The TP Stock Index European Telecom was down 1.2 percent in week 4. Vodafone (-8.3%) and Deutsche Telekom (-5.3%), the index's heavyweights, led the decline, according Telecompaper. Turk Telekom (+11%) was the week's winner, ahead of German microcap Ecotel (+7.4%) and Iceland's Siminn (+6.3%). Takeover candidates Forthnet (Greece, -14%) and Go Internet (Italy, -10%) brought up the bottom of last week's performance.
Vodafone in focus
Vodafone's bad news primarily included its trading statement for Q3, but that was not all. The acquisition of Liberty Global (+4.5%) units in Eastern Europe was delayed, as was the proposed merger with TPG Telecom in Australia. In India, the Vodafone Idea joint venture approved a rights issue. The Italian market proved challenging once more, prompting Vodafone Italia to launch several new propositions. Finally, the German market added to Vodafone's headache by moving towards a 5G auction that may very well lead to 1&1 Drillisch become a network operator, from a virtual operator today, while Freenet declined to take part in the auction. This would turn Germany into a four-operator market, just as it was before Telefonica Deutschland (-1.5%) took over KPN's (-0.2%) E-Plus. Good news for Vodafone came out of the UK, where it extended its network sharing plan with Telefonica's (+0.3%) O2 UK to include 5G. The companies also said that they would "explore a potential monetisation" of their UK mobile network joint venture.
Other news
Deutsche Telekom was hurt by the auction-related news in Germany as well. The company further reported on its network plans for 2019. The trio of satellite operators with an interest in US 5G spectrum did well last week, Intelsat (+6.1%), as well as SES (+1.9%) and Eutelsat (+1.7%). In M&A news, Rostelecom (+1.8%) was rumoured as a candidate for a bid for Tele2 Russia. Iliad (-4.1%) acquired a majority stake in B2B provider Jaguar. Telia reported its Q4 results and announced job cuts in several countries. Telefonica was selling its Central American units.
Year-to-date, our index is up 0.6 percent, behind the EuroStoxx 50's gain of 5.4 percent. Ecotel (Germany) leads with a 25 percent gain. Turkcell, Orange Poland and MTS are each up 19 percent. Several German shares are trading sharply lower since the end of 2018. They include 1&1 Drillisch (-16%), Telefonica Deutschland (-11%) and to a lesser extent United Internet (-5.8%). Freenet (+6.1%) however is doing well.