It has been a long time since a single presentation has created as much of a stir among global telecom investors as Hiroshi Mikitani’s, the founder and CEO of Rakuten, on the entry strategy of the Japanese e-commerce leader into the mobile industry at MWC this year. Following a deluge of client interest, we have carried out a deep dive into what Rakuten is doing (HERE). What we found out has the potential to be scary for the incumbent Japanese mobile operators, but may be rather less of a fright for the rest of the global industry.
We have written three reports that have expanded on the theme of 5G and its impact on wireless capacity in the US in the past couple of weeks. In this Global Weekly Review, we highlight our expectations for how the C-Band and other sources of 5G spectrum may transform the wireless, cable, and tower industries.
It’s been a busy week for coverage at New Street, having initiated on five companies across the telco, media and tech space: Softbank (Japan), Chorus (New Zealand), MultiChoice (South Africa) and MASMOVIL and Euskaltel in Spain.
We aim to have something different to say on all the names but in the case of Spain it’s more a case of pointing out the obvious whilst reassuring investors that recent fears are overdone.
Continue reading “Spanish Unicorns”
We tell investors not to obsess about who is first across the start line on 5G, and then spend too much time focused on exactly that. In this weekly summary we indulge that error but also look at the longer-term outcomes that can be obscured by exciting news flow.
Tuesday, a week after MWC in Barcelona, we are hosting a 5G conference jointly with BCG in London (agenda: HERE). 5G has arguably been
subject to more hype than any other generation of wireless technology, and the issuance of 5G spectrum in Italy last year was a painful reminder
of some of the potential pitfalls around 5G, but finally the industrial reality is starting to become clearer.
There’s been a flurry of M&A activity in Latin America year to date but, despite best efforts, it’s not (yet) John Malone emerging on top.
Several LatAm-region pieces of the jigsaw are conceivably in motion this year and it’s been Telefonica’s decision to rationalise its portfolio (tick in the box for Telefonica (Buy) which reported solid numbers and issued robust guidance this week) that has triggered the latest moves. Its initial decision to sell two Central American assets (Guatemala and El Salvador) to AMX last month may not have garnered global headlines – one regional behemoth selling to another – but rather this week’s announced sale of its remaining three assets (Panama, Costa Rica and Nicaragua) to Millicom is arguably more intriguing.
This week we wrote again (HERE) on the outlook for 5G capex in China. Capex is always a (the?) key driver for the Chinese telcos, but with the National People’s Congress approaching (5th March), and the telcos likely to announce 2019 capex budgets at their full year results towards the end of March, and probably give some indication of spend in 2020, the likely shape of 5G spend is set to be the definitive catalyst for the stocks over the next few months.
The most common question we hear from clients about Cable companies concerns the threat that Wireless poses to the Broadband business. T-Mobile reiterated their home Broadband ambitions again this week, triggering a fresh round of questions. Continue reading “Continuing (Incomplete) Thoughts on the Wireless Threat to Cable”
At the end of last year, we upgraded the European telecoms sector (see LINK), and let’s be honest, over the past month it hasn’t been a great trade, as the rest of the market has ripped up with the cyclical sectors performing well (and in fact, delivering one of the best Januarys for the stock market on record), and telecoms being left in the dust. So far, YTD the European telecoms sector is down 3%, with the vast majority of that driven by Vodafone’s weak performance alone. In the near-term, this clearly leaves us a bit disappointed (about our telco call that is, rather than the wider market performance), but not yet disheartened. Continue reading “Infrastructure Value Should Still Emerge in European Telcos”
We are worried about a recession. We have no economists at New Street (at least, not practicing ones), and we claim no special insights, but many of our clients are worried, and press reports are filled with worry, and after a ten-year growth stretch and a trade war and a government shutdown, it seems sensible to worry. Continue reading “What to Buy and Sell Around the World in the Event of a Recession”