Structural seperation advancing in telecoms, esp. in Italy

After a bad example in Australia (the NBN debacle), good ones in New-Zealand (Chorus and Spark) and Czech Republic (CETIN, PPF), a formal one in Denmark (TDC NET and Nuuday still in the TDC Holding structure - waiting for Nuuday to be offloaded) and nearly one in the UK (Openreach still in full BT ownership), structural separation may now happen in Italy. Ireland (eir, NBP, SIRO) also looks like a candidate (esp. now that Virgin Media Ireland is becoming a SIRO customer).

Here is what is going on at TIM:

• 21 Nov. 2021: KKR considers a friendly offer of 0.505 EUR/share (equity valuation EUR 10.8b). Net debt was EUR 22.5b.
• 7 and 17 Dec. 2021: Management changes.
• 15 Dec. 2021: Profit warning.
• 26 Jan. 2022: Industrial Plan draft.
• 14 Feb. 2022: Industrial Plan update.
• 2 Mar. 2022: Q4 results and Industrial Plan 2022-2024 (NetCo and ServCo). CVC and Iliad have shown interest in buying a stake in ServCo.
• 4 May 2022: Q1 results, plans Capital Markets Day 7 July.
• 29 May 2022: NetCo (incl. FiberCop) spin-off and Open Fiber merger proposal; NetCo valuation EUR 20b (rumor); CDP Equity to own 70-77%, KKR 12-15%, Macquarie 10-13% (rumor).
• 1 June 2022: Vivendi (24%) objects to valuation (current market cap EUR 5.9b, net debt EUR 17.7b).
• 7 June 2022: 1,200 job cuts by Nov. 2022.
• 20 June 2022: Vivendi demands NetCo valuation of EUR 31b, to take on EUR 10b debt

TO BE UPDATED

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

Week 13 in Telecoms, Internet, Media

Corporate

• Syn (Iceland, brand Vodafone): Tower sale & lease-back with anon investors; sells 49.9% stake in Faroese associate P/F (Tjaldur 50.1%; brand Hey), DKK 52.5m, maintains service agreement
• MasMovil (KKR, Cinven, Providence): Moody's places B1 rating on review for downgrade on debt-financed acquisition of Euskaltel
• Euskaltel: Moody's places B1 rating on review for downgrade on MasMovil offer (10x EV/EBITDA pre-synergies) (debt-financed acquisition of the company will likely result in weaker credit metrics for the combined entity, including leverage rising initially to over 6.0x)
• Digi: Sells Digi Hungary (incl Invitel, I TV) to 4iG [on exclusion from 5G auction]
• KPN: HEMA to end MVNO sales 210501, prepaid refers to KPN, to shut down 220501
• Cellnex: To raise EUR 7b equity
• Telenet (Liberty Global): Acquires 49% stake in Caviar Group (prodco)
• M6 (RTL): Rumor: TF1, Vivendi, Xavier Niel, Mediawan, KKR, Matthieu Pigasse & Pierre-Antoine Capton, Daniel Křetínský (also Mediaset, NRJ, Altice Europe) interested
• Music
• Vivendi: UMG (80%) raises EUR 3b financing line from banks, 5 yr; CHQ in Hilversum (NL)
• HYBE: Acquires Ithaca Holdings (Scooter Braun); issues 863k new shares at 186 $/share = $161m, total $1.05b incl debt
• Sony: SME acquires Som Livre (record label Brazil), $255m
• Accenture: Acquires Cygni (IT)
• Deliveroo (Amazon) IPO price set at GBP 3.90 [see 210308]; first trade 331p, closes at 287p
• Funding
• Getir: Raises $300m at $2.6b valuation, plans expansion to NL, DE, FR
• Hitmart: Raises $130m; 1300 employees, 12 offices
• Otrium: Raises $120m, plans expansion to US

Networks

• General
• OECD publishes new Going Digital toolkit (based on access, use, innovation, jobs, society, trust, market openness); Netherlands score on access penetrations: broadband 93, M2M 21, mobile broadband 67, HH broadband acceess 98, business broadband speed >30 Mb/s 86, 4G broadband coverage 99, urban/rural broadband divide 100
• US White House proposes $100b for universal broadband access by 2030 (as part of $2.25t Infrastructure & Tax Proposal (The American Jobs Plan); to raise corporate tax from 21 to 28%, tax on overseas profits from 13 to 21%) [focus on cheap munifiber]
• FTTH
• Germany
• EFN eifel-net Internetprovider (rural FTTP) raises funds from John Laing
• Jobst NET (rural FTTP) raises funds from John Laing
• DNSNET sells 60% stake to 3i, EUR 182m; Alexander Lucke retains 40%
• UK: Virgin Media UK (Liberty Global) trials use of Openreach ducts & poles for FTTP expansion (first in Swadlincote)
• Italy: FiberCop (TIM 58%, KKR 37.5%, Fastweb 4.5%) starts operations as carrier-neutral OA wholesale operator; targets positive FCF (EBITDA - capex) by 2025, will not require capital injections; current pops coverage (FTTC + FTTH) 90%; targets 76% black/grey area MDUs (= 56% nationwide units coverage) by 2025 
• 5G
• Telia launches Private 4G/5G solution in Norway based on licensed spectrum, on-premise RAN (already in Sweden)
• Verizon Business plans Private 5G at Associated British Ports (ABP) for Port of Southampton, with Nokia [see 201019]
• Xiaomi launches Mi 11 Ultra (with secondary screen): 6.8 inch, Snapdragon 888, 120 Hz OLED, 5k mAh battery; and Mi 11 Lite 5G: 6.6 inch, Snapdragon 780, 90 Hz OLED
• Realme launches low-end 5G smartphone Q2i (from $152)

Services

• NBCUnivcersal (Comcast): Rumor: considers pulling movies from competitors (Netflix, HBO Max: movies 9 mo after theatrical release) to add to Peacock after theatrical & TVOD windows
• Lionsgate: Sells 75% Pantaya stake to Hemisphere, $124m cash [see 170801]
• T-Mobile US expands Google partnership: to resell YouTube TV (replacing TVision, closing 210429), Messages by Google as default RCS on Android smartphones; to offer Pixel smartphones; promoting Google One (backup & storage); 5G covers 287m pops, 1.6m miles^2
• Telekom DE partners with Hamburg for citywide EV-charging for taxis (Project Future Taxi)
• Google (Alphabet): Starts trialing FLoC cookie alternative in Chrome browser [see 210303]
• Pinterest: Rumor: to acquire VSCO (photo app; total raised $90m, last at $550m valuation)
• Facebook: Instagram launches Remix on Reels: record video alongside video from other user [a la TikTok Duets]
• Audio
• Spotify: Acquires Betty Labs, creator of Locker Room (sports-focused live talk app) [a la Clubhouse]
• Discord: Launches Stage Channels feature: broadcast live audio conversations to a room of virtual listeners [a la Clubhouse]
• LinkedIn (Microsoft): Plans in-app social audio experience [a la Clubhouse]

Regulation

• Platforms
• Letter from 40 European SME tech companies to EU MEPs on DMA (gatekeepers [see 201215]): propose stronger ex ante interoperability requirement (as in DSA) for dominant gatekeeper firms; interoperability reduces anti-competitive barriers created by lock-in of established user bases
• Facebook
• Nick Clegg (VP Global Affairs): "In the long run, people are only going to feel comfortable with these algorithmic systems if they have more visibility into how they work and then have the ability to exercise more informed control over them."; "Facebook demotes clickbait (headlines that are misleading or exaggerated), highly sensational health claims (like those promoting “miracle cures”), and engagement bait (posts that explicitly seek to get users to engage with them)."; "You should be able to better understand how the ranking algorithms work and why they make particular decisions, and you should have more control over the content that is shown to you. You should be able to talk back to the algorithm and consciously adjust or ignore the predictions it makes — to alter your personal algorithm in the cold light of day, through breathing spaces built into the design of the platform."
• Launches features (in Android & iOS): Most Recent timeline (chronological display), Favorites timeline, turn of political ads, snooze specific pages or persons