Last week saw Cellnex agree a major takeover, while Vodafone kicked off a cost savings program and KPN potentially made a big shift in its commercial strategy. Overall, the European telecoms services sector performed well, as per our related index, which was up 2.1 percent in week 41. Still, this was significantly behind the EuroStoxx 50's sharp 3.6 percent rise. Forthnet (+16%) and Go Internet (-9.8%) were the micro cap outliers. BT's gain of 12 percent was the biggest large cap leap.
UK: Cellnex, Vodafone, BT
Some of the main news originated in the UK. Cellnex (-0.5% for the week) agreed to buy Arqiva's telecoms business, for which it needs to raise new equity. Vodafone (+2.2%) said that it would be eliminating 15 percent of its stores in Europe, while Vodafone Germany added to this a round of job cuts, as did Vodafone's Australian unit. BT (+12%) announced new products and services, as well as a new brand identity. The company further was looking to avoid overbuilding FTTP networks from Virgin Media, a unit of Liberty Global (-2.0%), and according to a newspaper report was suggesting to coordinate the roll-out of FTTP in the UK instead.
KPN and M&A
KPN (+2.7%), like BT, also announced a new commercial strategy, apparently moving away from maximising the number of services sold per household and instead providing its customers with more flexibility. In the data centre segment, Equinix (-2.6%) created a European joint venture with Singapore's GIC. TIM (+7.7%), according to market rumours, started working on a plan to spin off its Italian data centres in an IPO. According to a different rumour, TIM and Telefonica (+3.4%) could be taking over troubled Brazilian operator Oi, together with America Movil. In Switzerland, Sunrise is trying to get shareholders on side for approval of the proposed UPC Switzerland takeover, in some cases successfully, but not all cases.YTD: Altice Europe tripling
Year-to-date, a number of share prices are down double digits, led by Syn (Vodafone Iceland), down 42 percent. Tele Columbus so far lost 39 percent and Iliad is down 30 percent.
Forthnet, the Greek micro cap, is up 227 percent on continuous takeover speculation. It is followed by Altice Europe, up 203 percent or tripling its share price since the end of 2018.
