London Briefing:  Forget about online poker or dotcom mania mark two: the hottest stocks on the market right now are the dull, reliable and unglamorous infrastructure providers.

From toll roads to bridges, ports, airports and utility companies, the long overlooked infrastructure sector is at last enjoying its day in the sun, not just on the London market but worldwide. There has been a huge surge in merger and acquisition activity in the sector in recent months and, with the £8 billion (€11.9 billion) sale of Thames Water late on Monday night, that pace shows no sign of slowing.

Thames, which supplies water to eight million customers in London and the southeast of England, was put up for sale by its German utility owner RWE earlier this year. The auction sparked huge worldwide interest but, in the end, a consortium led by the Australian company Macquarie clinched the deal at a price that topped most analysts' estimates.

It is thought to have beaten off strong competition from Qatar's Investment Authority, the state investment arm of Opec member Qatar, which is equally keen to boost its infrastructure assets.

Thames Water is the latest in a flurry of acquisition activity from the Australian firm - just a few months ago, it bought the London bus operations of Stagecoach for £263 million and it was also interested in taking over airports operator BAA, which eventually went to the Spanish construction firm Grupo Ferrovial for £10 billion.

Other recent deals include last week's £750 million purchase of London City Airport from investor Dermot Desmond, who is said to have netted up to €960 million from the sale. He bought the airport for just €35 million in 1995 and, as with the Thames Water deal, the price from the AIG-led US consortium surpassed best expectations.

Recent data from Thomson Financial showed the value of infrastructure deals has soared to a record $178 billion (€141 billion) worldwide, far outstripping the previous peak of $52 billion reached in 2000.

Behind the rush for infrastructure providers is a renewed interest among investors in companies that operate in stable, regulated markets with predictable earnings growth and where returns are often set by the regulators.

But the steep prices now being seen in infrastructure takeovers are sounding alarm bells among some industry observers. When Frankfurt airport operator Fraport pulled out of the bidding for London City Airport last month, it said the price could simply not be justified.

And with Thames Water, there could be some comfort for the unsuccessful Qatar Investment Authority, which had been seen as front-runner to clinch the deal, in the form of a warning from UK water regulator Ofwat. Even as the finishing touches were being put to the deal, the regulator cautioned prospective bidders that the regulatory regime, which offers a return of 5.1 per cent on Thames Water, may not always be so benign.

Consumer groups have been fiercely critical of Thames for its dismal record on water leakage and for the hosepipe ban that is still in force and has been throughout the summer.

The last thing the regulator needs is to be accused of overseeing a lax regime that allows companies such as Thames to make easy money. The scramble by buyers prepared to pay big money for the company may just persuade the authorities they need to toughen up on their targets.

Too popular

There's no such thing as a free lunch and there's no such thing as free broadband either.

Customers of Charles Dunstone's Carphone Warehouse get "free" broadband only if they pay £20 a month for Carphone's fixed-line phone service, known as Talk Talk.

Despite that, the deal has proved popular with UK customers - far too popular. Carphone Warehouse has been struggling to meet demand and last week admitted costs of its offer would be £20 million higher than expected, totalling £70 million this year.

Complaining that the company has been "a victim of its own success", Carphone chief executive Charles Dunstone promised that the company would catch up with the demand that has seen 625,000 applications flood in for its integrated phone and broadband offer since April. But more than 200,000 customers remain unconnected and there have been hundreds of complaints from consumers unable to get through to the group's overwhelmed call centres.

There were complaints, too, from Carphone shareholders last week as its shares plunged in response to Vodafone's shock decision to stop selling its phones in Carphone's stores after 17 years.

Vodafone was one of Carphone's first two customers but has now decided to sign an exclusive deal with rival Phones4U. More than £450 million was wiped from Carphone's stock market value on the news, even though it insisted profits would not be affected by the move.

There is a risk that other mobile operators could follow Vodafone's lead and the implications for Carphone could be serious: it can no longer boast that it is a "one stop shop" for mobiles although, for the time being at least, it will still sell Vodafone's pre-pay packages.

Suddenly, 200,000 angry broadband customers seem the least of Mr Dunstone's worries.

Fiona Walsh writes for the Guardian newspaper in London