Report
EUR 9211.00 For Business Accounts Only

1&1 (Buy, €30, +179%) No Rakuten, no 1&1 network build?

This afternoon our colleague Chris Hoare will be hosting a call on Rakuten, discussing the sustainability of Rakuten’s mobile business following the recently announced KDDI roaming deal and capital raise (register HERE). In this Quick Take we discuss implications for 1&1’s mobile network, which is being built by Rakuten’s Symphony division. This relationship makes 1&1 shares an interesting way for European investors to play the Rakuten short thesis.
Underlyings
1&1 Drillisch AG

Drillisch is a holding company. Co. through its subsidiaries, is a mobile virtual network operator in Germany. The services acquired from the network operators Telekom Deutschland GmbH, Vodafone D2 GmbH, E-Plus Mobilfunk GmbH and Telefonica O2 Germany GmbH & Co. OHG are sold further to the end consumers for Co.'s own account and at rates established by Co. Co. organizes its operations into three segments: telecommunications, which includes its activities in the sector of wireless services; freenet holding, which comprises the operations of its freenet AG subsidiary; and software services, which involves activities related to the development and marketing of a workflow management software.

Rakuten Inc.

Rakuten is mainly engaged in the Internet-related business. Along with its affiliates, Co. operates in two business segments. The Internet Services segment is engaged in the operation of electronic commerce sites, including an Internet shopping mall "Rakuten Ichiba," an online cash back site, a travel booking site, portal sites and digital contents sites; the sale of advertising on Co.'s sites; the provision of messaging and communication services; and the management of a professional baseball team "Tohoku Rakuten Golden Eagles." FinTech segment is engaged in the provision of Internet banking services and online securities trading services, and the credit card and life insurance businesses.

Provider
New Street Research
New Street Research

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Analysts
Ben Rickett

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