Telecommunications

Samsung may finally listen to pushy shareholders

24 Jan 2024

Palliser and other outsiders want the South Korean conglomerate’s defacto holding firm, Samsung C&T, to boost returns. It’s underperformed for years but if a court ruling goes in the favour of group leader Jay Y Lee next month, he’ll have a new reason to listen to agitators.

Samsung is primed to seize AI chipmaking crown

9 Jan 2024

The $390 bln Korean giant could become a one-stop shop for AI semiconductors. Losses in its memory chip unit are probably shrinking, and it is bulking up in logic chips and packaging. Samsung is rapidly moving towards a level of integration that could give it an edge over TSMC.

T-Mobile’s climb to top dog risks winner’s curse

8 Jan 2024

The US telecom’s decade-long rise, sealed by 2020’s Sprint merger, has lapped rivals AT&T and Verizon and triggered an $8 bln payout for backer SoftBank. The tie-up threatened unshakable dominance. But now, newer cable entrants may wrench open the market much as T-Mobile did.

Capital Calls: Telefonica cutbacks

4 Jan 2024

Concise views on global finance: The telecoms group and unions have agreed a plan to lay off more than 3,400 staff at a cost of 1.3 bln euros. The number looks high but it’s lower than expected cost savings and a previous accord. Labour representatives could have done better.

Microsoft will finally make its mark in mobile

29 Dec 2023

The software giant has famously tripped itself up in smartphones for years, but boss Satya Nadella is primed to play catchup. His Activision and OpenAI deals pave the way with ‘Candy Crush’, Xbox and ChatGPT. Bruising app wars at Apple and Google may exact a high price, however.

Spain’s Saudi telecoms shield is pricey and futile

20 Dec 2023

Madrid is buying 10% of Telefonica to protect it from the kingdom’s stake-building. But Prime Minister Pedro Sánchez already has tools to block the Gulf investor taking a board seat or a bigger share. Splurging taxpayer money unnecessarily looks risky for a new government.

Vodafone may have to answer Iliad’s Italian call

18 Dec 2023

French tycoon Xavier Niel’s new bid for his UK rival’s business in Italy values it at a chunky 10.5 bln euros. That’s near what he offered last year despite falling earnings at Vodafone’s local arm. CEO Margherita Della Valle may struggle to find a more attractive exit strategy.

Altice’s best hope will be a Middle East lifeline

18 Dec 2023

Telecoms tycoon Patrick Drahi is dismantling his empire to cope with a $60 bln debt wall. Attracting new investors may be tricky given low growth and a corruption scandal. Luckily Gulf states like the UAE and Saudi Arabia are flush with cash and keen to grab Western assets.

Fourth is with Jana in communications-space wars

8 Dec 2023

The pushy hedge fund wants $5 bln fiber-network builder Frontier to auction itself. Three of its other recent campaigns in the industry – at CyrusOne, Vonage and Zayo – all led to deals. This one’s a tougher sell, but there’s probably a buyer willing to pay a modest premium.

Capital Calls: AI funding

5 Dec 2023

Concise views on global finance: French AI model-maker Mistral is on track to notch a $2 bln valuation from investors like Andreessen Horowitz despite scant revenue.

Romanian telco upstart will be M&A party pooper

30 Nov 2023

Originally a mobile provider for Bucharest expats, Digi Communications is expanding across Europe. It is taking market share thanks to a low-cost model and as regulators force merging rivals to shed assets. A wave of consolidation in Spain and elsewhere may yield some surprises.

Uneasy lies the head of Crown Castle

28 Nov 2023

Pushy investor Elliott is again chiding the $47 bln wireless towers operator, urging it to replace CEO Jay Brown. The shares have dragged under his watch, with costly fiber networks partly to blame. As NRG and Citrix sensed, it’s unwise to slam the door twice on the hedge fund.

Google antitrust trial crystallizes Apple’s risk

15 Nov 2023

Court testimony revealed that Alphabet’s search giant gives the iPhone maker 36% of ad revenue generated through its devices. The cost allows Google to argue it’s in a pay-to-play market. It also suggests that Apple and its shareholders have more to lose from the deal unwinding.

Vodafone CEO M&A job boosts Italy deal confidence

14 Nov 2023

After successfully offloading the telco’s UK and Spanish arms, Margherita Della Valle may sell all or part of its slowing Italian business. Rival Iliad is the top contender. But the division is now worth perhaps 2 bln euros less than what tycoon Xavier Niel offered last year.

Lina Khan’s spirit haunts T-Mobile deal ghost

10 Nov 2023

Consumers are suing the $170 bln telecom company for its deal with Sprint. Given government watchdogs can’t bust up big tech, it seems ambitious. But recent jury verdicts illustrate rising movements against companies. Plus the hassle creates yet another deal impediment.

Telefónica $2 bln German swoop is cheap but risky

7 Nov 2023

The Spanish telco is offering to buy out its Teutonic arm’s minority investors. On the surface, it’s a good time to pounce given the unit’s recent slump. But the immediate financial benefits are sketchy, and the debt-laden parent may have to wait years for a German turnaround.

Telecom Italia rival plan has too many pitfalls

3 Nov 2023

An ex-executive and a fund say the telco could raise 16 bln euros by offloading a Brazilian unit and other assets to slash its debt pile. That would spare it from selling its prized network to KKR. Yet bagging such valuations while executing a multi-step project looks tricky.

Apple’s cash insures against exuberance

3 Nov 2023

The $2.8 trln iPhone maker’s valuation is rich even as growth slows, antitrust worries cloud its services business and trade wars threaten China sales. While investors seem as confident as ever, the company’s balance sheet suggests boss Tim Cook is exercising some caution.

Vodafone CEO’s iffy Spain deal is better than none

31 Oct 2023

Margherita Della Valle is selling her unit in the country for 5 bln euros to a tiny investment vehicle. Part of her payment comprises shares in the highly leveraged buyer, which is yet to raise equity of its own. But even if that effort fails, the deal still works for Vodafone.

Capital Calls: McDonald’s resilience

30 Oct 2023

Concise views on global finance: The Golden Arches’ global same-store sales rose 9% thanks to both selective menu-price increases and smaller meals in different markets. It demonstrates the company’s ability to keep pace with disparate economies’ stretched consumers.