BT, TIM and Vodafone warned their shareholders last week for business weakness, while KPN, Telekom Slovenije and Magyar Telekom conducted asset disposals. The KCom auction ended with Macquarie winning the company. All in all, the Telecompaper Stock Index European Telecoms Services ended week 28 down 1.4 percent, as the EuroStoxx 50 index lost 0.9 percent.
The telecoms business signaled a deterioration in the past week, exemplified by a number of developments:
- BT's (-3.2% for the week) chairman warned for a dividend cut if fibre investments were to increase.
- Vodafone's (-2.2%) CEO and CFO voluntarily cut their share rewards in light of the stock being down.
- Moody's downgraded TIM/Telecom Italia's (+1.0%) outlook.
- KPN (-1.4%) sold its international network assets, Telekom Slovenije (+0.3%) put its Kosovo unit up for sale and Magyar Telekom (+2.6%), itself controlled by Deutsche Telekom (-1.4%), disposed of its T-Systems Hungary subsidiary.
- Proximus (-2.8%) and Orange Belgium (+12%) decided to pool large parts of their mobile access networks into a new joint venture, to be established early 2020.
- Good news for Orange Belgium, explaining its share price upswing, but not so for Telenet (-7.4%) was the regulator's announcement of lower wholesale tariffs for access to Telenet's cable network.
The UK Takeover Panel was forced to stage an auction of KCom, since neither of the two parties interested in a takeover of the company came through with a formal offer. It was the Macquarie consortium (MEIF 6) that came out as the winner, with a final offer of GBP 627 million.
Meanwhile, United Internet (-0.6%) slightly raised its 1&1 Drillisch (+1.2%) stake to just over 75 percent. United further discussed board changes with Tele Columbus (-1.7%), in which it holds an almost 30 percent stake. Tele Columbus is among the worst performing shares year-to-date, down 32 percent. But, to be fair, United Internet (-24%) and 1&1 Drillisch (-31%) aren't doing much better.
Telefonica Deutschland (-8.3%) was the biggest loser in week 28 and as a result it now is the worst performer on a year-to-date basis (-33%). The best shares to own last week were Greek micro cap Forthnet (+22%), Orange Belgium (+12%) and Veon (+9.1%). Forthnet also leads in the year-to-date view, up 137 percent, beating Altice Europe (+78%) and Play (+62%).
