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Last week in telecoms: all eyes on Switzerland and Italy

Last week in telecoms: all eyes on Switzerland and Italy

Cyfrowy Polsat outperformed the entire European telecoms sector in week 6, with a gain of 7.9 percent. Tele Columbus, down 13 percent, was to be found at the other extreme. The Telecompaper European Telecoms index ended the week with a loss of 1.5 percent, slightly behind the EuroStoxx 50’s -1.1 percent.

Switzerland and Italy were responsible for most of the action, last week. ComCom, the Swiss regulator, raised CHF 380 million from a multiband/5G auction. Swisscom (-5.5%), Sunrise (-5.6%) and Salt (unlisted) each acquired spectrum. In a network test, the three MNOs scored the top ranking, an ‘outstanding’ assessment and significant improvement, respectively. Meanwhile, Freenet (-6.8%) once again supported a merger of its shareholding Sunrise with Liberty Global’s (+1.6%) UPC Switzerland, now that discussions between the merger candidates were confirmed. Further, Swisscom  and its Italian unit Fastweb reported on Q4.

In Italy, a possible tie-up of TIM (-2.5%) and unlisted Open Fiber moved to the next stage with the signing of a non-disclosure agreement. Wholesale fibre operator Open Fiber signed Maltese cable operator Melita (unlisted) as its latests retail services provider. BT (-0.9%), according to market rumours,  doesn’t have it easy selling BT Italia and is now forced to reduce its asking price. Newcomer Iliad signed a deal with Inwit (-0.4%) to use its towers for network expansion. Iliad was quoted saying that its entry in fact boosts sector investment. The latest commercial responses to Iliad’s entry include one offering from Vodafone’s (-0.1%) Italian unit, two from TIM and one from CK Hutchison’s (-0.4%) Wind Tre.

Other news included:

  • M&A. VEON (+1.8%) is trying to buy out shareholders from Global Telecom (Eqypt). Bouygues (-4.5%) may sell Axione to the TDF owners. Banks increased their Forthnet (+0.5%) stakes.
  • Spectrum. Upcoming 5G auctions were facing possible delays. Deutsche Telekom (-0.5%) considers going to court over the auction’s conditions and in Belgium the central and federal authorities couldn’t agree on how the auction proceeds should be divided. Meanwhile, Google and Charter were quoted saying they expected legal proceedings against the sale of 5G spectrum, held by the C-Band Alliance partners Intelsat (-5.7%), SES (-0.3%) and Eutelsat (-1.3%).
  • Capital. Digi (+5.8%) and DNA (+1.4%) were raising debt. A capital hike at Zegona (-2.3%) was approved, allowing it to increase its Euskaltel (-1.9%) stake.

Year-to-date the sector is down 0.9 percent, versus a gain of 4.5 percent for the EuroStoxx 50 index. Turk Telekom (+31%) and Turkcell (+19%) are doing particulalrly well, and so do Ecotel (+22%) and Liberty Global (+18%). The weakest shares are Tele Columbus (-28%), Iliad (-27%) and 1&1 Drillisch (-23%).

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