|Bid||19.00 x 29200|
|Ask||19.60 x 21500|
|Day's Range||19.38 - 19.61|
|52 Week Range||15.53 - 21.72|
|Beta (5Y Monthly)||0.56|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||0.99 (5.25%)|
|1y Target Est||30.26|
(Bloomberg) -- Sign up to our Next Africa newsletter and follow Bloomberg Africa on TwitterSouth African President Cyril Ramaphosa cut short a trip abroad to deal with an escalating crisis at the state power company, as week-long blackouts threaten to tip the economy into recession.The rand declined the most in a month Tuesday as Eskom Holdings SOC Ltd. said there’s a high likelihood of power cuts all week and mining companies including Sibanye Gold Ltd., the world’s biggest platinum producer, temporarily halted operations. Vodacom Group Ltd., the nation’s biggest mobile operator, said the outages are disrupting its service.Ramaphosa returned from Egypt, having terminated his trip a day early to “attend to urgent domestic priorities,” the presidency said in a statement. Eskom management will brief the president on Wednesday morning on “plans to mitigate and resolve the current electricity crisis,” it said.“As plausible as some of the explanations that Eskom is putting forward are, it’s really not sufficient,” Ramaphosa’s spokeswoman Khusela Diko said. “We are supposed to ensure that we are on top of issues of maintenance and we are supposed to ensure that we are able to forward plan,’’ she said in an interview with SAFm radio Wednesday morning.Eskom, which supplies 95% of the power used in Africa’s most industrialized economy, has struggled to meet demand for power since 2005, due to its failure to properly maintain aging power stations and invest in new ones. The latest round of outages were caused by simultaneous breakdowns at several plants and were exacerbated by heavy rains that caused flooding and soaked coal stockpiles.The company implemented a record level of cuts -- 6,000 megawatts -- to prevent a total collapse of the grid late Monday. The utility scaled down the level of cuts to 2,000 megawatts on Wednesday as it made “good progress” in the recovery from localized flooding at its plants and returned several units as scheduled. Breakdowns were at 13,302 megawatts early Wednesday morning, it said in a statement.The rand was down 0.1% to 14.7979 per dollar by 7:30 a.m. in Johannesburg. The economy contracted an annualized 0.6% in the third quarter, and the latest power deficit has compounded the risk of a recession.Ramaphosa’s decision to return to South Africa came after the main opposition Democratic Alliance appealed for him to cancel his engagements in Egypt to address the crisis at home.“It is telling that at the height of what is not just an electricity crisis, but an economic risk and safety threat, the president decided to jet out of the country on an international sojourn to Egypt,” DA leader John Steenhuisen said in a statement. “Ramaphosa is greatly mistaken if he thinks he can run a country and manage this crisis via a cell phone.”The Department of Mineral Resources & Energy said in a statement it’s considering short- and medium-term interventions to address the electricity shortage. These include allowing independent power producers to bring capacity on stream earlier.Besides Sibanye, Impala Platinum Holdings Ltd. and Harmony Gold Mining Co. Ltd., which had shut down mines, said operations had resumed. Petra Diamonds Ltd. said it had also resumed operations at reduced capacity. Palladium rose above $1,900 an ounce for the first time and platinum headed for the biggest daily gain since September.In Cape Town, the nation’s biggest tourism hub that’s gearing up for the year-end holiday season, the city council warned that if the power cuts intensify, it could interrupt water supplies.The outages and heavy rains are creating a “perfect storm” for insurance companies, said Christelle Colman, a spokeswoman for Old Mutual Ltd.’s property and casualty insurance unit. High levels of claims are expected due to foods spoiling in freezers, power surges damaging electronics, an increased number of vehicle accidents and additional incidents of theft, she said.Vodacom and MTN Group Ltd., Africa’s largest wireless carrier, both said the power cuts were affecting their mobile-phone towers and batteries.“Our towers do use batteries as a back-up, but these do have limited power and will eventually fail,” Vodacom spokesman Byron Kennedy said.South African Weather Service forecasts show rain in Mpumalanga, the province in which most power plants are located, will continue through Friday.(Updates with comment from Presidency spokeswoman in 4th, Eskom load-shedding stage in 5th and miners resuming production in 10th paragraphs.)\--With assistance from Mike Cohen, Prinesha Naidoo, Colleen Goko, Felix Njini, Roxanne Henderson, Loni Prinsloo and Amogelang Mbatha.To contact the reporters on this story: Paul Vecchiatto in Cape Town at firstname.lastname@example.org;Liezel Hill in Johannesburg at email@example.comTo contact the editors responsible for this story: Gordon Bell at firstname.lastname@example.org, ;Lynn Thomasson at email@example.com, Paul Richardson, Andre Janse van VuurenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Sign up to our Next Africa newsletter and follow Bloomberg Africa on TwitterSouth Africa has been hit by a sixth straight day of rolling blackouts as state-owned power utility Eskom Holdings SOC Ltd. acts to prevent a total collapse of the grid after a raft of plant breakdowns. The company implemented a record level of cuts -- 6,000 megawatts -- late Monday, prompting platinum and gold mines in the country to halt operations.Highlights So Far:Eskom says there’s a high likelihood of cuts all week. The utility plans to cut 4,000 megawatts -- known as Stage 4 -- until late Tuesday.Producers including Sibanye, Implats and Harmony stopped mining operations and mobile-phone networks have been affected.The City of Cape Town warned that a return to Stage 6 could lead to water-supply interruptions.Rains that have soaked coal and caused flooding may continue through Friday.Read more: Record Blackouts Shut South Africa Mines as Recession Risk RisesHere are the latest developments, updated throughout the day. Time stamps are local time in Johannesburg.Rand falls (2:47 p.m.)The rand fell 1% to 14.8158 per dollar by 2:47 p.m. in Johannesburg. It was the outlier in emerging-markets, which traded largely flat versus the dollar. The South African currency has now weakened two days in a row after Eskom raised the blackouts to a record level Monday. The rand declined Tuesday by the most on a closing basis since Oct. 30.Perfect storm for insurers (2 p.m.)Between the power cuts and heavy rains causing flooding in parts of South Africa, it’s a “perfect storm” for insurance companies at the moment, said Christelle Colman, a spokeswoman for Old Mutual Ltd.’s property and casualty insurance unit.The business typically expects higher levels of claims during periods of extended load-shedding, she said. These vary from claims related to frozen foods spoiling in freezers when outages exceed the scheduled time period to power surges damaging electronics around the home.There’s also an increase in claims due to power surges and motor car accidents during night-time blackouts. The rotating power cuts also mean more incidents of theft and robbery, especially during December when South Africans travel for summer holidays.Battery Theft (1:30 p.m.)The constant outages are affecting the performance of batteries powering MTN Group Ltd.’s equipment, said Africa’s largest wireless carrier. The company spent about 300 million rand last year ($20 million) on batteries for existing sites and has 1,800 generators in use.The company is also having to spend more on security to protect its batteries, generators and general site equipment from thieves and vandals.“Load-shedding is seeing entire neighborhoods cloaked in darkness at predictable times, which is offering criminals greater cover for their thieving,” the company said.Limited impact at Gold Fields (1:15 p.m.)Gold Fields Ltd., which operates one mine in South Africa, said the impact of power cuts has been limited so far.“We have managed the impact so far by shifting load between critical activities to ensure our core mining activities can continue,” said spokesman Sven Lunsche. “If load shedding continues at Stage 4 or above for a prolonged period, however, and there are sustained interruptions linked to our production ramp up it will become more challenging and we will need to implement alternative mitigations to ensure business continuity.”Manufacturing contracts (1 p.m.)South Africa’s statistics office said factory production contracted for the fifth consecutive month in October, when Eskom implemented the previous round of power cuts. That adds to the risk of a second recession in as many years. Manufacturing accounts for about 13% of gross domestic product.Anglo Platinum costs (1 p.m.)Anglo American Platinum Ltd. said that the rolling blackouts may add to its production costs this year, which are already likely to exceed an earlier forecast.The company is engaging with Eskom to understand the technical constraints and see where it can assist, spokeswoman Jana Marais said separately.“We have standby diesel power generators in place, and all our operations have emergency-response plans which detail what should happen in the event of load-shedding, which includes the safe evacuation of employees, shutdown procedures and communications.”Vodacom connectivity (12:30 p.m.)Vodacom Group Ltd. said its customers around the country will be experiencing network-connectivity issues due to the Stage 4 load-shedding affecting its mobile phone towers.“Our towers do use batteries as a back-up but these do have limited power and will eventually fail,” said spokesman Byron Kennedy. “A notable complication with Stage 4 load shedding over consecutive days is that batteries don’t get enough time to recharge to full capacity.”Vodacom has recently put mitigation measures in place including additional batteries and generators around the country, he said.Cape Town water (12 p.m.)A return to Stage 6 could lead to water-supply interruptions in Cape Town, the city warned.“Load-shedding of this severity is likely to constrain our ability to provide water supply in the reticulation system across the whole of Cape Town in the usual way,” it said in a statement. “Residents should not panic, but please use water sparingly and prepare just in case they do experience a period of no water supply.”Platinum, palladium rise (10:30 a.m.)Platinum and palladium led gains among major precious metals after South African producers said they had stopped operations. Platinum gained as much as 1.2%. Palladium rose as much as 0.6% to a fresh record of $1,894.47 an ounce, closing in on $1,900 for the first time. The metal has rallied 50% this year amid tight supply.High likelihood of cuts all week (10 a.m.)Eskom plans to cut 4,000 megawatts until 11 p.m. on Tuesday as it continues to face a shortage of generating capacity. Breakdowns are at 15,200 megawatts, the company said in a statement.“The incessant rains continue to impact coal handling and operations at our power stations. The probability for load-shedding remains high for the rest of the week.”Rains to continue (10 a.m.)Heavy rains have soaked coal, which is used as fuel, and caused flooding at Eskom’s Kriel and Camden power stations, the utility said. South African Weather Service forecasts show rain in Mpumalanga, the province in which the electricity plants are located, will continue through Friday. Rainfall in Lephalale, near the giant Medupi plant, could reach as much as 25 mm (1 inch) today, forecasts show.Mines close (Earlier)Producers including Sibanye Gold Ltd., the world’s biggest platinum miner, recalled workers from underground and stopped milling ore after Eskom announced Stage 6 cuts on Monday night. No. 2 producer Impala Platinum Holdings Ltd. didn’t start the 4 a.m. underground shift Tuesday and the company has stopped milling ore and shut its smelter.\--With assistance from Prinesha Naidoo, Felix Njini and Loni Prinsloo.To contact the reporters on this story: Colleen Goko in Johannesburg at firstname.lastname@example.org;Roxanne Henderson in Johannesburg at email@example.comTo contact the editors responsible for this story: Amogelang Mbatha at firstname.lastname@example.org, Liezel Hill, Pauline BaxFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Does Vodafone Group Plc (NASDAQ:VOD) represent a good buying opportunity at the moment? Let’s quickly check the hedge fund interest towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on satellite photos and other research activities, so it is no wonder why they tend […]
(Bloomberg) -- U.S. officials flooded Europe last week, and by the time they had departed, their efforts to persuade their allies to cut back in using Huawei Technologies Co. equipment appeared to finally be gaining traction.Europe has been caught between two major world powers, China and the U.S., over the question of whether to include Huawei in the roll-out of its future 5G mobile networks. Many European countries don’t want to anger Beijing, a significant trading partner, while the U.S., an important security ally, has repeatedly said it may reassess intelligence sharing with countries that utilize Huawei in their 5G networks.But on Tuesday the European Union agreed its member states should adopt a “comprehensive and risk-based” approach to the security of 5G, which includes using only trustworthy parties for components critical to national security, and should consider the laws of a supplier’s home country before buying their products.A day later, following a NATO summit U.S. President Donald Trump and German Chancellor Angela Merkel discussed “the need to exclude untrusted providers,” a White House spokesman said in a statement. The discussion came as the country’s largest phone carrier, Deutsche Telekom AG, announced it had stopped orders for 5G equipment due to Huawei’s uncertain status. Merkel has previously insisted that individual vendors such as Huawei should not be banned from the outset.While American diplomats see the new EU security conclusions as a sign of progress, it’s not yet certain it will lead to a change in Huawei’s status in Europe. Under current EU law, only member states can ban vendors from their markets. The countries are expected to agree to recommendations by the end of the year. These could include flagging specific vendors as untrustworthy, or suggesting updates to EU or national legislation.The ambiguities of European regulation haven’t stopped U.S. officials from declaring some form of victory.“We were very pleased to see the conclusions on 5G that the EU council released,” Rob Strayer, the U.S. State Department’s deputy assistant secretary for cyber, said on a conference call with reporters Thursday.Keith Krach, the State Department’s under secretary for economic growth, energy, and the environment also told reporters in Paris: “I would like to salute the EU leadership on the position they’ve taken on securing 5G.”For their part, EU officials said member states agreed to the 5G conclusions to safeguard the region’s own interests, not to appease any outside powers. They added that the U.S. and China weren’t mentioned in the discussions leading up to the agreement, nor were there any real controversial issues among the member states.Part of the U.S. optimism comes as European companies begin to turn their back on Huawei. Deutsche Telekom said it was hoping for “political clarity for the 5G build-out in Germany as soon as possible” as it announced it had stopped orders on 5G equipment due to Huawei’s uncertain status. No other major European telecommunications company has announced a full ban, although Vodafone Group Plc in January suspended purchases of Huawei gear for the core of its European networks.A key issue for European and U.S. officials is a 2017 Chinese law that mandates any organization and citizen to support and assist national intelligence in their investigations. The U.S. has argued that allies should only purchase equipment from countries that have independent court systems. Strayer has said he isn’t trying to get allies to ban a particular company, but instead, is urging allies to adopt a common security standard -- which Huawei doesn’t meet.“We’ve said for some time that we want to maintain our very close cooperation on law enforcement and military matters with governments around the world,” said Strayer said on Tuesday in an interview with Bloomberg TV. “But when we’re not able to share information securely, as would be the case when they have untrusted vendors in their 5G networks, we’re going to have to reassess how we share that information in the future.”A Huawei spokesman pointed Bloomberg News to a statement in which the company welcomed the EU’s “fact-based approach,” adding that the Chinese company is a trusted partner throughout Europe and that its 5G solution is “safe and innovative.”The political agreement by the European member states aims to set one approach on 5G across capitals, preventing any one country from being singled out or becoming a potential target for retaliation by China or the U.S.In the U.K., a key U.S. ally, Conservative party politicians are burnishing their hawkish security credentials during a general election campaign by dangling the prospect of a ban on a Chinese supplier. Prime Minister Boris Johnson, speaking at the NATO Summit in London on Wednesday, said he didn’t want Britain to be “unnecessarily hostile to investment from overseas,” but “we cannot prejudice our vital national security interests.”U.K. Chancellor of the Exchequer Sajid Javid appeared to echo Johnson’s stance. “When it comes to our national security, no cost is too high,” he said, speaking to LBC radio. The Conservatives are capitalizing on data that shows opposition Labour leader Jeremy Corbyn polling badly on whether he can be trusted on national security issues.It wasn’t all a success for the U.S., however. The following day, Johnson was seen using what appeared to be a Huawei P20 smartphone to take selfies. His office said that the phone belonged to a staffer.\--With assistance from Kitty Donaldson and Rudy Ruitenberg.To contact the reporters on this story: Alyza Sebenius in Washington at email@example.com;Natalia Drozdiak in Brussels at firstname.lastname@example.orgTo contact the editors responsible for this story: Giles Turner at email@example.com, Andrew MartinFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Vodafone’s Indian joint venture will have to “shut shop” if New Delhi does not intervene to stop a looming multibillion-dollar charge, the owner of the UK telecoms group’s local partner has warned. Vodafone Idea, a partnership between Kumar Mangalam Birla’s Aditya Birla Group and the UK-based operator, is facing potential ruin after India’s Supreme Court ruled in October that the company had three months to pay $4bn in retrospective levies, penalties and interest.
Boasting Europe's largest 5G network across 58 cities and as a global leader in IoT with more than 90 million connections, Vodafone (VOD) is the first telco to bring AWS Wavelength in the country.
The Netherlands aims to rake in at least 900 million euros ($992 million) from its first auction of bandwidth for 5G networks, it said on Thursday, adding some equipment suppliers could be banned from the new networks if they raise security concerns. European governments are grappling with how to treat Huawei Technologies Co Ltd after the United States alleged the Chinese telecoms supplier's equipment could be exploited by Beijing for spying. Huawei strongly denies the allegations.
The Netherlands unveiled plans on Thursday to auction bandwidth for 5G networks, saying some telecoms suppliers could be banned if they had close ties to foreign governments or intelligence agencies involved in spying. Secretary of State Mona Keijzer said in a statement that the government's first auction of the 700, 1400, and 2100Mhz ranges would take place by June 30 with a floor of 900 million euros ($992 million). An auction of the 3.5Mhz range most commonly associated with 5G is being delayed as the Dutch government moves a ground satellite system that would interfere with it to a new location.
(Bloomberg) -- Sign up to our Next Africa newsletter and follow Bloomberg Africa on TwitterCell C Pty Ltd.’s creditors aren’t giving up on a takeover offer from rival Telkom SOC Ltd., which South Africa’s third-largest mobile-network operator rejected last week.Senior debt holders have hired investment-banking firm Moelis & Co. and corporate lawyers Linklaters LLP and DLA Piper LLP to lobby for the Telkom proposal, people familiar with the matter said. They could block Cell C from pursuing an alternative recapitalization plan by forcing the carrier into liquidation or business rescue, said the people, asking not to be identified because talks are ongoing.A takeover by Telkom would return about 86 cents on the rand to lenders, while banks may have to take a deeper haircut if Cell C goes ahead with a transaction involving local investment company Buffet Group, they said. Creditors are also requesting that Cell C’s board act independently from Blue Label Telecoms Ltd., which owns 45% of the company, the people said.“Cell C and its various stakeholders, including the creditors, are working collaboratively to conclude a restructure that addresses all parties interests,” Cell C said in an email. “It is important to respect the confidentiality of these discussions. Information circulating in the public domain about these discussions should be viewed with a degree of caution. Cell C confirms that constructive discussions on the recapitalization are underway and will update the market on all material matters in due course.”Linklaters, DLA Piper and Moelis & Co. declined to comment, while Buffet Group could not be reached. Telkom said it hasn’t had any further communication from Cell C’s side.It’s not the first time Cell C has spurned advances from Telkom, which wants to combine the country’s two smallest network operators to better compete against industry leaders MTN Group Ltd. and Vodacom Group Ltd. After running into financial difficulties in 2016, Cell C opted for a deal with Blue Label.In July, Cell C missed interest payments and suspended future obligations, resulting in S&P Global Ratings cutting Cell C’s assessment to default. The company, which generates about 15 billion rand ($1 billion) in revenue, is struggling to repay about 9 billion rand of debt.Cell C agreed on an extended roaming agreement with MTN last month that will give it access to the network of South Africa’s second-largest wireless carrier. As part of that pact, Cell C will pay as much as 5 billion rand a year in roaming charges, from about 1.8 billion rand, the people said. Lenders haven’t been given a chance to review the deal, they said.(Corrects description of Blue Label stake in third paragraph and adds updated statement from Cell C in fourth paragraph for story published on Dec. 2)To contact the reporter on this story: Loni Prinsloo in Johannesburg at firstname.lastname@example.orgTo contact the editors responsible for this story: Rebecca Penty at email@example.com, Vernon Wessels, John BowkerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Orange SA will seek to extract greater value from its telecom infrastructure, joining rivals in selling stakes in mobile-phone towers and fiber-optic networks.In a first step, France’s largest phone carrier is selling 1,500 mobile towers in Spain to Cellnex Telecom SA for 260 million euros ($288 million), it said Wednesday in a statement unveiling a five-year strategic plan.Orange will set up separate companies to house its 40,000 cellular towers and look for partners to help finance the costly roll-out of fiber networks in France and elsewhere in Europe.Its shares fell as much as 4.8%, the biggest intraday drop in more than three years, after the company issued new forecasts for profits and dividends in the near term that were weaker than analysts had expected. Orange Slides to Almost 3-Month Low as Investor Day DisappointsThe carrier is a relative latecomer to an industry push to hive off network infrastructure into separate businesses to boost its value and bring in new investors. There’s big demand for those assets among funds seeking reliable investment returns. Their involvement could help Orange to cut investment costs and boost a share price that’s barely changed in half a decade, frustrating the government, which owns almost a quarter of the company. The company’s new financial targets see capital spending starting to decline from 2022 once it’s made investments in radio-access network sharing deals in Spain and Belgium and completed the bulk of a fiber-to-the-home fixed-line deployment in France. Ecapex, Orange’s term for capital spending, is expected to grow by around 200 million euros in 2020, then stabilize in 2021 before starting to decline the following year.Read more: Orange’s Midterm Outlook Ambition Hindered by Pressures: ReactMaking the most of infrastructure is key to a new target to increase Ebitdaal -- its measure for adjusted operating income -- by 2% to 3% for 2021-2023. That’s after slightly increasing Ebitdaal in 2019 and aiming for “flat positive” Ebitdaal in 2020.The extra profit may not go to shareholders for now: the company set a minimum annual dividend of 70 euro cents until 2023 and said any increase would depend on the amount of organic cash flow.“We believe the short-term guidance is underwhelming versus consensus expectations,” said Barclays analysts in a note. “As such we expect some profit taking after the recent strong stock performance.”Orange stock has gained 1.5% this year through Tuesday, in line with the wider Stoxx Europe 600 telecommunications index, while independent wireless tower company Cellnex has doubled in value.Red LineFor now, Orange’s infrastructure plans are relatively limited compared to those of rivals. While Vodafone Group Plc has set up a separate towers business for which it plans an initial public offering or stake sale, Orange is looking on a market-by-market basis to consider selling non-strategic towers, and will hold on to what it sees as the most valuable sites. While the new tower companies in Europe seek to demonstrate infrastructure value, monetization so far is “very limited,” Jefferies analysts led by Jerry Dellis wrote in a note.Orange will only go so far in separating assets that it still sees as key to its future. Chief Executive Officer Stephane Richard said it is a “red line” for Orange to “keep control” of the infrastructure, while conceding that its share price doesn’t reflect the value of the assets under the current structure.U.S. carriers have been more radical than their European peers in the past decade, selling overall control of their towers to create a large, independent tower industry. Those deals sometimes led to higher costs for the carriers when the tower operators cranked up mast leasing costs.Orange said it will share future fiber broadband deployment in Spain and Poland with other carriers and may find partners for its French fiber rollout. Richard also raised the prospect of a possible IPO for Orange’s Africa and Middle East business, as previously reported by Bloomberg News. (Adds analyst comment in tenth paragraph, detail on fiber plans at end)\--With assistance from Kit Rees.To contact the reporter on this story: Angelina Rascouet in Paris at firstname.lastname@example.orgTo contact the editors responsible for this story: Rebecca Penty at email@example.com, Thomas Pfeiffer, Jennifer RyanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Orange said it planned to carve out its mobile towers in most European countries where it is present, in a move aimed at shoring up the telecom group's value as tough competition in the region has hampered its growth and margins. The French telecoms operator is following similar moves by other European companies that are looking at selling mobile networks as in valuations for infrastructure assets sky-rocket amid growing appetite from investors, such as U.S. private equity firm KKR and Spain's Cellnex. Bigger rivals Deutsche Telekom and Britain's Vodafone have separated their mast mobile assets and are seeking to sell part of them via a listing or a private sale.
The U.K. telecommunications group said it will make AWS’s wavelength service available in Europe, to provide access to edge-computing capabilities to developers, Internet of Things, devices and end users.
Vodafone Business is collaborating with Amazon Web Services (AWS) to make AWS Wavelength available in Europe. AWS Wavelength provides developers with the ability to build applications that serve end users with single-digit millisecond latencies over the 5G network. AWS Wavelength embeds AWS compute and storage services at the edge of telecommunications providers’ 5G networks, enabling developers to serve use cases that require ultra-low latency.
Orange said it planned to carve out its mobile towers in most European countries where it is present, in a move aimed at shoring up the telecom group's value as tough competition in the region has hampered its growth and margins. The Paris-based company will retain control over all these new entities and is hoping to eventually merge them into a European company. "It is a vehicle that will enable us to play a possible role in consolidation at European level," Chief Executive Officer Stephane Richard said in a call with reporters on Wednesday.
Investing.com -- Here is a summary of the most important regulatory news releases from the London Stock Exchange on Wednesday, 4th December. Please refresh for updates.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. The U.S. has been warning other countries not to buy telecommunications gear from China’s Huawei Technologies Co. and ZTE Corp. The government will soon put real money behind the effort.A new agency, called the U.S. International Development Finance Corporation, plans to tap some of its $60 billion budget to help developing countries and businesses purchase equipment from other companies.“The U.S. is very focused on ensuring there’s a viable alternative to Huawei and ZTE. We don’t want to be out there saying no. We want to be out there saying yes,” Adam Boehler, the first chief executive officer of the DFC, said in a recent interview.He declined to discuss specific company talks or how the money would be spent. However, the plans would be a welcome boost for Sweden’s Ericsson AB and Finland’s Nokia Oyj, which have struggled to compete with Huawei and ZTE equipment that’s often cheaper and at least as capable. The U.S. could bankroll Huawei alternatives through loans or loan guarantees to developing nations and companies, or even acquiring minority stakes in emerging makers of competing gear.Ericsson shares jumped as much as 4.2%, while Nokia gained as much as 3.2% following the story.The U.S. government is concerned about Chinese companies dominating the rollout of faster wireless networks known as 5G. The Trump administration has said Huawei and ZTE gear could be used for spying, an allegation the companies have denied. Many countries, including Germany and France, are reluctant to ban individual vendors like Huawei.How Huawei Became a Target for Governments: QuickTakeHuawei and ZTE “are state-owned enterprises or government-driven companies that subsidize their gear in some cases. The price is decent,” Boehler said. “Longer term, what is the cost of that? You shouldn’t think as a sovereign country from a short-term pricing perspective. Our focus is having people understand what they’re giving up and whether it’s worth it to save some money in the short term. It’s not.”The DFC was created last year to provide development financing to lower income and middle-income countries, which covers about half the world. It’s charged with “helping to advance U.S. foreign policy by countering the growing influence of authoritarian regimes” and expects to be fully authorized and funded by Congress in coming months.The DFC’s $60 billion investment cap is more than twice the size of its predecessor. The new agency can take minority equity stakes in companies, a new tool beyond existing capabilities that includes loans, loan guarantees and political risk insurance.Boehler wouldn’t discuss which DFC tools might be used to support purchases of non-Chinese telecom equipment. However, the Financial Times reported in October that U.S. government officials have suggested issuing credit to Huawei’s European rivals.Ericsson and Nokia didn’t respond to requests seeking comment.Another senior government official recently told Bloomberg News that the U.S. is considering funding mechanisms through the DFC that will decrease the cost of alternative commercial 5G gear. The person asked not to be identified discussing unannounced plans.The DFC is also considering whether to become a founding investor in a new technology infrastructure fund that will back emerging companies in 5G, artificial intelligence, quantum computing and other areas, Boehler said. The fund won’t invest in Chinese companies, he noted.“This could support bids on spectrum, investments in infrastructure or the development of a component for 5G,” he said. “We want to make sure that the next crop of companies, if they’re not U.S.-based, that they at least adhere to the principals we care about -- the rule of law and data protection.”“The real issue about Huawei is not China, it’s security of data,” he added. “We want to ensure that companies adhere to certain data-security standards and the protection people’s information.”Ethiopia is in the midst of privatizing its telecom industry and is auctioning spectrum and licenses. Vodacom Group Ltd., majority owned by British wireless giant Vodafone Group Plc, is planning a joint bid with Kenyan operator Safaricom Plc.“That is a live example that we can play in,” Boehler said. “There are no U.S. companies involved at this point, but the British are bidding.”(Updates with Ericsson and Nokia shares in fifth paragraph.)To contact the reporter on this story: Alistair Barr in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Tom Giles at email@example.com, Molly Schuetz, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Shares of India’s largest mobile phone service providers surged after they announced an increase in the cost of subscriptions to their plans, signaling a cut-throat price war in the nation may finally be easing.Bharti Airtel Ltd., the third-largest wireless carrier, said it will increase prices of its most expensive plan by as much as 41%, while Reliance Jio Infocomm Ltd., the biggest telecom company by subscribers in India, will boost tariffs by as much as 40% from Dec. 6. Vodafone Idea Ltd. also announced a new pricing plan for prepaid customers on Sunday, which would be effective Dec. 3.The companies had all indicated in recent weeks that they would increase prices, after the government estimated the industry owes billions of dollars in license fees and spectrum charges.“This indicates a structural shift in the sector after a 3-year period of deep discounting by the new entrant Reliance Jio,” Neerav Dalal, an analyst at Maybank Kim Eng Securities, wrote in a note published Monday. Separately, Morgan Stanley upgraded Bharti Airtel to overweight from equalweight.Vodafone Idea surged about 14% in Mumbai on Monday, Bharti Airtel gained 3.7%, and the latter’s dollar-denominated perpetual bonds jumped the most since they were priced in October. Reliance Industries Ltd., the flagship company of the group that includes the unlisted telecom unit, rose 2.3%. A gauge of 13 companies related to the telecom industry rose 2.6% to the highest level since September 2018.The Indian venture of Vodafone Group Plc may be headed for liquidation unless the government eases off demands for mobile spectrum fees, the phone company’s chief executive officer warned last month. The industry has been caught up in a price war since Asia’s richest man, Mukesh Ambani, launched low-price rival Reliance Jio in 2016.(Updates shares in fifth paragraph)\--With assistance from Jeanette Rodrigues, Ravil Shirodkar and Rahul Satija.To contact the reporters on this story: Anurag Kotoky in New Delhi at firstname.lastname@example.org;Ragini Saxena in Mumbai at email@example.comTo contact the editors responsible for this story: Shamim Adam at firstname.lastname@example.org, Sara Marley, Andrew DavisFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Investing.com -- Quiet descends on global markets as the U.S. celebrates Thanksgiving. Asian and European markets stutter after President Donald Trump signs into law the bill supporting Hong Kong's pro-democracy movement, on fears that it will further delay meaningful detente on trade. Elsewhere, Britain's Conservatives look on course for a resounding win in the general election in December, and the euro zone's economy looks more and more like bottoming out. Here's what you need to know in financial markets on Thursday, 28th November.
The ongoing political uncertainty in the U.K. is having an impact on the stock market. The upcoming general election Dec. 12 is expected to send further jitters across FX markets, which could impact the pound sterling and trigger sharp moves, according to analysts. Prime Minister Boris Johnson pushed for a general election, saying he wanted "to be reasonable with parliament" and giving MPs more time to scrutinize his Brexit withdrawal deal.
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Russia's biggest mobile phone operator MTS has agreed to sell its Ukrainian business to Azerbaijan's Bakcell for what analysts said was a cut-price $734 million. The departure of MTS from the Ukrainian market comes at a low point in Moscow-Kiev bilateral relations and follows a wider trend among Russian companies in quitting foreign markets to focus on domestic investments. MTS acknowledged the "general instability" and "economic deterioration" of Ukraine in the company's 2018 consolidated financial statements.
(Bloomberg) -- The financial distress at Vodafone Group Plc’s Indian venture has dragged down the wealth of Kumar Mangalam Birla, whose group is the second-largest investor in the teetering wireless carrier.The tycoon, who joined forces with the British operator last year, has lost about a third of his fortune since the end of 2017 as mounting losses and debt decimated the equity of the troubled Vodafone Idea Ltd. In addition, shares of his flagship firms that produce chemicals, metals and cement have also tumbled amid a demand slump, eroding his wealth.The net worth of Birla has shrunk to about $6 billion from $9.1 billion two years ago, according to the Bloomberg Billionaires Index. A majority of his fortune is derived from his ownership of Aditya Birla Group, a conglomerate that controls his main holdings.Birla is the latest mogul to burn his fingers in India’s cutthroat phone-services market since Mukesh Ambani’s Reliance Jio Infocomm Ltd. entered the fray in 2016 and drove two rivals to bankruptcy. Formed by the merger of Vodafone’s local unit and Birla’s cellular operator, Vodafone Idea last week reported the worst loss in the nation’s corporate history, while the British partner flagged the risk of a collapse.Aditya Birla Group has a stake in Hindalco Industries Ltd., the world’s largest aluminum rolling company, and owns a part of Grasim Industries Ltd., which controls India’s biggest cement maker.For the Aditya Birla Group, the hit on the telecommunications business couldn’t have come at a worse time. Cooling global growth amid a trade war between the U.S. and China, as well as an economic slowdown at home has curbed demand for industrial raw materials the group produces.Vodafone Idea’s woes deepened last month after India’s top court sided with the government’s demand for $4 billion in fee-arrears from prior years. Already burdened by $14 billion of debt, the order came as a blow to its finances weakened by a brutal war with Jio. Ambani’s operator this year became the country’s No. 1 carrier with 380 million users by offering free calls and cheap data.Shares of Vodafone Idea, in which Birla’s groups owns a little over 27%, have plunged 90% since end-2017 in Mumbai, shrinking its market value to $2.6 billion. The stock fell 1.5% on Friday in a second day of declines.“Vodafone and Idea have been going through a complex merger and, at the same time, trying to keep their heads above water in the battle with Reliance Jio,” said Rishikesha T. Krishnan, a professor of business strategy at the Indian Institute of Management in Bangalore. “The Supreme Court judgment came at the most inopportune time.”Hindalco, which makes aluminum and copper, reported a 33% drop in profit for the latest quarter as the prices of both the metals slid in the three months through September. Shares of Hindalco have tumbled 30% since end-2017, cutting its market value to $5.9 billion. The S&P BSE Sensex has gained 19% in the same period.The slowdown in India’s $2.7 trillion economy has cooled demand for commodities such as cement to chemicals and textiles manufactured by Grasim. Its stock has dropped 33% since end-2017. Vodafone Idea’s troubles have also weighed on Grasim, which owns about 12% of the carrier.This week brought some signs of relief to Vodafone Idea shareholders. Its shares have more than doubled in the four days through Nov. 20 as the three rivals -- including Jio and Bharti Airtel Ltd. -- signaled an end to the price war. Bharti reported a record quarterly loss last week as well.On Wednesday, the government deferred airwave payments for two years, providing some relief for the industry roiled by high license fees and spectrum costs. Finance Minister Nirmala Sitharaman has said she wants all companies to flourish and none to fail.“The tariff hikes are positive,” Jefferies analysts led by Piyush Nahar said in a note this week. Despite the positive move, relief from the government remains crucial, especially for Vodafone Idea, they wrote.(Closes shares in eighth paragraph)\--With assistance from Pei Yi Mak, Ishika Mookerjee, Blake Schmidt and Swansy Afonso.To contact the reporter on this story: P R Sanjai in Mumbai at email@example.comTo contact the editors responsible for this story: Sam Nagarajan at firstname.lastname@example.org, Ravil ShirodkarFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.