Week 17 in Telecoms, Internet, Media

CORPORATE

• KPN: FT: KPN rejected approaches from EQT/Stonepeak (offered 3 EUR/share = EUR 12.5b) and KKR interested in offer - KPN rejects both (EQT/Stonepeak gave no offer price), adds nothing to strategy
• Orange: Moody's assigns Baa3 to perpetual 8-year non-call deeply junior subordinated hybrid bonds (EUR 500m)
• Orange Belgium: Orange expands stake to 74.68%, extends offer to 210504
• VOO: To be put up for sale (50% + 1 share or 75% minus 1 share) May 2021, shortlist 210721, to sell by end 2021; Nethys (= Enodia) to hold controlling stake
• Sunrise UPC (Liberty Global): Plans 450 job cuts (13.5% of 3350 FTE) + 150 through attrition
• BT: Rumor: plans part sale of BT Sports, Amazon, DAZN, Disney, CVC, Silverlake interested - Confirms
• Verizon: WSJ: plans sale of Verizon Media assets (AOL, Yahoo), $4-5b - Bloomberg: to sell to Apollo Global Mgt, up to $5b
• Mediaset: Relaunches plan to establish MediaForEurope HQ in Amsterdam
• Apple: To invest $430b in US in 5 yr incl dozens of Apple TV+ productions in 20 states, add 20k jobs; plans new campus in N Carolina
• Endeavor: IPO price $24, trading starts 210429, symbol EDR - First trade $27.00, closes at $25.20

EARNINGS

• Proximus: 21Q1; confirms guidance 2021: domestic rev flat, EBITDA EUR 1.750-1.775m, capex <EUR 1.2b (excl spectrum, football rights), net debt/EBITDA <1.6x, div 1.20
• Swisscom: 21Q1; Raises outlook 2021: net rev CHS 11.3b (o/w Fastweb 2.4b), EBITDA 4.3-4.4b (o/w Fastweb 800m), capex 2.2-2.3b (o/w fastweb 600m), div 22 CHF/share; Partners with Salt on FTTH (P2MP), non-exclusive: Salt to have Layer 1 access (already in P2P) also in p2MP: to invest in own feeder & splitter (with IRU; reclassified from PPE to direct cost) and own drop (with IRU, reduces capex) based on dark fiber (classified as financial lease, lease payments to be wholesale rev), Swisscom in charge of construction & maintenance, postive for wholesale rev (+++), Op FCF (+++), EBITDA (+), FCF (+), negative for opex (--), capex (--)
• Telenet (Liberty Global): 21Q1
• Spotify: 21Q1
• Sony: 21Q1; aggressively pursuing investment in music segment
• Comcast: 21Q1; Peacock reaches 42m sign-ups; plans international roll-out, possibly with Sky
• Discovery: 21Q1; discovery+ reaches 13m subs (15m total D2C subs globally)
• Alphabet: 21Q1, YouTube ad rev $6.01b (+49% yoy; 2021E $29.7b based on analyst estimates), used by 81% of US adults, total usage 1b hr/days (Netflix 400m, based on analyst estimate); plans $50b SBB (Class C)
• Amazon: 21Q1, >175m Prime Video users, Twitch 35m DAU ; guidance 21Q2: rev $110-116b (growth 24-30%), oper income 4.5-8.0b (incl 1.5b costs related to COVID-19 and Prime Day to take place during 21Q2)
• Apple: 20/21Q2, total >660m paying subs (video, music, games, news)
• Microsoft: 20/21Q3; Teams 145m DAU, LinkedIn ad rev TTM >$3b, Xbox hardware rev +232% yoy
• Facebook: 21Q1; Instagram plans monetisation tools for creators
• Twitter: 21Q1; outlook 21`Q2: rev $980-1080m, GAAP oper loss 170-120m; outlook 2021: SBC $600m, capex 900-950m
• Pinterest: 21Q1
• Nokia 21Q1; total 160 commercial 5G deals o/w 63 live networks (ReefShark: 44% 5G shipments market share); maintains outlook 2021 (oper margin high-end of 7-10% range)

NETWORKS

• Broadband
• German BMVI Ministry expands BB funding (currently in white spots (max <30 Mb/s) to grey areas (max <100 Mb/s)
• CEBR for Ofcom (UK): FTTP will help 1m pops return to workforce in UK; nationwide FTTP would boost productivity by GBP 59b by 2025, Gross Value Added (GVA) impact GBP 25bn (1.3%)
• Ofcom: no-internet HH dropped to 6% (from 11% March 2020)
• 5G: GSA 5G Market Snapshot: 435 operators in 133 countries invest in 5G o/w 162 in 68 countries commercially launched (o/w 153 in 64 countries mobile, 54 in 30 countries FWA); 8 operators launched 5G SA (36 are planning to); total 5G devices 703 (incl 351 phones = 50%, FWA CPE 19%) o/w 431 commercially available
• FWA: Carmel Group report (Liftoff!) on FWA in US

SERVICES

• Video
• HBO Max (WarnerMedia)

• Content deal with NHL, 7 yr, rumored value >$200m: live hockey on HBO Max
• Rumor: HBO Max plans AVOD tier for 10 $/mo from June 2021
• SPI/FilmBox: Launches Filmstream app for Samsung TV Plus for Galaxy platform in UK
• The Teaching Co plans to launch Wondrium SVOD service (ad-free): factual, life-long learning (films, docu series, other; 7500 hr of content)
• Allen Media Group: distr deal for Local Now (local news, info, entertainment, weather from The Weather Channel; content from Reuters, AP, Lionsgate, Cinedigm, Pattrn, Cheddar, Bloomberg, Kevin Hart’s LOL, People.TV) with Verizon (FiOS STB integration)
• Music/audio/podcasts/radio
• Spotify

• Raises prices for new subs 210430
• Launches podcast subscription in US for creators on Anchor platform; Spotify to take 5% fee from 2023 for access to the monetization tool; distr deal with Facebook: in-app playback via mini-player
• Hardware: Amazon: Launches new tablets: Fire HD 10 (32 or 64 GB, from $150), Fire HD 10 Plus (4 GB RAM; $180), Fire HD 10 Kids (incl Amazon Kids+, case, parental controls, 2-yr guarantee; $200), Fire Kids Pro (incl Amazon Kids+, protective case, 2-yr guarantee; from $100); launches  Fire HD 10 Productivity Bundle (Fire HD 10 or 10 Plus + detachable keyboard case, Microsoft 365 Personal subscription, $220)

REGULATORY

• Platforms: EP adopts law forcing platforms to remove terrorist content within an hour of it being flagged
• Apple

• Sued in Germany in antitrust case over privacy settings of iPhones by 9 associations (representing Facebook, Axel Springer, etc)
• EC starts antitrust investigation over abuse of control over the distribution of music-streaming apps via Apple App Store (functioning as gatekeeper in mobile ecosystem), possible fine max 10% of annual rev
• Case by Epic Games starts 210503, over 30% App Store fees on in-app purchases - Epic claims App Store oper. margin 78% in 2019, Apple disagrees