The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Rivaldo. If you’re still around what’s your current take on clx? I see Spirent are getting a few broker upgrades. TIA.
UK altnet scene ripe for M&A
VM O2 CEO Lutz Schüler seems a keen advocate for M&A in the UK’s crowded fibre infrastructure scene.
Responding to analyst questions at Telefónica’s Annual Results presentation last month, Schüler said VM O2 would be “open for consolidation” and likely have the backing of shareholders Telefónica and Liberty. Increased capital costs (brought about partially by high inflation rates), he maintained, pulled into “deep question” whether many altnets are sustainable long-term projects.
He cited “very low” altnet penetration rates, of between 15% and 18%, as a vulnerability for smaller challengers.
Schüler’s comments followed quickly on the heels of reports that VM O2 was among several providers considering offers for altnet Trooli, which could be worth in excess of £100m. The Kent-based fibre builder passed 275,000 premises with its fibre network as of August 2022.
As well as funding constraints and the limitations on household budgets, a potential driver for M&A among UK altnets is Openreach’s proposed Equinox 2 pricing discount (Telefónicawatch, #170), currently under review by Ofcom, which — its critics claim — is specifically designed to disincentivise ISP migration from Openreach to alternative players.
To CityFibre’s Mesch, the pricing proposal represents an affront to market competition and, as he put it, comes “straight out of the playbook of a dominant operator using its market power and advantages to maintain its dominance”.
Copy of Ofcom response:
https://www.ofcom.org.uk/__data/assets/pdf_file/0026/255527/letter-melanie-dawes-to-philip-jansen-060223.pdf
Copy of Jansens letter:
https://www.ofcom.org.uk/__data/assets/pdf_file/0027/255528/letter-philip-jansen-to-melanie-dawes-060223.pdf
Silly me. Director buys we’re dated 13th
I’m happy for the directors to be getting shares at these prices. Will their buys show in the trades on this site?
It’s worth registering. Some very interesting articles on altnets and this one that mentions Drahi and possible spin off of Openreach. https://www.telcotitans.com/btwatch/dont-bank-on-the-big-two-for-buyouts-brit-altnets-warned/5454.article
From last year so possible already posted.