Spectrum auctions, 5G and new entrants dominated the news in week 50, according Telecompaper. It resulted in a drop for the Telecompaper European telecoms index of 1.1 percent, versus a gain of 1.1 percent for the EuroStoxx 50 index. Polish Play (+12%) came out strongest last week, followed by Megafon (+8.1%) and Kcom (+8.0%). Three micro caps, Forthnet (-25%), Go Internet (-15%) and Tiscali (-9.4%), featured at the bottom end. The index heavy weights, Deutsche Telekom (-0.1%) and Vodafone (-1.3%), were in negative territory as well.
5G auctions
Vodafone had exposure in the Australian 3.6 GHz auction, through its Australian unit VHA, currently trying to merge with local TPG Telecom. The Swedish 700 MHz spectrum auction, another 5G band, ended dramatically by leaving CK Hutchison's (+0.9%) 3 Sweden empty handed. The company decided to pose a legal challenge against the auction outcome, which favoured Telia and the Net4Mobility joint venture of Tele2 (-0.3%) and Telenor (+2.7%). Further, Swisscom's (+0.3%) Fastweb ordered capacity from tower operator Cellnex (0.3%) for the construction of a nationwide 5G network. Elisa (+1.0%) signed a loan agreement for developing 5G in Finland and Estonia.
New entrants
In Italy and Switzerland a number of promotions can be related to new entrants. In Italy, where Iliad joined the mobile market in May, TIM ran a number of promotions. The previous week's offer from Vodafone Italy came with petrol discounts and this week's offer from TIM involved discounts on books and flowers. Vodafone IT added an offering with free night data. Tiscali was able to agree 4G network access with TIM, enabling it to launch a 4G service next year. In Switzerland the unlisted company Salt, which shares ownership ties with Iliad, entered the fixed-line market recently and ran a mobile promotion. UPC Switzerland, a unit of Liberty Global (-2.6%), isn't really a new entrant on the mobile market, but considering its small size it may appear like one. It ran a promotion on the fixed-line market.
On the M&A market Vodafone bumped into a roadblock created by the Australian regulator seeing competition concerns in the proposed merger with TPG, mentioned above. In Greece, Vodafone and Wind were named preferred bidders for Forthnet (-25%). Telia (+4.3%) and Turkcell (unchanged) agreed to sell their stakes in Kazakh operator Kcell. Spanish mobile operator and challenger MasMovil (+0.1%) acquired its distribution partner Bymovil.
In corporate news, the battle for control of TIM continued, this time Vivendi calling for a shareholder meeting. In the meantime, its opponent Elliott Management also took aim at Telefonica (+1.4%). At Veon (-2.6%) a new CEO was appointed and Megafon announced the squeeze-out of minority shareholders. The MasMovil stock was split 5:1 on 13 December.