With the auction of Sky ending a long takeover battle, a spectrum auction in Italy going into overdrive and potentially explosive regulatory news from the Netherlands, the European telecoms sector proved to be anything but dull last week. Share price performance in week 39 ranged from a loss of 8 percent to a gain of 35 percent. Our index lost 0.5 percent, performing slightly better than the EuroStoxx 50 index (-0.9%). Intelsat extended its year-to-date gain to no less than 800 percent.
Auctions
The auction of Sky (+9.1%) left Comcast the winner, and Fox's new owner Walt Disney decided to sell its 39 percent Sky stake to Comcast. Sky will exit our index over the next few weeks. For the European market, the implication is that another player from the Americas enters the mass market.
The ongoing multiband spectrum auction in Italy, which includes some valuable 5G frequencies, reached total bids of EUR 5.8 billion. CK Hutchison's (-0.4%) Wind Tre missed out on the 700 MHz spectrum and is now among the highest bidders for the 3.7 GHz portion, together with TIM (-8.0%). Swisscom's (+0.0%) FastWeb appears to be mostly interested in the 26 GHz band, giving it very limited exposure to the auction's development. At the same time, Iliad's (-6.9%) Italian market entry still keeps the 'incumbents' of the mobile market busy, with new plans and promotions from Vodafone IT, Wind Tre and TIM.
In other auction-related news, Hungary now plans its 5G auction for Q3 2019, exposing Deutsche Telekom's (-0.1%) Magyar Telekom (-0.4%), Vodafone (-3.8%), PPF-owned Telenor and Digi (+0.3%). In Denmark, home to unlisted TDC, Telenor (-3.2%), Telia (-1.0%) and CK Hutchison's 3 Denmark, a multiband auction was delayed without any explanation from the authorities.
Regulation
In the Netherlands, open access to Vodafone and Liberty Global (-1.1%) owned VodafoneZiggo's cable network was confirmed by the regulator, and little seems to stand in its way now. Still, regulatory and legal procedures may push the advent of cable resellers to 2020 or beyond. However, sooner or later it may set off another round of price pressure, with implications for KPN (-2.7%) as well.
The regulatory framework, based on the concept of joint dominance of the incumbent and the cable operator, could form the basis for opening cable networks in other countries too. As such, it may function as a remedy for cable consolidation, currently in the works in Germany and Poland.
Results
The Greek challenger Forthnet (unchanged) reported its H1 results, whereas Digi looked ahead to its full year results, with an aim of crossing the line of EUR 1 billion in sales. Altice (+1.7%) owned SFR was confident to report solid Q3 subscriber numbers, helped by the Champions League.
The Q3 reporting season will kick off on 18 October with the merger partners Tele2 (-4.9%) and Com Hem (-3.9%).
Satellite
The satellite segment generally moved in positive territory, including SES (+15%) and Intelsat (+35%). Iridium (+12%) may have benefited from a partnership with Amazon's AWS for the creation of a satellite and cloud-based IoT platform. Intelsat's year-to-date performance grew to a gain of 800 percent, or a nine-fold increase since the end of 2017.
