The European telecoms marktet was particularly eventful in week 19, but a downturn couldn't be prevented on the overall market. The Telecompaper Stock Index (TPSI) European Telecoms Services was down 1.2 percent, against a 4.0 percent loss for the EuroStoxx 50 index. Iliad was the winner, on the sale of much of its tower portfolio, followed closely by the buyer Cellnex, with a string of deals in its pocket. Tele Columbus was the week's biggest loser, without significant news, losing 11 percent, followed by BT.
Earnings reports with extras
Iliad, Deutsche Telekom, Liberty Global, BT, the Zayo Group and Telefonica had their Q1 earnings reports out, and with these some significant M&A news came.
- First of all, Iliad (+11%) reported its Q1 results during a capital markets day, with a solid contribution from Italy, and sold a majority stake of its tower businesses to Cellnex (+11%). The latter also reported and was expanding its portfolio to a total of 45k towers. Also, Cellnex was in discussions with Salt (Switzerland, unlisted but part of Iliad's owner's empire), as well as with Orange's (-1.4%) and Vodafone's (-0.8%) Spanish units for further deals.
- Deutsche Telekom (-0.1%) also reported and rebranded its Austrian unit to Magenta Telekom, after the UPC takeover. Magenta seized the opportunity to reposition itself in the market, both in the consumer and in the business segment. DT's Dutch branch T-Mobile NL, the 75/25 joint venture with Tele2 (-0.6%), also reported and provided some details on its fresh fibre-to-the-home investment plan. Magyar Telekom (-1.6%) and OTE (-5.5%), also controlled by DT, reported too.
- Liberty Global reported, as did its 50/50 Dutch joint venture VodafoneZiggo, co-owned by Vodafone. The companies tried to move their European asset deal further by giving Telefonica Deutschland (-1.0%) wholesale access to Vodafone's cable network. In other German news, the 5G auction was possibly nearing the end now that United Internet (-3.5%)/1&1 Drillisch (-2.5%) was making a pull-back. Still, the latter appeared to be willing to sacrifice its dividend, as the auction proceeds neared EUR 5.7 billion.
- BT's (-7.8%) earnings report, with news of a consumer division restructuring, was accompanied by an expanded FTTH plan as well, with possible consequences for the dividend.
- The Zayo Group's (+5.1%) report was overshadowed by news of an offer for the group from private equity investors EQT and Digital Colony. The accepted offer was for 35 USD/share in cash, but the Zayo share ended the week at just USD 32.83. Takeover speculation had been circling the stock for some time.
- Telefonica (-2.5%) and its listed German unit Telefonica Deutschland reported and Telefonica agreed to sell a portfolio of 11 data centres.
More earnings and M&A
The week's other earnings reports included cable company Euskaltel (-5.7%), challengers MasMovil (+5.0%), Altice Europe (+3.2%), NOS (-3.2%) and Freenet (+5.2%), data centre operator InterXion (-1.0%) and fibre network operator Intred (+1.3%).
On the M&A front, Telenor (+1.9%) saw its DNA (-0.6%) acquisition move ahead with shareholder approval. The company also signed an agreement with Axiata to create a nine-market joint venture in Asia, with Telenor to hold 56.5% of the pooled assets. Both Orange and Swisscom (unchanged) did takeovers on the security market. QSC (-2.5%) sold its telecoms unit Plusnet, in line with previous announcements. Plusnet is good for about half of QSC's revenues, the sale turning it into an ICT services company. Telia's (-0.5%) proposed Bonnier Broadcasting takeover moved to phase two at the EU for an in-depth investigation.
