Week 47 left two heavy casualties, British operator KCom and Altice Europe. Italian microcap Tiscali was the week's winner. Excluding these outliers, the stocks in our European telecoms index moved within a fairly narrow range of up 7 percent to down 9 percent. Overall, our index lost 0.4 percent for the week, outperforming the EuroStoxx 50 index (-1.4%).
Quarterly reporting affected five stocks, or six if a profit warning at KCom, ahead of its Q3 report, counts as one. None of the reports were met with investor optimism:
- Mobile operators: MTS (-8.5%)
- Challengers: TalkTalk (-0.9%), A3 (-1.4%)
- Conglomerates: Altice Europe (-26%)
Infrastructure
TalkTalk also provided the market with an update on its fibre plans. Swisscom (+0.3%) was challenged by its unlisted competitor SFN to jointly expand fibre networks. Fastweb, Swisscom's Italian unit, came close to closing its 5G deal with Tiscali (+16%). In Russia, Rostelecom (+0.3%) and MegaFon (-1.2%) opened discussions to jointly roll out 5G. Other infrastructure-related news came from data centre operator Equinix (-2.1%), planning a major expansion in London. Telefonica Deutschland (+1.3%) announced that the integration of the O2 and the E-Plus networks is set for completion by the end of 2018.
Italy
TIM (+4.0%) had a new CEO appointed, formerly of CK Hutchison's Wind. He may lead TIM into the process of structural separation of its fixed-line network, a move that could cost up to 20,000 jobs, according to the unions. At the same time, the Italian mobile operators were still scrambling to respond adequately to Iliad's market entry of last May. Wind Tre did a promotion, and extended it to a wider base. TIM's sub-brand Kena launched a temporary offer, for Iliad and MVNO customers only. Fastweb's MVNO business expanded a plan and Vodafone (+1.1%)'s Italian unit did a one-day promotion on Black Friday.
YTD
Intelsat's year-to-date performance shrunk to a still admirable +623 percent, way ahead of two other satellite operators, Iridium (+91%) and SES (+37%). Altice Europe's YTD gain fell to +20 percent. The weakest shares YTD in our index are Tele Columbus (-68%) and Poland's Play (-51%). The largest shares in our index are far apart in the YTD view: +2.8 percent for Deutsche Telekom and -34 percent for Vodafone.
