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1 director sold
A director at GO Internet SPA sold 132,500 shares at 1.252EUR and the significance rating of the trade was 63/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clearly...
- Anna Bossong
GO internet - Full speed ahead on 5G
GO internet (GO) provides fixed wireless and fibre broadband to Italian regions with a population of 5.8 million people. New plans to accelerate the roll-out of its 5G network and reduce GO’s reliance on WiMax should boost growth in the coming years. Recent 5G frequency auctions in Italy also imply a potential value of €3.45 per share for GO’s 5G frequencies, net of group debt and the expected licence extension cost. Our DCF values GO at €1.67per share.
GO internet - Adding fibre and 5G capacity
The strategic partnership with Linkem, together with plans to expand its fibre offering, should increase GO’s addressable market and provide a much improved service to its existing wireless subscriber base. Despite this, the shares appear to discount a continued slowdown in subscriber growth from the wireless network with nothing in the price for fibre. We believe there is upside potential towards 220c/share.
Back on track
With funding in place, GO is stepping up the implementation of its network and we reduce FY17 EPS forecasts to capture this profile as well as the new €1.75m loan, but leave FY18 estimates largely unchanged. A pick-up in the pace of subscriber additions could trigger upside to our base case DCF of €2.8/share. In addition, with 3.5GHz now earmarked for 5G services, GO’s spectrum could be used for a wider service offering in the longer term and may put it in focus for operators looking to secure 5...
Rights issue for accelerated network roll-out
The proposed €4m rights issue, if successful, will be used to re-accelerate the roll-out of GO’s high speed network both within its existing regions and beyond, via its new agreement with Enel Open Fibre. While the offer is dilutive to earnings, the share price has been heavily marked down and appears to discount a continued slowing of subscriber growth, rather than the pick-up we expect as the network roll-out gets back on track.
Update: Treading water
GO internet’s (GO’s) FY15 results reflect the steady expansion of its network. FY16 has started somewhat slower and we now anticipate a more measured network expansion ahead of the funding from its majority shareholder and the proposed capital increase. We reduce our forecasts and valuation accordingly.
Outlook: GOing for more growth
GO internet (GO) is provisioning its 100Mbps service, which should drive ongoing subscriber growth. It may also have the opportunity to increase its footprint if it decides to participate in spectrum auctions during 2016. With its proposed €8m fund-raising, management seems to be positioning for this. However, the shares are discounting a slowdown in growth, rather than the prospects for a company gearing up for growth.
Update: LTE network a GO-GO!
GO Internet’s H1 results show steady expansion in subscribers with solid average revenue per user (ARPU). The roll-out of its 100Mbps equipment has now started and we expect to see acceleration in the pace of growth as a result. The shares do not yet reflect the progress GO Internet is making in its current regions and the possibility that it will be allocated additional spectrum next year, which would enable it to expand further afield, adds further upward valuation potential.
Update: 3.5GHz buzz
Subscriber additions increased by on average 60% a month following the IPO and should pick up even further in 2015 as management implements the 100Mbps base stations and accelerates the network roll-out. While the shares reacted positively to the buzz surrounding 3.5GHz chipsets that emerged following the Mobile World Congress (MWC) on 5 March, on 21x FY16 P/E, they do not yet reflect forecast growth, let alone the option value that ecosystem developments may bring.
Initiation: Italian 4G wireless broadband provider
GO internet raised €5m to fund an accelerated roll-out of its 4G services in its two licensed regions in Italy and potentially elsewhere. By targeting ‘mobile-only’ homes, GO hopes to increase significantly the rate at which it attracts subscribers. The group is already EBITDA positive and has sufficient liquidity to fund it to cash flow breakeven. If management can execute on plan we believe there is plenty of upside opportunity to the share price, which discounts no increase in growth fr...
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