Spectrum Auction: 3 Telecom Stocks with Over 30% One-Year Return in Focus

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Summary

  • The UK government is expected to get £1.4 billion from mobile spectrum auction.
  • Vodafone Group Plc, Telefonica UK, EE, and Hutchison 3G bid for 34 lots of spectrum.

The United Kingdom government is expected to get £1.4 billion, less than half of what experts and analysts were expecting, from mobile spectrum auction. In total, 200 MHz of spectrum was sold, divided across the 700 MHz band and the 3.6-3.8 GHz band which is 5G’s primary airwaves. The 700 MHz band is the best known for providing wide area coverage.

Vodafone Group Plc (LON:VOD), Telefonica UK, EE, and Hutchison 3G bid for 34 lots of spectrum. The companies would use them for 5G roll out in future. BT Group Plc’s (LON: BT.A) brand EE invested £452 million in the spectrum, Hutchison £280 million, Vodafone £176.4 million, and Telephonica £168 million.

Also read: O2 fined £10.5m for Overcharging Subscribers for Almost A Decade

As the telecom industry is gearing up for 5G spectrum launch, a look at three telecom stocks that have over 30 per cent one-year return:

Helios Towers Plc (LON:HTWS)

The FTSE 250 telecommunications has given a robust one-year return of 44.79 per cent. The company reported an operating profit of $56.3 million in FY20 against a loss of $4.5 million in FY19. Its adjusted EBITDA was up 10 per cent in FY20 to $226.6 million against $205.2 million in FY19.

It reported a full-year revenue increase of 7 per cent to $414 million against $387.8 million a year ago, driven mainly by growth in sites and tenancies. The company had announced in 2020 that it had entered an agreement with Free Senegal, Senegal’s second-largest mobile operator, for buying 1,220 tower portfolios, and it is expected to close in the first half of 2021.

The shares of the company were trading at GBX 154, up by 1.20 per cent and had a market capitalisation of £1,528 million as on 17 March at 12:43 GMT+1.

Vodafone Group Plc (LON:VOD)

The stock of the FTSE 100 British multinational telecom company has had a one-year return of 37.93 per cent. For Q3 FY21, the company’s total revenue fell 4.7 per cent to €11,201million against €11,750 million in the same period a year ago.

Also read: Vodafone (LON: VOD), O2 And Three Join Hands to Tackle Rural Coverage

The company said that its adjusted EBITDA for FY21 would be between €14.4 - €14.6 billion. It also said that free cash flow would be around €5 billion for FY21. Group CEO Nick Read said that the IPO of Vantage Towers is scheduled for early 2021 and was on track.

The company’s shares were trading at GBX 135.66, up by 0.85 per cent and had a market capitalisation of £38,019.94 million as on 17 March at 12:55 GMT+1.

 BT Group Plc’s (LON: BT.A)

The British multinational telecommunications company stock, a constituent of the FTSE 100 index, gave a one-year return of 32.06 per cent.

For the nine-month period up to 31 December 2020, the company posted a drop of 7 per cent in revenue to £16,058 million against £17,246 in the same period a year ago. The company’s adjusted EBITDA dropped 5 per cent to £5,603 million against £5,900 million in the same period a year ago.

Also read: BT Group PLC (LON: BT.A) announces recruitment plans 

CEO Philip Jansen said that the company was not expecting any material impact from Brexit deal, and the company’s EBITDA for 2022-23 would be at least £7.9 billion.

The shares of the company, with a market capitalisation of £14,201.54 million, were trading at GBX 149.90, up by 4.68 per cent on 17 March at 12:59 GMT+1.

 

 

 

 

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