Week 16 was heavy on M&A and auctions related news. The Telecompaper Stock Index European Telecoms Services ended the week up 0.4 percent, behind the EuroStoxx 50's 1.5 percent gain. Year-to-date, our index is strongly underperforming the broader market with a gain of just 6.4 percent, versus +16.6 percent for the EuroStoxx 50, according Telecompaper.
It was a rough ride for Tele Columbus (+13% for the week), leaving investors scrambling over the implications of the company's plans to attract external financiers to support the network overhaul. The Italian provider Retelit (+1.6%) announced somewhat comparable plans, to separate the network from the services division. Telefonica (+1.1%) came close to selling its datacenters. Bouygues (+2.9%) was buying out minority shareholders from Keyyo and Manx Telecom (unchanged) acquired Synapse 360. T-Mobile US, controlled by Deutsche Telekom (+0.4%), was rumoured to have to alter the terms for the proposed takeover of Sprint, while 24 market participants signed an open letter opposing the deal altogether.
Meanwhile, DT potentially was also impacted by both the US auction of the 24 GHz band, which ended its first phase, and the German auction, which paused for Easter. Challenger Freenet (+6.1%) opened talks with potential newcomer United Internet (+7.2%) for a wholesale access deal, should United be successful at the auction.
In the year-to-date view, Tele Columbus (-34%) is still the laggard. Other double digit losers include 1&1 Drillisch (-23%), Iliad (-21%) and Sunrise (-20%). Gamma (+48%) leads the sector, just ahead of Altice Europe (+48%), Iridium (+43%) and Inmarsat (+41%).
The index heavyweights have a mixed performance so far. They include Deutsche Telekom (+0.5%), Vodafone (-6.8%), Telefonica (+2.3%) and Orange (+3.3%), together representing roughly 30 percent of our index.