With the general market down sharply, as per the EuroStoxx 50 index (-4.1%), telecoms investors hardly fared any better last week (# 12). The Telecompaper European telecoms index lost 3.6 percent in week 12, including a few double digit losses. To make matters worse, winners were only to be found among the small caps of the telecoms sector, according Telecompaper.
Switzerland in focus
Swisscom (-7.8%) and Sunrise (-11%) suffered heavily from Salt's (unlisted) entrance into the fixed-line market, around a 10 Gbps box, the Apple TV box and content from Sky (-0.1%). Reports of Liberty Global taking an interest in Sunrise couldn't help the stock, apparently since a joint venture rather than an outright offer is being discussed. Salt's owner, Xavier Niël's NJJ Capital, has proven to be able to disrupt a market, notably the French market, through his company Iliad (-2.2%). He is also preparing an Italian launch, but this has been shrugged off so far by TIM's (Telecom Italia, -4.5%) investors. Shareholder pressure from activist fund Elliott managed to get the majority of the TIM board to resign.
Q4 results
Polish Cyfrowy Polsat (+1.4%) was among the week's few winners, after reporting Q4 results. Others closing the week up included Russian MegaFon (+0.4%), as well as British TalkTalk (+7.6%), Russian VEON (+2.8%) and Magyar Telekom (0.9%).
Altice (-11%) took a hit without significant news. Two more double digit losers were microcaps KCOM (-13%), based in Hull (UK), and German Ecotel (-13%), responding to the Q4 results.
Russian operator Rostelecom (-1.3%) held a Capital Markets Day but failed to get investors excited. German United Internet's (-6.9%) lost despite an upbeat Q4 report. Subsidiary 1&1 Drillisch (-4.4%) and competitor (-4.0%) went down as well.
Year to date: from VEON's -31% to MasMovil's +42%
In the year-to-date view, things obviously worsened but the extremes came a little closer. VEON is now at -31 percent and MasMovil at +42 percent. One third of the shares in our index have a negative performance year to date in the double digits. The double digit winners, apart from MasMovil, are TDC (+31%) and Sky (+29%), both subject to an offer, Intelsat (+31%) and MTS (+12%).
