Sunday, August 16, 2020

Week 33 in Telecoms, Internet & Media

5G



VIDEO
  • AT&T
    • Rumor: to sell Crunchyroll to Sony but price ($1.5b) too high
    • Rumor: CNN plans global streaming service
  • Apple: Bloomberg: plans bundling Apple TV+ with CBS All Access (stand-alone 10), Showtime (stand-alone 11) for 10 $/mo (on top of 5 for Apple TV+)
  • Locast: Launches in Minneapolis-St Paul, total pops coverage US 42%
  • ViacomCBS
    • Bloomberg: plans SVOD bundle (CBS All Access, Showtime) with Apple TV+ for 15 $/mo
    • Rumor: to rebrand CBS All Access in 2021, possibly to Paramount+
  • Fox Corp: Fox News Media to launch Fox News International (SVOD, based on Fox News Channel & Fox Business) 200820, 7 $/mo first in Mexico, 200917 in ES, DE, UK, total 20 countries YE 2020; apps for iOS, Android, Apple TV, Android TV, later Amazon Fire TV, Roku
  • Telenet: EC approves streaming JV of Telenet & DPG Media: Streamz, to be established 200901, Peter Vindevogel (Telenet) CEO, Kris Vervaet (DPG) Chair; to focus on Flemish & int content
  • Tricolor (DSB, Russia) adds TVOD to streaming service


MEDIA & SERVICES

Internet
  • Amazon
    • To add podcasts to Amazon Music (both free and paid tiers), Audible (combined 55m users)
  • Apple
    • To direct users to Apple News+ for reading articles (instead of publisher websites) from autumn 2020; also for links appearing in social media & search results
    • Bloomberg: Plans Apple One subscription bundle Oct 2020, with Family Sharing (max 6): Music, TV+ (video), News+ (news), Arcade (gaming), iCloud (storage) (not Apple Care or monthly paid hardware); 3 tiers: 1. Music + TV+, 2. Music + TV+ + Gaming, 3. Music + TV+ + Gaming + iCloud; could be limited by music majors agreements not allowing Apple Music bundling with other services; plans app for virtual fitness classes (subscription-based, codename Seymour)
Media
Telecoms
  • Sunrise launches Back to School promos until 200831: 100 CHF/mo in 24 mo contract for BB, TV (neo max), Macbook Air (retail price CHF 1130), Apple TV (retail price CHF 200); free iPhone SE & Apple Airpods for new Freedom swiss unlimited subs (65 CHF/mo in 24 mo contract); fgree MacBook Air for new Freedom europe & US subs (100 CHF/mo in 24 mo contract)
  • Ludwigsburg (DE) launches V2X tech from Cohda Wireless, with Swarco (traffic tech): all traffic lights & intersections fitted with Cohda MK5 road-side units, which correspond with MK5 on-board units in fire trucks & rescue vehicles to grant them green-light passage when on the way to emergencies


REGULATORY

Platforms

Platforms general
  • Indonesia extends 10% VAT on Amazon, Google, Netflix, Spotify [see 200710] to Facebook, Disney, Apple, TikTok; to be collected from 200901
  • EU and US talk over replacing Privacy Shield
  • Social networks (Google, Facebook, Twitter, Pinterest, LinkedIn & Microsoft, Reddit, Verizon Media, Wikimedia) cooperate on scenario planning during run-up to US Presidential Election 201103
  • Epic Games sues Apple & Google for banning Fortnite from app stores as Fortnite bypassed in-app payment systems from Apple & Google, claims monopolistic behavior (violates Sherman Act & California’s Cartwright Act), claims that Google blocked OnePlus & LG from pre-installing Fortnite launchers on new smartphones - Spotify and Match Group support Epic; [Apple has monopoly on iOS access for apps through App STore; Google allows sideloading app (not through Play Store) and 3rd party app stores such as Epic's, but erected contractual & technological barriers on distributing apps not through Play Store] - Apple refused Facebook's request to waive 30% App Store fee for small businesses hosting live events (Facebook Pay instead applies zero fee)
  • The Privacy Collective sues Oracle & Salesforce (CALS) over personal data collection, bundling & trading
Spectrum
  • RTR (AT) plans multiband (6 blocks of 2x10 in 700, 12 blocks of 2x5 in 2100, 9 blocks of 1x5 1500) auction Aug-Sep 2020; coverage obligation: 900 towns (of 2100) with little or no mobile to be connected to 5G, bonus (price discount) for connecting any of the 1200 other
  • CTU (CZ) launches multiband auction tender, applcations due 200930: 700 band (2x10 MHz reserved for newcomer), 3400-3600 band - MNOs oppose newcomer
  • FCC (US) to reallocate military spectrum (100 MHz in 3.5 GHz band: 3.45-3.55) for 5G by 2021
  • ACMA (Australia) plans 26 GHz auction March 2021, cap 1 GHz
  • MoC Israel ends 5G auction, 3 winners with identical spectrum (2x5 in 700 band valid 15 yr; 2x10 in 2600 band valid 10 yr; 100 in 3500 band valid 10 yr): Cellcom/Golan Telecom/Marathon Telecom (owns 018 Xfone; pay ILS 115m = $34m), Pelephone (= Bezeq; pays ILS 88m), Partner Comms/HOT Mobile (ILS 62m); to be paid Sep 2022
Telecoms


CORPORATE

  • BT: Daily Telegraph: pension deficit (GBP 11.3b) could be reduced by shifting part of Openreach (estimated value GBP 20b) to the fund
  • CK Hutchison: 3 DK plans infra (1275 towers) spin-off as HI3G Networks, open for others
  • Equinix: Acquires 2 datacenters (carrier neutral) from GPX India, $161m
  • PPF: Rumor: considers selling MNOs acquired from Telenor (Bulgaria, Serbia, Montenegro, Hungary)
  • Liberty Global: Offer for Sunrise (CH)
    • Sunrise board & shareholder Freenet (24%) support
    • 110 CHF/share cash (premium 28% to 200811, 32% over last 60 days average), valuation CHF 5.0b, EV CHF 6.8b
    • valuation 7.5x adj EBITDA or 10.3x adj OpFCF after synergies, 10.0x adj EBITDA or 17,6x adj OpFCF before synergies
    • to be financed from cash (CHF 3.5b) & new debt (CHF 3.2b o/w 1.6b for refinancing Sunrise debt)
    • synergies NPV after costs CHF 3.1b (o/w CHF 2.6b from low-risk cost & capex), annual run rate from rev, costs, capex CHF 275m (46m from rev, 187m from opex, 42m from capex)
    • tender to start end Aug 2020 for 40 business days, unconditional on reaching two-thirds, to squeeze out minorities & delist, expects approval end 2020
    • break-up fee CHF 50m for Sunrise
    • pro forma combination: >3500 employees, rev CHF 3.1b, 2.1m postpaid subs, 1.2m BB subs, 1.3m TV subs, market share in each ~30%
    • target gigabit BB coverage 90% of HH by 2021 (UPC 75%, Sunrise 30%), to upgrade to 10 Gb/s over time
    • "attractive opportunity to deploy existing cash to unlock substantial synergies and sustainable free cash flow growth. (...) “This transaction is another significant step on our path to create fixed-mobile champions in all of our core markets. (...)  after this deal, and assuming completion of our recently announced UK transaction, we will continue to have approximately $7 billion of liquidity8 to drive value-creation for shareholders."
    • UPC/Sunrise to become part of UPC credit pool, target leverage 5.0x
    • May consider IPO fo the merged business in the future
  • Vivendi Proposes talks with Mediaset to settle differences - Mediaset rejects, demands compensation
  • ViacomCBS Speculation on future after Sumner Redstone died 200811
  • Warner Music Group Acquires IMGN Media (creates shareable social media content including memes & short videos for Instagram & TikTok)
  • FuboTV: Files for IPO; Walt Disney acquired 6.6m shares = 17%
  • Alphabet
  • Facebook: Bloomberg: establishes F2 (Facebook Financial) arouind payments (Facebook Pay, Novi (formerly Calibra), WhatsApp Pay), led by David Marcus

EARNINGS

  • Deutsche Telekom: 20Q2
    • T-Mobile NL: Tele2 integration & synergies on track, corona virus reduced roaming income (VR, OoB outgoing), 5G-700 reached 85% coverage (nationwide end 2020)
  • TDC: 20Q2
  • Swisscom: 20Q2
  • Turkcell: 20Q2
  • Go Malta: 20Q2
  • Freenet: 20Q2
  • United Internet: Raises outlook 2020: rev growth 2020 4% (formerly: flat)
  • 1&1 Drillisch: Raises outlook 2020: rev growth 4%
  • QSC: 20Q2
  • RTL: 20Q2
    • TV ad rev -40%
    • streaming subs (TV Now, Videoland) 1.77m (+45%), TV Now subs +50%, viewing time +36%, Videoland subs +41%, viewing time +31%
    • outlook 20Q3: tv ad rev -10%
    • outlook 2020: rev & adj EBITA significantly below 2019
    • 3 priorities: 1. Strengthen core (TV ads), 2. Boost growth business (streaming & content (Fremantle)), 3. Foster alliances & partnerships (Smartclip, Atresmedia)
    • LT streaming targets 2025 maintained: 5-7m subs, rev >EUR 500m, content spend 350m EUR/yr, EBITA break-even
  • Meredith: 20Q2
  • Dentsu: 20Q2
  • FuboTV: 20Q2: 286k paying subs,  rev $44m (+53%), net loss $100m


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