had been a high price of 1,358.5p and a low of 342p (BBC News, 2001). With the announcement of the de-merger the shares in BT  increased by 10% and the de-merged BT shares were being pre traded the week before the de-merger increased in this market value. The same was not true of the for  the o2 company, trading as MMO2, however this was seen in more volatile terms with speculation that de-merged the company would be weaker and the target of a takeover being  the 6th largest mobile telephone company in Europe (BBC News, 2002). With the results announced on the 19th November 2002 this industry may be seen as understandable, as after improvements  with increased revenue and more customers there was still a loss of ?277 million recorded (BBC Radio 4, 2002). It is also only in this quarter that the company saw