Last week, the European telecoms stocks mostly moved into negative territory, led by Altice and Iliad. Telenet and most satellite shares had a positive week and with the help of the index heavyweights, Deutsche Telekom and Vodafone, an overall loss was avoided. Our index was flat for the week against a loss of 1.3 percent for the Eurostoxx 50 index.
Q2 results
Altice (-18%) reported on the latest results and had to fractionally lower its guidance, due to successfully adding subscribers. It also managed to sell part of its towers. Investors were not impressed and took the stock down, for six weeks in a row now. The year-to-date gain is still 83 percent, due to the spin-off of Altice USA. This is less than half of what the year-to-date performance was in June (+172%).Iliad (-11%) had to respond to rumours in the press about shedding subscribers in France, saying that it was only losing low-ARPU customers. The Q2 results are due September 4. The Iliad share is now back at the level where it first was in late 2012.
Iliad's business in Italy seems to going well, with ongoing competitor responses from Vodafone IT and its sub-brand Ho, as well as TIM's sub-brand Kena. Indeed, research showed that prices in Italy plummeted 20 percent since Iliad IT's entry in May. And CK Hutchison's (-0.7%) Wind Tre reported a 10 percent drop in revenues.
Superdividend, 5G and regulation
Telenet (+12%), under fire from activist shareholders, coupled its Q2 report with plans for a EUR 600 million superdividend. Forthnet (+15%), the Greek micro cap destined for a takeover, was the week's winner. Also, three satellite shares did well, Iridium (+5.6%), Eutelsat (+7.2%) and Intelsat (+8.6%), after reporting results. SES (+0.7%) could not move investors too much with news of seeking exposure to the 5G market through deals with mobile operators. More 5G news came from Germany, where United Internet (-3.0%) warned that the upcoming German 5G auction could disadvantage the company, should it wish to participate in the auction. More 5G news came from Swisscom (+1.7%), whose Italian subsidiary FastWeb picked up 5G assets from Tiscali (+6.1%).
NL: regulatory developments
In the Netherlands, the ACM's eye-catching regulatory framework, based on joint dominance of KPN (-4.6%) and VodafoneZiggo, 50/50 controlled by Vodafone (+2.7%) and Liberty Global (+4.2%), was sent to the EU. Vodafone meanwhile may have benefitted from activist shareholders seeking some control and the Indian regulator giving final approval for the Idea Cellular merger. Liberty Global was able to close the sale of UPC Austria to Deutsche Telekom's (+0.6%) T-Mobile AT. In turn, DT's share price may have found support from the US, where it's subsidiary T-Mobile US reported a strong Q2. The EU's decision on the proposed T-Mobile NL/Tele2 NL merger was postponed, possibly in relation to the new ACM regulation.
