Telecoms equity research

Explore the most viewed and latest equity research and media content for companies within the Telecoms sector. Stocks in this sector provide telecoms services & equipment, and mobile services.

Telecoms equity research

Explore the most viewed and latest equity research and media content for companies within the Telecoms sector. Stocks in this sector provide telecoms services & equipment, and mobile services.

Latest Content

Telia Company

Q3: a restructuring in Sweden that is beginning to bear fruit

Q3 revenues in local currencies, excluding acquisitions and disposals, decreased by 0.5% yoy (exactly like in Q2 but they had increased by 3% yoy in Q1), while the EBITDA declined by only 0.4% in local currencies, excluding acquisitions and disposals (a much better number than the 3.3% decline recorded in Q1). In reported currency, sales fell by 8.8% yoy: the effect of exchange rate fluctuations was nil, while the effect of acquisitions and disposals (Yoïgo in Spain) was a negative 8.5%. With no surprise, the group has reiterated its outlook both on EBITDA (around the 2016 level lfl) and operational free cash flow (SEK7.5bn). Remember this operational free cash flow together with decided dividends from associated companies of SEK2.8bn (the group has managed this year to secure a dividend decision in Turkcell in addition to the usual dividend from MegaFon) should be above SEK10bn and should cover a dividend around the 2016 level. The following additional points are of note: - In September, Telia reached a global settlement with the authorities regarding the Uzbekistan investigations. Telia agreed to pay fines and disbursements for an amount of $965m (SEK7.7bn), of which $757m (SEK6.13bn) was paid during Q3. This amount was expected and a provision for the settlement was already recognised in 2016. Note there are no further investigations regarding Telia’s operations in any of its markets from the authorities. - On 19 September, Telia announced that it had sold its direct stake of 153.5m ordinary shares in Turkcell, representing c.7% of its capital, for c.SEK4.18bn. Telia no longer has a direct stake in Turkcell, although its indirect stake of 24% through Turkcell Holding remains unchanged (Telia will therefore continue to work hard to solve the ownership deadlock and to reinstate proper corporate governance in that company. - On 3 October (in Q4), Telia announced that it had sold 38.5m ordinary shares in MegaFon, representing c.6.21%, at a price of RUB585 per share, raising gross proceeds of RUB22,522m (SEK3.2bn). Following the completion of the placing, Telia owns c.19% of MegaFon. As a consequence, MegaFon will be re-classified from an associated company to a financial asset from Q4. These sales are in line with Telia’s strategy to focus on the Nordics and Baltics. This leaves Telia with a strong balance sheet, even after the upcoming dividend payment of SEK1 per share in Q4.

  • 19 Oct 17
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Tele2

A good Q3 which has to be put in perspective

No surprise with Q3 revenues which were up by 1% yoy and lfl (they grew, however, by 13% in reported terms with essentially the integration of the B2B service provider TDC Sweden) but the EBITDA was quite good, indeed it was up by 12% yoy and lfl (and by 21% in reported terms). Remember, however, that two-thirds of the EBITDA growth is due to the Netherlands with the sharp reduction of the EBITDA losses after the launch of Tele2’s new LTE-Advanced 4G-network a year and a half ago. But the good numbers in this country have to be put in perspective with the intake in mobile customers (55k only in Q3 with a base of c.1m in a country with 16m mobile subscribers). Remember also that on 28 July, Tele2 announced the divestment of its Austrian operations to Hutchison Drei Austria (Three Austria) for €95m (SEK 910m) on a debt-free basis. On 10 October, the Austrian competition authority approved the transaction and the divestment is expected to be closed on 31 October. This is to be welcomed as we have always considered Tele2 Austria as an obsolete asset (sold eventually at 4.5x its current EBITDA, quite a correct price). Management has decided to raise the full-year EBITDA guidance to SEK6.4–6.6bn (+SEK0.2bn compared to the previous guidance), despite excluding the contribution of SEK0.2bn from Tele2 Austria. Note we had up to now an EBITDA of SEK6.62bn in our model (including Tele2 Austria), corresponding now to the low end of the new range.

  • 19 Oct 17
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