•  Richard Price Vanessa Dougere 

    Telecoms – Sector focus

    Author: Richard Price, Managing Director and Vanessa Dougere, Relationship Director
    Publication date: 01.08.2010

    In the past few months European governments have prevented a number of telecoms mergers from taking place. For example, the merger between Orange and Sunrise Telecom collapsed following a decision by the Swiss regulator to veto it on competitive grounds, claiming that the union would have created a duopolistic market.

    Telefónica finally buys Vivo

    Likewise, in July the Portuguese government exercised its golden sharen order to prevent Telefónica’s €7.15bn buyout of the Brazilian mobile company Vivo from Portugal Telecom (PT). The Portuguese government justified its action on the grounds of national security. Only a few weeks later, however, a €7.5bn deal was reached between PT and Telefónica, with the blessing of the Portuguese government. Lloyds is pleased to support Telefónica in this transaction at the top level alongside 15 other banks, as well as 13 banks in the second tier. The loan consists of two parts. The first, worth €3bn, will cover the refinancing of Telefónica O2 Czech Republic. The second, worth €5bn, will help finance Telefónica’s acquisition of PT’s 50% stake in Brasilcel, the Holland-based holding company that owns 60% of the Brazilian mobile operator Vivo.

    3G frequency sales anticipate 4G auction in 2011

    In France, SFR and Orange managed to secure the two remaining blocks of 3G frequencies available, paying a combined total of €600m. The French telecom regulator, ARCEP, said the applications were assessed on the commitments made to improving hosting conditions for mobile virtual network operators. It is expected that 4G frequencies will be auctioned in the first half of 2011, however there are still disagreements over the allocation process.

    The German telecoms regulator announced the close of its spectrum auction on May 20, having raised just under €4.4bn. Because it represented European operators’ first opportunity to buy networks suitable for long-term evolution (LTE), the auction will be seen as a benchmark for upcoming tenders across the continent. Vodafone acquired 12 blocks of frequency for €1.42bn, Telefónica paid €1.38bn for 11 blocks, Deutsche Telekom picked up 10 blocks for €1.3bn and KPN’s E-Plus secured 8 blocks for €283m. The auction didn’t raise as much as expected because some frequencies were deemed less valuable than others.

    The UK 800MHz spectrum auction is delayed following the change in the UK government. However, the new communications minister, Ed Vaizey, is set to launch the £5bn auction in the first half of 2011. The new spectrum will allow high-speed networks to be rolled out at the lowest possible cost and should bring higher-speed services to rural areas.

    In the second half of 2010, Lloyds Banking Group looks forward to providing continued support to all its telecom clients

    Source: This article was first published in Lloyds Banking Group - Perspective Magazine Edition 2.

2/21/2018 1:25:43 AM