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In the late 1990s, the telecoms business – fixed income, equity, buy side, sell side, or I-banking – was one of the hottest Wall Street profit centres. In 1999, the telecoms research group at Salomon Smith Barney, headed by legendary analyst and dealmaker Jack Grubman, had more than 100 staff. By 2002, telecoms departments looked like ghost towns. Many analysts left Wall Street entirely, turning up in real estate and insurance. Fast forward to 2005, and the telecoms business might have come back to life. Driven by hedge funds recruiting for seasoned talent, a booming distressed debt market of 2003 and 2004 – much of which was telecoms related – and a revival in equity research, telecoms analysts are again in demand.
Headhunters throughout Wall Street have sprinkled employment adverts as sporadic interest for increasing telecoms staff rises on both sides of the street.
"When you have M&A deals occurring in the sector, investors think they can make more money with those same telecom assets. Research analysts must stand up and take notice about how they have to value those assets differently," says Gabriel Garcia, formerly a senior telecoms equity analyst at Deutsche Bank in New York and now at PricewaterhouseCoopers.