The Telecompaper index of European telecoms shares fell 3.6 percent in week 51, underperforming the general market as per the EuroStoxx 50 index, which closed off 3.0 percent. Significant news items came in the M&A market and Spain. Of the 73 shares in our basket, just 17 are up for the year.
M&A, Spain
Deutsche Telekom's (-0.6% for the week) US venture T-Mobile US came closer to its planned takeover of Sprint, after denouncing Huawei equipment and receiving approval from a number of agencies. Liberty Global (-9.9%) announced another divestment, this time of its Eastern European DTH (satellite) business for just EUR 180 million. KPN (-2.8%) was rumoured to plan the sale of KPN International as well as its data centres. Swisscom (-1.0%) bought out a partner from its directory business and Rostelecom (+0.2%) sold an office building. Telefonica (-3.8%) sold a call centre stake.
Also in Spain, Romanian Digi (-11%) made plans for rolling out fibre to its target Romanian diaspora in parts of Madrid. Euskaltel (-7.0%) was planning geographic expansion in Catalonia.
Italy, Netherlands, 5G
In a new report, Telecompaper found that the Italian units of CK Hutchison (-3.7%) and Vodafone (-2.5%) were hit hardest by the market entry of Iliad (unchanged). TIM (-11%), armed with its low-cost Kena brand, was largely shielded off from Iliad's attack. Portfolio shake-ups continued last week, with offers from Vodafone, Wind Tre as well as TIM. Meanwhile, the fight for control of TIM continued with a new board meeting proposed by Vivendi.
In another new report from Telecompaper, Netflix was named as the number three provider on the larger Dutch TV/video market in revenue terms, behind VodafoneZiggo and KPN. Also, the Dutch government apparently came to the decision that its eavesdropping activities aimed at terrorists in the Middle East will have to be moved away ftrom its current location in the north of the country. This will free up the 3.5 GHz band for 5G services, once it is auctioned off. In Russia, Rostelecom (+0.2%) and Megafon (-1.4%) announced plans for a 5G tie-up.
YTD
Year-to-date, Intelsat's gain kept shrinking. Ever since its record high in October, when the YTD gain stood at 912 percent, the stock has been going down. Currently, the YTD gain is a still formidable 473 percent. Iridium is second, winning 45 percent since the end of 2017, ahead of Altice Europe's 39 percent jump. This year's poorest performance comes from a number of small and micro caps: Greek Forthnet (-69%), German Tele Columbus (-68%), Italian Tiscali (-61%) and German Freenet (-46%). Liberty Global (-42%) is the weakest of the large caps.
All in all, of the 73 shares in our basket, 17 are up for the year and 56 are down.
