The end of the telecommunications investment bubble has put many of last year's takeovers and mergers under the spotlight. Now attention is turning to the biggest of them all - Vodafone's £113 billion sterling (€185 billion) takeover of Mannesmann.
This had looked smart compared with deals struck by rivals such as British Telecommunications, as it used highly rated shares as currency rather than saddling Vodafone with unsustainable debt as a result of paying cash.
Assembling the world's biggest mobile phone company to provide mobile Internet access seemed a winning formula.
But renewed scepticism about the growth potential of mobile Internet services has led investors to question whether Mannesmann - and Vodafone's string of other acquisitions over the last 18 months - were worth the fourfold dilution of existing shareholders' holdings.
Vodafone shares have fallen 18 per cent since it produced its annual results on May 29th, underperforming the sector, as analysts have reduced forecasts. This week the shares stood at their lowest since October 1998.
Some of the pricing pressure reflects a share overhang, with recipients of Vodafone paper cashing in. Large blocks of shares owned by KPN, Hutchison, BSCH and Telia are trickling into the market, while potential buyers remain wary.
On top of this is widespread pessimism about the business model that underpinned Vodafone's expansion. Recent warnings from Nokia, the largest manufacturer of handsets, have increased fears that the market for traditional voice services has become saturated.
At the same time, hopes that growth could come through the transmission of data via mobile phones, such as wireless Internet, have been hit by problems with third-generation services and GPRS. As a result, analysts' profit forecasts have fallen, with more cuts this week.
Mr Andrew Beale, an analyst at Deutsche Bank, said: "The overhang remains a major reason for the weakness, but many investors are also looking at Vodafone's longer-term prospects in a fundamentally different way." Mr Paul Brilliant at Morgan Stanley added: "The technical overhang is almost the least of the problems. A far bigger issue is the value to come from data and other value-added services. We have grown more cautious about this."
Vodafone remains emphatic that it did not over-pay for Mannesmann and believes analysts have become too pessimistic about the wireless Internet - just as they got over-excited around the time of the deal. "Nothing has changed in our business model to make us change our projections," the company said.
This may anger those who blame Vodafone for inflating expectations at a time when it had little strategic choice but to keep bidding, given Mann esmann's counter-attack on Vodafone's home market through its bid for Orange.
Yet it also raises questions about what would have to change to make Vodafone join Nortel, BT and other acquisitive technology groups in writing down goodwill shown in their accounts - £83 billion in the case of Vodafone.
Vodafone argues that since its assets are measured on a discounted cash flow basis, there is no impairment, because its fundamental business prospects remain as they were at the time of the deal. This looks increasingly like a minority view.
