Communications

Report by New Street Research

TEL has announced that it has agreed to buy GlobalConnect's (GC) Consumer Business in Norway. Not that many mature fibre assts have been sold in Europe, and so this deal is interesting on quite a few levels: for those thinking about what FastFiber in Portugal is worth or what Virgin Media might sell a stake in NetCo for, or what price Zegona / MasOrange might achieve in Spain, then this deal has relevance. Indeed, one could even argue that there is a read across for the incumbents themselves, as their fixed businesses will eventually broadly resemble GC. In this report New Street looks at what the deal means for fibre valuations, fibre capex assumptions and for TEL itself.

Technology

Report by Paragon Intel

Evidence suggests CEO Schulman is not the leader to put out the fire he started - has missed numerous opportunities to keep the company ahead of an ever-rising competitive intensity in the fintech space. Schulman is a chronic underperformer who has destroyed (72%) alpha during his CEO tenures at PYPL and Virgin Mobile USA. His ManagementTrack Rating is well-below average at 3.0 (vs. median rating of 4.9 across Paragon's platform) and he has 18 level "2" or "3" audit, financial, and governance red flags identified including material impairments, Benford's Law, Financial Restatements, and Internal Controls during both of his CEO tenures.

Communications

Report by New Street Research

Further signs of an over-heated sub-sector - Axione (the French fibre JV between Bouygues and Mirova) has announced plans to build FTTP to 4m premises in the UK in sub-urban and rural areas. New Street believes the company is entering an increasingly crowded UK FTTP market (estimates there is already c.15% overlap among the altnets today); argues the economics looks very challenging and consolidation among the players is long overdue if they are ever going to improve their returns and stop competing against each other, as well as Virgin and BT.