DB Daily Fibre: TNOR & TELE2 MISS / ORA - SFR / ELISA FBK / UK BB - CF / SES / SPCX

Research evidence excerpt

DB Daily Fibre: TNOR & TELE2 MISS / ORA - SFR / ELISA FBK / UK BB - CF / SES / SPCX

be more visible in Q4; (3) Data centres: started the

data centre connectivity business and capex related to them will sit outside the 12%

capex/sales envelope. Not much colour on impact to financials but Elisa believes

the returns are attractive; (4) Dividend: see dividend policy (earnings based) as

intact, though we note Elisa is already fully distributing its EFCF. OVERALL: Shares

-5%. Elisa has underperformed the sector -17% YTD but this was another quarter

with a miss, with weakness in both mobile and software, and with the company’s

comments suggesting Q4 will see the more material improvement (rather than Q3).

Link to results comment

UK TEL: Bloomberg reports that CityFibre, the UK's largest alt-net (1m customer

connections on a network which passes >4.5m RFS premises and 260k UK

businesses), is engaging in consultations to cut its workforce by c.200 or 18%. The

move is said (ISPreview) to be in response to "slower progress on consolidation"

and simplifying the organisation helps "position us well to continue to attract the

capital we need". CityFibre, which was interested in acquiring Netomnia, is

struggling (like many alt-nets) with high interest rates and debt burden and slower,

though improving, customer take-up. We expect a boost on the customer front

from Sky, which is now marketing 5Gbps symmetric broadband on CityFibre at £45/

m (prev £80, see here). VodafoneThree (330k customers on CityFibre) recently

(June) extended its relationship with CityFibre, who will become a preferred

supplier to connect mobile base stations - an adjacent opportunity for CityFibre in

addition to consumer/enterprise broadband. The delay to consolidation point is