Week 20 in Telecoms, Internet, Media (UPDATED)

CORPORATE

• KPN: Telegraaf: EQT and Stonepeak still interested in offer
• Telefonica: Rumor: to sell Zeleris (logistics), wants EUR 100m, HIG Capital interested
• BT: Fitch: agreement with BT Pension Scheme (to meet part of its pension deficit repair plan through an asset-backed funding (ABF) structure) is broadly neutral to BT's leverage profile and rating
• CityFibre (West Street Infrastructure Partners = Goldman Sachs 35%, Antin Infrastructure Partners 35%): Rumor: to sell 30% stake for GBP 1b to ~20 pension & investment funds, to expand target from 8m to 10m premises 
• Vodafone
• 20/21Q4 prelim
• guidance 21/22: adj EBITDA AL EUR 15.0-15.4b, capex GBP 8b (raised), adj FCF >EUR 5.2b
• Strategy Update
• to apply for EU's Recovery & Resilience facility
• targets rev growth, adj EBITDA AL growth MSD, adj FCF growth FCF, leverage 2.5-3.0x, dividend minimum 9c
• focus on 1. Network investment (fixed & 5G), 2. stronger, more comprehensive product offering, 3. accelerate digital capabilities, 4. flexibility to support Vantage Towers
• Rumor: interested in co-investment with BT to build 5m premises by 2026
• VodafoneZiggo: Ziggo Sport to lose Formula 1 rights from 2021/22 season to NENT Group, rumored to pay >EUR 30m, to establish Viaplay, with Bundesliga football (currently at RTL NL); reaches 1.5m viewers
• Liberty Global
• CMA approves Virgin Media / O2 UK merger without remedies, to close 210601
• Establishes JV AtlasEdge Data Centres with Digital Colony to develop >100 edge datacenters in Europe, to close & launch 21Q3; for s 5G, gaming, IoT, edge compute applications; e Josh Joshi to be Exec Chair; Virgin Media UK & IE, Sunrise UPC, UPC Poland to be anchor tenants, open for 3rd parties
• Cegeka: Citymesh plans to expand mobile nationwide and into consumer market under new brand, to invest EUR 100m, to participate in upcoming auction (700, 900, 1400, 1800, 2000 bands)
• Iliad: 21Q1; delays fixed-line market IT entry to after summer 2021; expects Iliad IT to report positive EBITDA AL over 2021; to sell remaining 30% stake in towerco FR (On Tower France = Cellnex), >EUR 600m; to revise Op CF target for FR (excl B2B, originally EUR 900m) by Sep 2021
• Altice Europe: SFR acquires 50% stake in RegloMobile (MVNO France, 770k subs; = Afone Participations) from E Leclerc Group (retailer)
• 1&1 Drillisch: Finalises nat roaming (2G, 3G, 4G plus 2G, 3G, 4G, 5G MVNO; excl 4G in urban areas from 260101: 1&1 Drillisch 5G covered areas) deal with Telefonica DE, 5 yr; 1&1's subs to be migrated to own network after certain period
• Gamma Communications: AGM & 21Q1 trading update; outlook 2021: rev, adj EBITDA, adj EPS at high-end of range of market forecasts (rv GBP 442-461, adj EBITDA 86-94m, EPS 55-63p)
• Deutsche Telekom
• CMD (1)
• Targets 2021-24: rev CAGR 1-2%, adj EBITDA AL CAGR 3-5%, FCF >EUR 18b by 2024 (2020: 6.3b), EPS >EUR 1.75 by 2024 (2020: 1.20), pay-out ratio 40-60% of EPS (lower limit EUR 0.60); aims for sustainable growth
• 5 key action areas: 1. Turning customers into fans (leader in terms of customer experience in fixed, mobile, convergence; superior networks and best-in-class service), 2. Lead in B2B in Europe (rev CAGR 2% in DE and Europe; T-Mobile US to double market share), 3. A new level of sustainability (to become climate neutral in terms of its own emissions (Scope 1 and 2) by as early as 2025, from 2040, 10 years earlier than the original target, this will apply to the entire value chain (Scope 1, 2 and 3), management compensation contains components based on these targets), 4. Number one in fiber and 5G (FTTH penetration >60% by 2030, from 5% currently; to add 2.5m HP/yr from 2024; 5G coverage 97% pops coverage by 2024), 5. We continue to drive digitization (continue to digitize its business at all levels, 30 percent of purchases by customers in Germany to go via our electronic channels by 2024) 
• Strategic review for T-Mobile NL (preparing for sale) & towers
• CMD (2)
• Targets tech & inovation
• Targets T-Systems
• Group Development (US, BT stake, NL, Towers, DTCP): valuation T-Mobile US $76b, BT stake GBP 1.9b, GD Towers EUR 12.8b, T-Mobile NL EUR 5.7b incl towers 5.0b excl towers (reduced EBITDA AL EUR 30m) (based on broker estimates), own valuation EUR 6b (enterprise value)
• Targets T-Mobile NL ('Crown Jewel') YE 2024: 900k fixed subs, FMC penetration of branded base >40%, >50% of customer transaction digital
• GD Towers ('Kingmaker asset') targets 2024: add 6k sites, 15k site extensions, external rev CAGR >3% (3rd party business), lower opex/site; targets GD 2024: rev CAGR >2%, adj EBITDA CAGR >4%, cash contribution AL CAGR >6%
• AT&T
• To merge WarnerMedia with Discovery in all-stock, Reverse Morris Trust transaction
• Moody's affirms Discovery's rating (Baa3, outlook stable) and AT&T's rating (Baa2, outlook stable)
• NYT: Jason Kilar (WarnerMedia CEO) to exit
• Discovery CEO signs new contract until end 2027 - WSJ: Zaslav received 14.8m stock options worth $190m
• 8K filing
• SingTel: Plans impairment charge on Amobee (ad platform), Trustwave (cyber security), Optus (Australia)
• RTL
• Plans to merge M6 with TF1 (= Bouygues), exchange ratio 2.1
• Rumor: RTL BE for sale, to raise EUR 200-250m, candidates: DPG Media (also interested in RTL NL), Telenet/SBS, Rossel, IPM consortium
• RTL NL targets EUR 500m revenue over 2021 o/w 20% = EUR 100m from Videoland
• Vivendi: Reduces ambition for ownership of UMG after IPO 210927 of 60% from 20 to 10% (Tencent to retain 20%), may sell 10% to US-based investor or increase float to 70%; to retain 10% stake for minimum 2 yr; UMG 21Q1: rev EUR 1809m (+9.4%; recorded music +10.8%, music publishing +6.9%, merchandising & other -10.0%), EBIT 322m (+36%)
• Google: Bloomberg: Waymo plans to raise $4b, considers IPO

VIDEO

• Amazon
• The Information: to offer $7-10b for MGM (studio, channel Epix); Variety: to offer $9b (others expect $5b)
• libary of 4000 films (incl James Bond, Hobbit, Rocky/Creed, RoboCop, Pink Panther franchises) + 17k episodes (incl Stargate, Vikings, Fargo, The Handmaid’s Tale, Get Shorty, Condor, Fame, American Gladiators, Teen Wolf, In the Heat of the Night), unscripted shows (incl The Voice, Survivor, Shark Tank, The Real Housewives of Beverly Hills, The Hills)
• MGM 21Q1: rev $403m (+27%), net income $29.3m
• Variety: valuation $5-6b + debt, Eon Productions (= Broccoli family) control James Bond franchise, insist in theatrical release, refuse spin-offs
• NENT Group: Plans to launch Viaplay in NL 22Q1 as streaming ad-free SVOD service
• WarnerMedia: HBO Max AVOD tier (HBO Max With Ads)
• to cost 10 $/mo
• to launch in US early June 2021
• to exclude day-and-date Warner Bros movie premieres throughout 2021
• no ads against HBO originals; minimal ad load
• to produce equal margin to ad-free tier
• ad types: Brand Block, Pause Ad, Branded Discovery
• ad-free tier to expand to Latam/Caribbean end June 2021
• to upgrade HBO-branded streaming services in Europe to HBO Max 21H2
• Some HBO Max originals to be aired on TBS & TNT from summer 2021
• ViacomCBS: CBS plans addressable commercials for broadcast TV from 21H2
• Netflix
• Established division (events/spectacle team) focused on obtaining franchise rights; currently 90 shows in development based on already established properties across comics, books, manga, video games
• Rumor: plans expansion into videogames, ad-free, may be bundled with SVOD - Confirms expansion into interactive entertainment
• Vimeo: Launches enterprise-grade video hub

MUSIC

• Spotify
• Launches virtual concert series May/June 2021 (with The Black Keys, Rag’n’Bone Man, Bleachers’ Jack Antonoff, Leon Bridges, girl in red)
• Spotify for Artists publishes Fan Study
• Partners with Storytel (500k audioboks, 1.6m subs) to allow Storytel subs to connect their account through Spotify to access their audiobooks within Spotify’s app (based on Open Access Platform, to add more OAP partners)
• Amazon: Allows Amazon Music Unlimited subs (10 $/mo for Amazon subs, 8 $/mo for Prime subs, 15 $/mo family plan) free upgrade to Amazon Music HD (originally 15 $/mo); 70m tracks in HD (lossless, 16 bit, 44.1 kHz) o/w 7m in UHD (24 bit, 192 kHz), some upgraded to 3D Audio (Dolby Atmos, Sony 360RA)
• Apple: To migrate to lossless audio (ALAC; from 16 bit 44.1 kHz to 24 bit 48 kHz and24 bit 192 kHz) & spatial audio (Dolby Atmos) June 2021, price unchanged; total 75m tracks

WEB SERVICES

• Google I/O 
• Snap
• Partner Summit
• new services
• Spotlight paid out $130m since launch to creators (5400)
• reaches 500m MAU
• demos Spectacles gen 4 for AR creators (currently 200k, supports with $3.5m + $1m with Verizon for 5G-based AR): AR (dual waveguide displays capable of superimposing AR effects made with Snapchat’s software tools), 4 built-in microphones, 2 stereo speakers, built-in touchpad, Connected Lenses (allows multiple people to see and interact with the same scene in AR)
• launches Ghost (AR innovation lab)
• Acquires WaveOptics (AR display supplier, powers Spectacles), >$500m
• Microsoft launches personal (consumer) version of Teams: chat, video calling, share calendars, locations & files (online (teams.live.com) or app for desktop, Android, iOS) 
• Vodafone UK launches 3 packages for SME around Wix services (website creation tool): Get Selling Online (10.5 GBP/mo excl VAT; create presence, with payments), Peace of Mind Online (13; adds security), Supercharge My Business Online (22.4; adds Microsoft 365)

TELECOM SERVIVES

• Ziggo launches internet-only tiers: 75/10 Mb/s for 42.50 EUR/mo, 300/30 for 53, 600/40 for 60.50, 1000/50 for 65.50

NETWORKS

• Ookla Speedtest Global Index (April 21): global average FBB 102/54 Mb/s, MBB 53/13 Mb/s; FBB: Singapore #1 (246), S Korea #2 (242), HK #3 (241), Monaco #4 (220), RO #5 (214), NL #25 (153); MBB: UAE #1 (191), S Korea #2 (186), Qatar #3 (181), China #4 (149), KSA #5 (148), NL #9 (107) 
• GSMA calls on governments to allocate 6 GHz band (5925-6425 & 6425-7125) to 5G (at least 6425-7125 portion, 5925-6425 license-exempt; currently mostly for WiFi) for mobile, smart city, smart industry, smart transport
• Melita (first in Malta) launches 5G (in existing spectrum), nationwide, with Ericsson
• Sunrise UPC proposes 5G for Smart Buildings (using MR, AR) for Building Information Modeling (BIM); demos transparent building app from Builcon (MR glasses see through walls, enabling them to detect where pipes, cable routes and ducts run)

REGULATORY

• Platforms
• EU proposes unified corporate tax regime, based on OECD rules (to be agreed June 2021)
• US House Dems propose Social Media DATA Act: forces platforms to share data (ad libraries) with researchers and FTC (description of the audience that was targeted, information about how many people interacted with the ad, details about whether the ad was optimized for awareness, traffic or some other purpose); working group within FTC to establish best practices around social media research
• Apple: lawsuit Epic Games (Fortnite) vs. Apple ongoing