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More than 18 companies in the foreign telecommunications industry plan to raise funds in the capital markets in 1996. Many of the government-owned companies, such as Deutsche Telekom, plan to privatize in whole or in part, as well. Competition in international services has been proposed by Oftel of the UK. These stocks are not timely for 1996 as they are affected by restructuring, competitive pricing, and other pressures.

Demand for telecommunications is increasing in the Far East, both in fixed line and cellular services. Installation of 150 million lines is anticipated by the year 2000 costing $1500 each. The largest Asian market is China with a population of 960 million and a low ratio of access lines. This industry will underperform the market for 1995 and 1996, but has a large earnings potential for the year 2000 and beyond.

Global alliances and modernization are impacting foreign telecommunications firms in the 1990s. The U.S-China telecommunication volume is forecast to treble by 2000 along with increased calling between the U.S. and Europe. The telecom market in Germany, third after the US and Japan, will increase from $40 billion to $75 billion in the same period. Earnings from 1996 to 1998 will be held down by restructuring and competitive pricing.

Foreign telecommunications companies are not recommended for short-term investment, but various factors, including surging demand for information services and rapid technological advances, will favorably influence their long-term earnings and growth potential. Developing countries are building high-tech infrastructures where none existed before, and foreign telecom companies are providing the necessary financing. Return on that investment will probably not show until the next century. The transitioning market has led to low share prices, and an increase in those prices is not predicted to take place in the near future.

Foreign telecommunications firms will face greater competition, more regulation, international alliances and additional cellular communication services. The major conquest for telecommunication contracts by foreign firms is China because of its rapidly growing economy. China expects to invest approximately $100 billion in telecommunication equipment by the year 2000. High stock price performance is expected from Reuters, Ericsson and Vodafone in 1995.