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Eurobites: 3 Denmark spins off masts

Also in today's EMEA regional roundup: Italy's Fastweb thrives during pandemic; United Internet reports sales growth in Germany; Finland's Teleste stumbles badly.

  • 3 Denmark, the Danish bit of CK Hutchison's European telecom empire, became the latest operator to announce a carve-out of its masts, a move that has swept Europe's telecom sector as indebted operators experiment with different forms of financial engineering. 3 Denmark said it would set up a new masts company called HI3G Networks that will own 1,275 masts plus their electrical installations and cooling systems. HI3G will rent space on its infrastructure to 3 Denmark as well as other service providers building mobile networks. Employees that have previously worked on infrastructure will be transferred to the new sister company, which is to be led by Morten Ekebjaerg Petersen, a long-serving executive at 3 Denmark. "We come from the start with a good amount of orders from 3 on new masts to be established," he said. "We also see more opportunities in expanding the business by, for example, offering other companies space in our existing masts and other infrastructure." (See Disadvantage Towers? Vodafone plays game of risk and Cellnex builds €11B war chest for towers landgrab.)

  • Pandemic? What pandemic? Italian broadband operator Fastweb, a wholly owned subsidiary of Swisscom, seemed to have an asymptomatic reaction to the virus in the recent second quarter, reporting growth in subscriptions, revenues and profits. Fixed-line customer numbers rose 4% for the first half, to around 2.69 million, compared with the figure one year earlier. Meanwhile, first-half revenues were up 5%, to €1.1 billion (US$1.3 billion), and earnings rose 5%, to €365 million ($432 million). The rate of revenue growth was a sharp improvement on the 0.3% Fastweb reported this time last year. Fastweb said it also spent €276 million ($327 million) in the first six months on network rollout. It has teamed up with mobile operator Wind Tre on the rollout of a joint 5G network, is building fixed wireless access networks in partnership with Linkem and is in talks with Telecom Italia and the government about the creation of a single Italian fiber network in which it would hold a small stake. Italy's family of telecom operators is looking increasingly incestuous. (See Fastweb, Wind Tre take 5G network sharing to the limit.)

  • Germany's United Internet managed an impressive 4% year-on-year increase in first-half sales, to €2.66 billion ($3.2 billion), on subscriber growth. Despite the improvement, its earnings fell 1.5%, to €620.5 million ($734 million), although United Internet said the comparison was unfair because of one-off revenue it made last from some divestment activity. Excluding that, earnings would have risen 2%. United Internet markets broadband services in Germany and is also building a new German mobile network, after securing 5G spectrum in a government auction last year, through its 1&1 Drillisch subsidiary. Rollout costs weighed on profitability, said the operator. The update came two days after United Internet raised its full-year outlook to sales growth of 4%, having previously forecast no increase. (See Eurobites: HMD raises $230M for Nokia-branded phones push.)

  • Finland's Teleste stumbled badly in the second quarter, blaming a net loss and sharp fall in sales on the impact of coronavirus. Sales at the company, which mainly develops video and broadband technologies, dropped a fifth year-on-year, to about €33.5 million ($39.6 million), as Teleste swung to a net loss of €2 million ($2.4 million) from a profit of €1.4 million ($1.7 million) a year earlier. CEO Jukka Rinnevaara said there had been a "substantial year-on-year decline in the orders received" as operators in various countries "restricted or suspended their broadband network construction." The company has been laying off staff and slashing other costs as it tries to protect its business.

    — Iain Morris, International Editor, Light Reading

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