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Explain this: a year ago, everybody was set to be a loser. Investors were paralysed by fear of a competition bloodbath between telecoms, cable, and satellite operators, leaving share prices in all three sectors in the doldrums. Now they seem to think all three sectors can be winners.

In the past year, shares in Comcast, AT&T and DirecTV, the biggest cable, telecoms and satellite operators, are all up by between 45 and 60 per cent. That has occurred while the timing of any real clash has got closer – telecoms operators are starting to offer video, while cable is ratcheting up internet telephony.

Why? Most obviously, operating results have been strong. Comcast has started to get its act together on internet telephony and is adding subscribers rapidly. At the same time, broadband continues to grow and bundling products together has even breathed some life back into its video business. AT&T has benefited from the flow of cost savings from its acquisitions, the continuing strength of mobile and less price competition in the business market. DirecTV, meanwhile, has jumped partly on overblown hopes that control will shift from Rupert Murdoch to John Malone, who will magically release a chunk of shareholder value.

However, the longer-term threats have not gone away. Telecoms operators will still have to compete aggressively to fill the new fibre they are laying with video, voice and broadband services. That means competing directly with the cable companies. Satellite will still end up fighting an increasingly painful war, against two big enemies instead of one, with inferior weaponry. Satellite cannot offer its own competitive broadband and telephony products alongside video.

Investors need to start being more discerning about the winners and losers. They have already penalised Verizon to an extent, which is making a bigger fibre bet than AT&T. And Echostar has underperformed DirecTV because it lacks the Malone factor. But such differentiation has further to go. Satellite operators look the most exposed when investors refocus on the risks ahead.

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