Telecommunications

Telecom Italia stuck in activist feedback loop

11 December 2018

Top investor Vivendi wants to overhaul the Italian telco’s board months after a coup by rival Elliott. Regaining control looks hard and Elliott would remain a thorn in the French group’s side. Unless the two find common ground, a governance discount will weight on TIM shares.

Ericsson debacle exposes costs of anti-Huawei push

7 December 2018

The Swedish group’s glitchy software crashed some telecom networks. Yet it may grab market share, with its rival’s CFO under arrest and governments backing away from the Chinese company’s kit. A more concentrated market would mean higher prices and a risk of further big outages.

Three roads lead to three $830 bln-ish values

6 December 2018

Apple, Microsoft and Amazon.com are neck-and-neck as the biggest companies by market cap. The valuations of the mature iPhone cash cow, enterprise-software giant and e-commerce behemoth may be similar, but they reflect the rock-paper-scissors opportunities and risks each faces.

Huawei settles into eye of geopolitical storm

6 December 2018

Meng Wanzhou, the Chinese telecom equipment maker’s CFO, was arrested in Canada for allegedly violating U.S. sanctions. The case arises just as more countries put the squeeze on Huawei. Suppliers will be rattled, too. It may be a microcosm of a broader containment effort.

Altice wins most from $2 bln fibre sale

30 November 2018

Patrick Drahi’s debt-ridden telco needs cash to keep building fast broadband in quiet bits of France. Investors like Allianz will pay up for infrastructure-like assets. Selling a minority stake lets Altice lock in high valuations, while offloading some of the risk if fibre flops.

EU sends mixed signals to scale-hungry corporates

27 November 2018

Commissioner Margrethe Vestager may wave through a Dutch mobile merger but not the Siemens-Alstom rail deal. One decision hints at flexibility in the EU’s antitrust thinking. Still, politicians hoping to build regional champions to counter the U.S. and China will be disappointed.

MTN’s $8 bln Nigeria spat requires Goldilocks fix

26 November 2018

The African phone giant is close to ending a row with the West African nation over dividends. A face-saving deal will repair ties in its biggest market. After protesting its innocence, a reported $800 mln settlement looks excessive. But too little will keep MTN in Abuja’s sights.

French telco fight will become ménage à trois

22 November 2018

Three tycoons and state-backed Orange are bleeding each other dry in a mobile price war that shareholders despise and consumers love. Something must give in 2019. A deal of some kind between Iliad and Bouygues makes sense, if billionaire owners can set aside their egos.

Telecom Italia’s new boss faces old challenges

19 November 2018

Luigi Gubitosi has replaced Amos Genish as head of the Italian telco. With backing from activist investor Elliott, he will try to engineer a complex network breakup and sell assets. But bitter opposition from 24 pct shareholder Vivendi will make the strategy hard to execute.

CEO exit will escalate Telecom Italia brawl

13 November 2018

The board’s decision to sack Amos Genish reflects heightened tensions between activist Elliott and top shareholder Vivendi over the Italian telco’s future. Their next battle will be over the mooted breakup of the group. With competition at home, the timing could hardly be worse.

New Vodafone strategy signals telcos’ sorry plight

13 November 2018

CEO Nick Read wants to cut costs, ply existing customers with more products and may even sell a stake in a new unit that will manage towers. The plan will sustain generous dividends but is a sign that big telecom groups are banking on little sales growth in an era of 5G internet.

Writedown speeds reckoning for Telecom Italia boss

9 November 2018

A 2 bln euro goodwill charge dragged the Italian telco into the red in the third quarter, overshadowing a resilient operating performance. The group will also bust a debt target. The row between investors Vivendi and Elliott looks increasingly likely to force out CEO Amos Genish.

Carlyle dials up a smart way to double dip

8 November 2018

The private-equity shop made a killing on its CommScope LBO. Now it’s helping the embattled telecom-gear maker finance its $7.4 bln offer for Arris. The deal is highly leveraged and at the top of the cycle. Buying converts, though, gives Carlyle both protection and upside.

Naspers’ Vision Fund-lite carries less baggage

5 November 2018

The South African internet giant’s $8 bln answer to SoftBank’s mega-fund is quietly taking shape. Besides shunning the limelight, the Cape Town-based firm also lacks Masayoshi Son’s Saudi connection. Some of its early punts haven’t done too badly either.

New BT boss will be hostage to Brexit fortune

1 November 2018

The telecom company’s success at tempting clients to buy pricier connections is lifting revenue and profitability. The strategy may unravel and its pension deficit widen if Britain exits the EU without a deal. Incoming CEO Philip Jansen would then have to cut more costs quickly.

Japanese telecom titans get rude wakeup call

1 November 2018

The country’s big three carriers lost $30 bln in market value after NTT Docomo said it would cut prices. Scant details suggest the selloff may be overdone. With new rival Rakuten rolling out soon and a SoftBank IPO approaching, anxious investors are now bracing for the worst.

Hitachi clinches honourable Italy truce with Singer

29 October 2018

The Japanese giant is paying 12.7 euros a share to Elliott and others to buy out rail-signal group Ansaldo. After a two-year saga, the activist’s boss Paul Singer has secured a better deal. But Hitachi’s scope for further deals in a changing rail sector means it also gains.

Best to avoid answering call of Chinese telecom

29 October 2018

China Unicom, Mobile and Telecom delivered solid earnings growth this year and have mostly bucked the slide in the broader market. Valuations are cheap, they’re insulated from U.S. tariffs and a merger could help. The costly rollout of 5G, however, could offset those benefits.

New BT CEO’s task is to keep it simple

25 October 2018

Philip Jansen, the current boss of Worldpay, will run the 25 bln pound former phone monopoly. He lacks experience dealing with a regulator as fierce as BT’s and joins after a new strategy has been announced. His job will be limited to making as few unforced errors as possible.

AT&T has a satellite-TV reception problem

24 October 2018

The U.S. telecom operator splashed out nearly $50 bln for DirecTV in 2015. Since then, video profitability has eroded and efforts to get customers to take a new streaming product have stalled. The challenges may have implications for AT&T’s latest $85 bln addition, Time Warner.