Last week's telecoms market was characterised by limited volatility in share prices. The week's performance ranged between +6 percent and -6 percent, with just two outliers: Greek microcap Forthnet (-37%) and Russian MTS (+11%). Our index gained 1.3 percent, slightly behind the EuroStoxx 50 index's gain of 1.6 percent.
Major news was rather limited in week 37, and the biggest headlines came from the hardware sector, where Apple had an iPhone and Apple Watch event. In the data centre segment, Equinix (+4.0%) benefited from the appointment of a new CEO, and Interxion (+3.0%) raised its capex guidance in an effort to expand in Europe. Manx Telecom (+3.3%) of the Isle of Man was among the last companies to report on its Q2 numbers. Sky (+1.9%), to be taken private by either 21st Century Fox or Comcast, came in focus after a decision by the UK Takeover Panel. If the two potential acquirers fail to come up with a so-called final offer, Sky may become the subject of a sealed auction.
Italy in focus
Iliad's disruptive entrance in Italy still forces the other operators to adjust their offerings. Vodafone (+1.3%) Italia first launched a 20 GB bundle and later a 60 GB bundle, of which half can be used only at night. TIM (-0.1%) also came with an innovative plan, offering 50 GB only to current Iliad and MVNO subscribers. Meanwhile, the Italian 5G auction took off and by the end of the week the tally stood at EUR 2.8 billion. Activist shareholder Elliott Advisers defended itself against Vivendi's claims of mismanaging TIM.
Benelux dealings
In Belgium, a different activist shareholder worried over the governance of Telenet (+1.4%), majority controlled by Liberty Global (+5.9%). Telenet rejected the proposals, but will address its dividend policy at a later date, possibly at the company's Capital Markets Day on 5 December. Orange BE (+3.6%) reiterated its interest in regional cable operator VOO (unlisted). KPN (+3.0%) also announced plans for a Capital Markets Day, to be held 28 November. The company saw minority shareholder America Movil reduce its holding to 16 percent. The local merger of the Dutch branches of Deutsche Telekom (+1.1%) and Tele2 (-2.2%) hit a roadblock, as the EC declined to approve the merger without conditions. Now it is up to T-Mobile NL to come up with acceptable remedies.
Year-to-date: satellite and takeover candidates winning
In the year-to-date ranking of our European telecoms stocks, we still find Tele Columbus (-72%) and Intelsat (+588%) at the extremes. Looking at the ranking from a segment point of view, it becomes apparent that there is no clear correlation between segment and performance, with a few exceptions.
- Cable operators: generally down, except Sweden's Com Hem (+22%), to be taken over by Tele2 (+8.8%), and Euskaltel (+2.4%).
- Challengers are all down in double digits, from Italy's Go Internet (-10%) to Forthnet in Greece (-67%).
- Both conglomerates in our index are down: CK Hutchison (-7.1%) and Bouygues (-16%).
- The two data centre stocks show big differences: Equinix (-1.1%) and InterXion (+13%).
- Convergence players (fixed and mobile infrastructure) vary significantly, from Iliad (-43%) to Altice Europe (+66%).
- The same is true for incumbents, from Turk Telekom (-46%) to DNA (+21%).
- In the mobile segment, performances again are in a wide range, from Poland's Play (-40%) to Russian MegaFon (+10%).
- The satellite segment has postive YTD performances only, but also in a wide range: from Inmarsat (+0.7%) to Intelsat (+588%).
In the year so far, investors are mostly making profits on either satellite stocks or stocks that are subject to a takeover.
