Ohlson (1995) and Feltham and Ohlson (1995) provide a consistent framework for the valuation of accounting numbers, the latter capturing different properties of operating and financial assets. We test the empirical validity of these valuation models for the telecommunications sector of the British equity market using panel data techniques. Our empirical findings are not supportive of either model. We interpret our findings as evidence of strong competition in the British telecommunications sector eliminating the influence of abnormal earnings on share prices.