Eurobites: Bouygues Telecom scraps guidance amid COVID-19 uncertainty

Also in today's EMEA regional roundup: Slovakia presses on with 5G auction plans; O2 cuts ties with Dixons Carphone; Telecom Italia sets up new supervisory body; optical equipment makers to feel Europe's 5G pain.

  • France's Bouygues Telecom has suspended its financial guidance after witnessing what it described as "a significant reduction in gross adds" due to the lack of commercial activity amid the COVID-19 pandemic. Despite the suspension, the operator, a part of the Bouygues conglomerate, said the pandemic has had a limited impact on its telecom activities so far. As with other operators, the most notable effect has been a sharp increase in network traffic as the lockdown makes people increasingly dependent on their residential telecom services. In the last two weeks, mobile and fixed usage is up 30% and 50% respectively, according to Bouygues.

  • Slovakia's telecom regulator pressed on with plans for a 5G auction, despite the outbreak of COVID-19 that has led some European countries to postpone awards. Authorities this week issued a call for tenders for individual licenses in the 700MHz, 900MHz and 1800MHz bands. Candidates must apply by May 25 to be considered, and winners will be entitled to use frequencies from July. The spectrum bands are not those typically associated with 5G services, which in Europe are usually delivered over mid-band frequencies in the 3.5GHz range and adjacent bands. Austria, the Czech Republic, France and Spain are among the European countries to have postponed similar auction plans as they deal with the impact of COVID-19.

  • UK mobile service provider O2 severed ties with electronics retailer Dixons Carphone after the companies reportedly failed to reach an agreement on their future relationship. The update came after Dixons Carphone announced plans to close all 531 of its standalone retail stores in the UK as part of a major cost-cutting move that will claim 2,900 jobs. Dixons Carphone said it would continue to operate about 305 shops located within large Currys PC World stores as well as its online business. The move, it said, reflected a shift in consumer-buying habits. A spokesperson for O2 told Reuters: "While we've worked hard over the past year to put a number of options on the table, it has not been possible to reach a new agreement as they've made clear to the market that they wish to take a new strategic direction and change the relationship they had with mobile operators."

  • Telecom Italia announced the formation of a new supervisory body designed to improve the operator's "internal control and risk management system." The body's chairman will be Giuseppe Pignatone, a high-profile Italian lawyer, and it will also include Telecom Italia Statutory Auditor Anna Doro, Head of Audit Gianfranco Cariola and another legal expert called Carlo Piergallini. "We are pleased to have enhanced TIM's control and supervisory system by creating a separate body whose members will include two highly regarded professionals as Giuseppe Pignatone, who will be its chairman, and Professor Carlo Piergallini," said Telecom Italia Chairman Salvatore Rossi in a statement.

  • A delay to 5G projects in COVID-19-stricken Europe could hurt optical equipment companies such as Ciena and Infinera, according to analysts at B. Riley FBR. In a research note, Dave Kang warned that "most of the 5G-related activities could be delayed until the pandemic situation improves," noting the postponement of spectrum auctions in Spain, France, Portugal and Austria. Europe accounts for 32% of sales at Infinera and 16% of those at Ciena, according to Kang. "Even though Infinera and Ciena have quantified the pandemic impact for Q1, we believe lockdowns could have equal or greater impact in Q2," he said.

    — Iain Morris, International Editor, Light Reading

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