Last week saw a solid performance for the European telecoms sector. Apart from a few stocks, the vast majority ended week 10 up. Double-digit gains were scored by TIM (+15%) and Cellnex (+11%), the former responding positively to news of the company accepting a fixed network spin-off and the latter venturing into the Swiss IoT market, according Telecompaper. Our European Telecoms Index closed the week up 3.1 percent, just ahead of the EuroStoxx 50 Index (+2.9%).
German consolidation
Other stocks faring well last week included a number or virtual operators across Europe, from United Internet (+8.7%) and Telefonica DE (+6.3%) in Germany, to TalkTalk (+7.2%) in the UK and Mobilezone (+7.1%) in Switzerland.
Telefonica DE benefitted from rumours of the company being put up for sale by its 69 percent parent Telefonica (+4.3%), while its 8 percent minority shareholder KPN (+2.5%) wasn't able to benefit to the same degree. Both 1&1 Drillisch (+4.6%) and its 73 percent parent United Internet were mentioned as possible suitors, but not the other large virtual operator on the German market, Freenet (+0.3%).
Q4 reports and investment plans
The small German business service provider QSC (-7.2%) came in at the bottom of our basket after announcing its full year 2017 results. Satellite operator Inmarsat (-5.0%) and Norwegian operator NextGenTel (-4.7%) also fared poorly after releasing results.
French operators Iliad (+6.2%) and Altice (+4.1%) were up on reports of their commitments to other European markets, Iliad to Italy where it intends to launch in the summer and Altice to Portugal committing to the Media Capital takeover and to some of its brands. Telia (+2.4%) and Turkcell (-1.0%) on the other hand said goodbye to their Azerbaijan joint venture Azercell.
YTD outliers further apart
Year to date, the performance of our telecoms index (-2.5%) almost equals that of the Eurostoxx 50 (-2.4%). The outliers have moved further away from each other, with top performer MasMovil now ahead 45 percent and Veon down 28 percent. There are 10 stocks up by double digits and 11 down in double digits.
The index heavyweights, Deutsche Telekom (-10%) and Vodafone (-12%) are a drag, while tier 2 operators have a varied contribution. They include CK Hutchison (+0.7%), operating as Hutchison 3 Europe and Wind Tre; data centre operator Equinix (-13%); the incumbents Telefonica (+0.5%), Orange (-1.8%), BT (-12%) and Telenor (+2.4%); as well as cable operator Liberty Global (-6.0%).
