The European telecoms sector slightly underperformed the general market in week 45, according Telecompaper. Our index ended the week up 0.3 percent, versus a gain of 0.5 percent for the EuroStoxx 50 index. MasMovil (-14%), buying back shares in a capital hike, was the week's weakest share. Freenet (-12%) responded negatively to its third quarter results. Inmarsat (-10.0%) was also weak on results, despite upgrading its full year outlook. MTS (+39%) was the week's winner, followed by Forthnet (+26%). We said goodbye to Com Hem (acquired by Tele2) and Sky (now part of Comcast) and added Gamma Communications, a challenger on the business market in the UK and the Netherlands, to our index.
A large number of companies published their Q3 earnings reports:
Incumbents: Turk Telekom (+8.4%), Deutsche Telekom (+2.1%), OTE (+7.0%), Magyar Telekom (+3.1%), TIM (-4.7%)
Cable companies: Euskaltel (+0.7%), Liberty Global (-1.8%), NOS (+3.1%)
Mobile operators: VEON (-3.1%), Sýn (-2.7%), Sunrise (-1.3%), Cyfrowy Polsat (+4.5%)
Satellite operators: Inmarsat (-10.0%)
Challengers: Freenet (-12%)
Tower operators: Cellnex (+2.4%)
Earnings, spectrum and divestments
Other than earnings, there were few themes for investors, last week. Spectrum was one, with developments involving Vodafone (-4.4%) in Ghana, roaming requirements in Germany and fixed-wireless licenses in Italy.
Fibre joint ventures were another, featuring Altice Europe (+4.1%) in a positive sense and TalkTalk (-8.6%) in a negative sense. Whereas the former appears to be getting closer to setting up a joint venture, the latter's attempts may fail. TIM (-4.7%) may also be setting up a fibre network alliance, with state-owned Open Fiber.
One final theme were divestments. Telefonica (+1.6%) sold its insurance business and may sell some of its data centres. Liberty Global (-1.8%) was rumored to plan the sale of its DTH business (satellite) in Eastern Europe, which is not part of the planned asset sale to Vodafone. On the latter transaction, the challenger association Breko urged for the sale to be blocked and the German regulator asked the EC to have a say on the proposed merger.
Year-to-date, Intelsat held on to its lead with a gain of 687 percent. Other satellite operators follow, albeit at a considerable distance: Iridium (+76%) and SES (+44%). Altice Europe (+72%) is among the best stocks, as well as the newcomer to our index, Gamma Communications (+28%).
Our index is down 12.7 percent YTD, versus -7.8 percent for the EuroStoxx 50 index.