Week 38 in Telecoms, Internet, Media

CORPORATE

• Telefonica
• Rumor: Edgardo Novick offers EUR 400m for Movistar Uruguay
• Fitch affirms BBB, outlook stable
• Orange BE: Launches mobile subbrand hey! for the digital-savvy, on 4G & 5G, 3 tiers: 1 GB + 60 min + 500 SMS for 7 EUR/mo; 10 GB + 200 min + unlimited SMS for 15 EUR/mo; 40 GB + unlimited min + unlimited SMS for 25 EUR/mo; OoB costs: 1 c/MB
• Liberty Global
• Virgin Media O2: Strategy update, 4 pillars: 1. keep commercial momentum, 2.operating as one company, 3. data generated on networks, 4. expanding & upgrading networks with fibre & 5G
• Sells UPC PL (3.7m HP, 1.5m customers, 1.3m bb subs, 1.4m TV subs, 600k FT subs) to Play (= Iliad), PLN 7.0b ($1.8b) enterprise value, net cash proceeds $600m (after debt repayment), to close 22H1; valuation 9x 2021E adj EBITDA or 20x 2021E op FCF; Liberty Global to provide Play with certain transitional services (network, IT) for max 4 yr
• Xavier Niel
• Iliad: Play acquires UPC PL (2020 rev EUR 1.698b, EBITDA AL EUR 757m, capex EUR 451m; 3.635m HP in 150 towns in 8 regions (o/w 100k FTTH, rest Docsis 3.1), 1.525 BB+TV subs, 1.309m BB subs, 1.4m TV subs, 600k FT subs, 105k MVNO subs on Play; offers 4K STB from Apollo, Smart WiFi, aggregator) from Liberty Global, PLN 7.0b (EUR 1.53b) enterprise value, to close 22H1; pro forma 2020: rev EUR 1.96b, adj EBITDA AL EUR 697m; valuation 9.3x EBITDA AL 2020 or 7x after rev & cost synergies; Liberty Global to provide transitional services (network, IT) for max 4 yr; Iliad leverage pro forma at 210630: 3.1x pre-synergies (actual: 2.75x); pro forma market positions: #2 in mobile, #2 in fixed; targeted run-rate synergies EBITDA AL impacts: EUR 10-30m from rev (cross selling, FMC), EUR 30m from opex (SG&A, network & IT)
• Salt: Bloomberg: cancels IPO plan
• Altice Europe: SFR acquires Coriolis (fixed + MVNO on SFR & Orange; 500k consumer + 30k business subs), EUR 415m (o/w 117m deferred), to close 22H1
• Tiscali: Strategic Plan 2021-24: net profit break-even 2023, consumer focus on FMC (fiber + mobile 4G); portal to focus on e-commerce & comparison; target 2024E rev >EUR 200m (+40% in 3 yr), EBITDA to double in 3 yr, margin 25% by 2024; to issue EUR 21m convertibles to Nice & Green
• Vivendi
• UMG prices IPO at 18.50 EUR/share = EUR 33.5b reference price
• Spin off of 59.87% of UMG (global #1 recorded music, #2 in music publishing) by Vivendi in IPO in Amsterdam, without issue of new shares; Vivendi retains 10.13%, Tencent 20%, Pershing Square 10%; opeining price EUR 25.25 = EUR 46.3b valuation - Closes at EUR 25.10 = EUR 45.5b
• Distr ratio 1:1 for UMG (59.87%); Vivendi retains 10.13%
• Canal+ acquires 70% of SPI Int (Film1, FilmBox, DocuBox, FightBox, Docustream, Diz, Kino Polskai; total 72 TV channels); Canal+ currently 22m subs in 15 countries, target 30m by 2025
• Canal+ raises stake in DStv (ZA) to 15.37%

FIBER NETWORKS

• Liberty Global Ventures establishes 50/50 JV Liberty Networks Germany with  InfraVia Capital Partners; modular approach: to start with small number of munis [InfraVia co-owns fiber JV IFT in FR with Iliad
• Deutsche Telekom: Higher Court Dusseldorf overturns BNA approval of Glasfaser Nordwest (JV with EWE) [see 200115]
• TalkTalk: Acquired stake in Freedom Fibre

SERVICES

• DStv (= MultiChoice; DTH) launches FWA service in ZA as MVNO on MTN: 200 ZAR/mo for 50 GB, 480 ZAR/mo for 220 GB, 800 ZAR/mo for 440 GB; choice of 2 routers (ZAR 1300 or 1800); data divided equally over anytime and night-time; bundles with Pay-TV services (DStv Access, Family, Compact, Compact Plus, Premium)
• Megafon (Russia) launches Megafon Plus (also for non-subs): bundle with OTT services ivi and Start (video), MyBook (e-books), SberZvuk (music), 400 RUB/mo

VIDEO

• Conviva State of Streaming: Content Discovery report: word of mouth (59%), advertising (52%), social media (49%), streaming service recommendations (43%)
• Netflix
• Launches game Eden Unearthed based on series Eden for Oculus Quest
• Acquires Roald Dahl Story Co (Willy Wonka, Matilda, James and the Giant Peach etc); to create a universe across animated & live action films & series, publishing, games, immersive experiences, live theater, consumer products, etc
• TUDUM global online fan event [see 210825]
• Walt Disney
• Expects Disney+ subs growth 21Q4 to be LSD qoq; currently 61 films + 17 series in production; Disney+ to expand to HK 211116, SK & Taiwan 211112; movies Jungle Cruise, Home Sweet Home Alone, Shang-Chi and the Legend of the Ten Rings, short The Simpsons, series Olaf Presents, Pixar short Ciao Alberto, season 2 (first 5 episodes) of series The World According to Jeff Goldblum (NatGeo), Star Wars special, Marvel Cinematic Universe special to premiere on Disney+ 211112 (Disney+ Day); original series Dopesick (Michael Keaton) to premiere 211112 on Hulu (US) & Disney+
• Disney+ promo: relaunches 7-day free trial period in US to select prospects (rumor: 500k)
• ViacomCBS: Launches Showtime (11 $/mo) & Paramount+ bundles: with Paramount Essentials (5 $/mo) 10 $/mo, with Paramount Ad-Free (10 $mo) 13 $/mo - To focus on 45 day theatrical window for major releases (A Quiet Place Part II, Top Gun: Maverick, Mission: Impossible 7), day&date releases for family films (PAW Patrol: The Movie), direct-to-streaming for lower budget films (Infinite); currently 900 series in development, to expand Paramount+ and Pluto TV internationally
• NENT Group
• CMD
• plans Viaplay expansion to UK (22H2), Canada, DE, CH, AT (2023) with entertainment offerings (may add sports), total 16 countries YE 2023, target 12m Viaplay subs YE 2025 o/w 6m from int markets
• Price US (launch 21Q4): 5 $/mo
• To launch in NL with 5,800 hr of movies & series (incl. originals (total 135 so far) & kids); plans local originals; plans Formula 1 Studio Amsterdam production
• NENT Group target CAGR 2021-2025: rev 18-20% (upper end) o/w 13-15% (upper end) in Nordics (Viaplay Nordics 23-25%); target EBIT margin Nordics 15% in 2025 (long term 20%), int prositive from 2025, 15% in 2026 (long term 25%); total expected losses on int ops SEK 3.8b (fully funded)
• Extends rights to NTT IndyCar Series motorsport until 2024 for Nordics, Baltics, PL

HARDWARE

• Amazon: Launches 3 new Kindles (6.8 inch screens each): next gen Kindle Paperwhite (300 ppi, 8 GB, $140) & new Kindle Paperwhite Signature Edition (32 GB, $190) & new Kindle Paperwhite Kids ($160); ship 211027
• Microsoft: Surface event: expands Surface portfolio:  new Surface Laptop Studio (from EUR 1800), redesigned Surface Pro 8 (from EUR 1250), new Surface Go 3 (from EUR 440), Surface Pro 7+ (from EUR 950), updated Surface Pro X (from EUR 950), Surface Duo 2 (tablet, from EUR 1650), new Surface Slim Pen 2 (from EUR 130), Surface Adaptive Kit (EUR 11), Ocean Plastic Mouse (EUR 28), Microsoft Modern USB-C Headset (EUR 62)
• Facebook: Launches updated Portal+ ($350, 14 inch), new Portal Go ($200; 10 inch) smart speakers

PLATFORM REGULATION

• Min EZK (NL) responds to 11 questions from Parliament on DSA: 1. no pro-active obligation to track illegal content (would limit freedom of speech), except for specific content niches (such as terrorist propaganda), 2. hosting service required to offer flaffing options for illegal content, etc.
• EDPB (EU body of privacy authorities) publishes Guidelines on Virtual Voice Assistants (VVA)
• FTC to focus gatekeeper investigations on unfair contracts and facially illegal mergers