reports
- James Ratzer
GERMAN ALTNET UPDATE: What will be the key to success?
Last week, we reviewed the UK altnet market. So this week, we turn our attention to Germany and how the fibre challengers are developing in that market. We have done a lot of work over the past few months on the MDU market in Germany for TeleColumbus and OXG. So now, we specifically focus on Deutsche Glasfaser and the recent UGG/ Infrafibre deal, as these players mount their challenge against DT in the SDU market.
- James Ratzer
- James Ratzer
UK Telcos Impact from higher employers' taxation in upcoming Budget
Over the weekend, it has been widely reported that the upcoming Budget this Wednesday will include a 2pp rise for employer national insurance tax. In this brief note, we run through the financial implications of this for the UK telecoms companies (BT, VMO2, TalkTalk and Vodafone) and who is most exposed.
- Ben Rickett
- James Ratzer
- Ben Rickett
- James Ratzer
- Russell Waller
EU TELECOMS REFRESH: Can the outperformance continue?
When was the last time we could write that the EU Telecoms sector has been the second best performing sector in the market YTD? As a result, this raises the question of whether the outperformance can continue. We believe regulation will ultimately determine the answer to this question.
- James Ratzer
TalkTalk Still challenged, but now in the price: Back to Neutral
After the disclosure last week from TalkTalk and liaising with the company, we have fully reviewed our model and publish new numbers. Although the business still faces a difficult future and management ability to hit past guidance has been poor, we move from Underweight back to Neutral given the sharp recent decline seen in the bond pricing.
- James Ratzer
TalkTalk Refinancing update: One step forward, two steps back
TalkTalk has announced a successful completion of their current refinancing to push out bond maturities to end 2027/ start 2028. However, new cashflow guidance given for FY25 leaves a far bigger hole than we had previously forecast and makes us even more concerned on the credit than before.
- James Ratzer
Vodafone (Buy, 140p, +89%) Hidden upside in the non-EU assets
Today, our colleague Chris Hoare has published two thematic notes looking at Sub-Saharan African telecoms companies. These focus on the potential for market structures and revenues to improve, and especially after periods of currency weakness (which has been notable in Egypt and Turkey).
- James Ratzer
Cityfibre/ Sky/ BT: Our take A deal we have been expecting for some t...
Cityfibre has announced a new wholesale agreement with Sky this morning – a headline we have been waiting for over the past 3 years. Therefore, we think both our BT and Cityfibre models are well prepared for this. In this note, we run through the potential impact from the deal and its details. We then look at what next steps we should be expecting from here. (Our Cityfibre model is also available on request for those interested).
- James Ratzer
FWA in Europe: Maybe it isn't accelerating Analysis of Hutchison's H1...
Clearly the biggest issue for them is whether the merger with Vodafone UK will be approved or not. As one would also expect they couldn’t be drawn on any new substantive comments on this while the CMA process is ongoing. For our detailed thoughts from May on the CMA Phase 1 findings on that deal, please see our expert call on the topic.
- James Ratzer
BT (Buy, 225p, +60%) Bharti deal will trigger more buying in the mark...
Given our recent note on Drahi switching the way he owns his BT shares, the Bharti Global announcement to buy his 24.5% stake is very timely. In this note, we run through the mechanics of how we think this will work, and what this might mean.
- James Ratzer
BT (Buy, £2.30, +63%) Drahi's position: Revealing what is going on
Ever since Drahi’s surprised people by buying a 12% stake in BT back in 2021 and scaled up to 24.5% by 2023, there has been much discussion about how Drahi owns his stake and how it might be financed. This has material implications for any potential overhang on BT’s position, and our new analysis of his structuring leads us to believe that any overhang is much lower than the market might fear.
- James Ratzer
- James Ratzer
BT Group (Buy, £2.30, +68%) 1Q25: Where are the broadband subscribers...
BT reported reasonable Q1 financial results this morning, but investor focus will be on a further deterioration in broadband line losses to -196k (-122k in Q4). In this note, we take a look at where these broadband losses might be going and implications for the broader UK broadband market. This is therefore also relevant for all credit investors currently looking at TalkTalk.
- James Ratzer
EU Towers/ Vodafone Our take on Vantage selldown
This morning Vodafone finally announced that they have sold a further 10% stake in Oak Holdings (the Vantage Towers holding company) to the consortium led by GIP and KKR, for €1.3bn of proceeds. In this brief note, we run through what this implies for Vodafone and other tower valuations.
- Ben Rickett
- James Ratzer
- Russell Waller
EU Telecoms: Half-time report 2024 Sector should still be able to out...
European Telecoms has had a reasonable first half of 2024 – up 7% vs. the market up 9% - and is up 15% since January 2022 – bang in line with the EU market. The sector trades in line with the market on P/E for similar earnings growth, but we still see two major structural levers of upside:
- Ben Rickett
- James Ratzer
BT (Buy, £2.35, +68%) Was £1.95 Revisiting the Openreach story: Ta...
Given the moving dynamics in the UK broadband market, we revisit all our bottom up assumptions for Openreach coming away more positive on the longer-term upside in the asset, despite some near-term headwinds from line losses. This remains a conviction Buy for us and we run through all our key assumptions and views in this note, and also the potential impact for VMO2.
- James Ratzer
Vodafone (Buy, £1.35, +88%) Might Vodafone be able to extract cash fr...
Vodafone’s decision to sell Softbank KK in Japan back in 2006 and swap the proceeds into Hutchison India in 2007 might well go down as one of the worst telecom M&A swaps in history. Vodafone’s exposure to India has caused nothing but difficulties for them, but this morning Vodafone announced that they have sold an 18% stake in Indus Towers through a block trade, raising €1.7bn in gross proceeds.
- James Ratzer
UK Altnet Update: Consolidation underway Implications for BT and the ...
Earlier this year, Cityfibre bought LitFibre, but over the weekend, we saw a larger UK altnet consolidation deal between Netomnia and Brsk. In this note, we review the implications of this deal, the next steps for the UK altnet landscape and what this deal might mean for Openreach/ BT.
- James Ratzer
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