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General

Last week in telecoms: rumours of a Deutsche Telekom/Orange merger, new action plan for Telefonica

Monday 2 December 2019 | 07:00 CET | News

There was major news concerning the largest incumbents of Europe, Deutsche Telekom, Orange and Telefonica, in week 48. Infrastructure dealings and a number of unlisted companies demanded some attention as well. The Telecompaper European Telecom Services index ended the week up 0.7%. The EuroStoxx 50 index was up 0.4 percent. As a result, the year-to-date underperformance of the telecoms sector was almost stable at around 14 points. There were two double digit winners, Tele Columbus (+28%) and Syn (Vodafone Iceland, +14%).

A merger of DT and Orange in the works?

Several incumbents were active rearranging their assets, possibly leading to a major merger in due course.

  • It was reported that Deutsche Telekom (+0.9% for the week) was exploring a merger with Orange (+1.2%). The latter denied, the former abstained from any commentary as it supposedly awaited a message from the German government.
  • Telefonica (+2.8%) decided to focus on four countries: Spain, the UK, Germany and Brazil. The other Latin American operators will be spun off. Its new action plan further contained plans to create two new divisions, one for technology and one for infrastructure. The former will focus on developing B2B services, underpinning the company's growth trajectory for the next few years.
  • The Proximus (-0.2%) board approved its transformation strategy, involving some 1,300 job cuts. This is, especially in Belgium, traditionally a difficult message for the trade unions. From within its ranks a new CEO was appointed.

Incumbents spinning off infrastructure

The incumbents last week were active updating their infrastructure portfolios, spinning them off to various degrees.

Uncertainty remains on US 5G spectrum

In the satellite segment, uncertainty around the value of potential US 5G spectrum persisted.
  • The FCC said that the major potential US 5G spectrum holders would be compensated for giving it up. This however couldn't prevent Intelsat (-14%) from continuing its downward movement. SES (-3.3%) was down as well, whereas Eutelsat (-0.7%) limited its loss as it reaffirmed its financial targets.
  • The Inmarsat (-1.2%) takeover was delayed.

Unlisted companies taking spotlight

A remarkable number of major deals involving unlisted telcos, and a US company expanding in Europe, occured last week.

Other news



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Categories: General
Companies: Altice Europe / Destiny / Deutsche Telekom / Eurofiber / Eutelsat / FCC / Inmarsat / Intelsat / Orange / Orange Belgium / Orange Spain / OTE / Proximus / QSC / Salt / SES / Tele Columbus / Tele2 / Telefonica / Telekom Romania / Telsis / Telxius / T-Mobile Nederland / Vivo / Vodafone / Vodafone Iceland
Countries: Europe
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