Seeing higher capex and lower revenues, CS cuts Belgian telcos estimates

Orange Belgium NV

20/09/2022 07:27

** Credit Suisse cuts its estimates for Belgian telecoms
citing two-thirds drop of FCF by 2025 due to fibre overbuild and
possible entry of a fourth mobile player on the market 
    ** CS expects a significant fibre overbuild in Belgium
estimating that over 12 billion euros ($12.02 billion) could be
spent upgrading copper and cable to full fibre, which would
create a need to hike fixed line prices for consumers by around
20 euros/month    
    ** "Such a price hike would be unrealistic and believe there
needs to be wholesale rationalisation of fibre capex across the
market to improve returns" - CS
    ** Possible new market entrant poses risk of about 20%
reduction in market mobile service revenues, CS says, and could
reach about 10% of the consumer postpaid market five years from
launch
    ** CS cuts Telenet  TNET.BR  to "neutral" from "outperform",
now being more pessimistic on topline and FCF generation, but
seeing recent share-price moves have captured these changes to
expectations
    ** For Proximus  PROX.BR  ("underperform"), CS cites impact
of a fourth entrant and structural risks related to the fibre
investments, cuts 2024 EBITDA estimate by 3%
    ** CS cuts its 2024 EBITDA forecast by 8% for Orange Belgium
 OBEL.BR  ("neutral") to reflect a large decline in mobile-only
revenues

($1 = 0.9982 euros)

 (Reporting by Michal Aleksandrowicz)
 ((michal.aleksandrowicz@tr.com))