There was no shortage of news and corporate actions in week 5, but on the whole the market moved up just fractionally. The Telecompaper Stock Index European Telecoms was up 0.1 percent, versus a gain of 0.2 percent for the EuroStoxx 50 index. Disregarding the outliers, Go Internet (+27%) and Tele Columbus (-14%), share price movements varied between +11 percent for Intelsat and -7.7 percent for Elisa.
Year-to-date, the TPSI European Telecoms is up 0.6 percent, lagging the EuroStoxx 50's gain of 5.7 percent. The heavy-weights Vodafone (-9.2%) and Deutsche Telekom (-4.1%) put a strain on the sector. The biggest winners include Turk Telekom (+28%) and Turkcell (+20%), as well as Liberty Global (+16%). Several German shares are performing particularly badly, such as United Internet (-10%), Telefonica Deutschland (-11%), Tele Columbus (-17%) and Drillisch (-18%). Iliad (-20%) is the weakest share in our index.
First of all, earnings season got underway with reports from several incumbent operators and more:
Incumbents: O2 CR (+2.9%), KPN (+9.0%), Telenor (-3.6%), Elisa (-7.7%), BT (-2.7%), Turk Telekom (+11%)
Cable: Euskaltel (unchanged)
Challenger: TalkTalk (-7.2%)
On the M&A front, rumours dominated.
KPN could be a target for a consortium of investors and pension funds.
A Swiss merger between Liberty Global's (+6.9%) UPC and mobile operator Sunrise (-2.5%) could be in the works as well.
More in-country consolidation may happen in Belgium, where regional cable operator Voo appeared to be going up for sale, with
Telenet (+2.6%) and Orange Belgium (-1.6%) possible candidates.
Altice Europe (-0.6%) was in the news first for being in the market for OTT TV provider Molotov. Next, it could be taking another step in the divestment of its infrastructure, this time by selling its Portuguese fibre network.
TIM (+5.2%) appeared willing to somehow merge its network with Open Fiber's FTTH network that is under construction throughout Italy.
Telenor faced investor pressure regarding the possible sale of its infrastructure.
Orange (+0.9%) acquired a cybersecurity firm.
Finally, Deutsche Telekom's (+0.8%) T-Mobile US talked up the benefits of its pending merger with Sprint.
Spectrum auctions, the next generation mobile technology 5G and the issue of new market entrants are all interrelated.
The upcoming German 5G auction faces four bidders, including challenger United Internet (-4.4%).
Deutsche Telekom claimed that banning Huawei could delay 5G in Europe.
TIM and Vodafone's (+1.3%) Italian unit are working towards a shared 5G network, according to press reports.
In Russia, the mobile operators MTS (+2.5%), Megafon (+0.1%) and VEON's (-5.2%) Beeline oppose plans for a shared 5G network.
France is organising a 5G auction late 2019/early 2020 and may award trial spectrum in the 26 GHz band.
According to reports, AT&T could be a new entrant and number four mobile operator in the Czech Republic, a market of three operators at present: O2 CR, Deutsche Telekom's T-Mobile and Vodafone's local unit.
Meanwhile, new propositions kept flooding the market in Italy, where Iliad (-3.3%) has been the new entrant now for almost a year. See the new offerings from TIM (here, here, here, here, here) and CK Hutchison's (-2.2%) Wind (here, here).
Capital market news came in different forms.
Telefonica (-2.3%) is planning a 'green bond', for funding 'green' projects.
Vodafone and Elisa announced new share buy-back programs.
Go Internet (Italy) completed its capital hike.
