Network expansion plans and takeover news helped a number of telecoms shares edge higher during week 2, but the overall sentiment was negative. The Telecompaper Stock Index European Telecoms ended the week down 1.4 percent, underperforming the EuroStoxx 50 index, which was up 0.9 percent. At the extremes were German micro cap Ecotel (+13%) and Germany’s 1&1 Drillisch (-15%).
Equinix (+5.0% in week 2 announced plans to build new data centres in Singapore and Hamburg, and InterXion (+5.4%) opened a new London facility. Iridium (+10.2%) was coming closer to launching ist important Iridium-8. Euskaltel (+8.0%) made plans for geographic expansion by providing services over Orange (-3.6%) Spain’s fibre network, while rumours of Orange planning an offer for Euskaltel surfaced. KPN (-2.9%) commenced a new phase in the roll-out of fibre-to-the-home technology, but investoers weren’t all too happy about its brand rationalisation initiative. Iliad’s (-3.9%) plans for further investing in Italy didn’t land well either. Meanwhile, portfolio adjustments were ongoing in Italy, with new propositions from CK Hutchison’s (+3.5%) 3 Italia, Vodafone’s (-3.3%) Italian unit and TIM’s (-1.1%) Kena brand. Also, a number of Italian MVNOs folded under the pressure of Iliad’s entry and the competition’s response.
Deutsche Telekom (-2.1%) suffered a set back from the governement shut-down in the US, causing a delay in the merger process of T-Mobile US and Sprint. T-Mobile US’s solid net customer additions in Q4 softened the blow. Russian mobile operator MTS (+4.3%) acquired a cloud service provider for some EUR 32 million. Bouygues (-2.5%) was also in the market for a B2B provider, as was Deutsche Telekom. DNA (-0.9%) took over a MVNO.
A number of operators was active on the bond market. Cellnex (+3.9%) was raising EUR 200 million, Turk Telekom USD 500 million, TIM was looking to raise EUR 1.25 billion and Orange was aiming for EUR 4 billion.