Sunrise ‘very confident’ it will land Swiss telecom deal
Chief expects UPC deal to proceed despite one shareholder declining to participate in rights issue
The head of Sunrise Communications remains “very confident” that it will land its acquisition of cable rival UPC after pledging to launch one of Europe’s first 5G networks in Switzerland this month using Huawei equipment.
Sunrise has agreed to buy Liberty Global’s Swiss cable business for SFr6.3bn, which will be funded by a SFr4.1bn rights issue.
The structure of the funding has been designed so that Sunrise is not saddled with a large debt position but has created a problem for the company after Freenet, the German company that owns about a quarter of its shares, said it would not participate in the fundraising. Shares in Sunrise came under significant pressure last week as a result.
Olaf Swantee, chief executive of Sunrise, said he expects shareholders to approve the deal despite the initial reaction. “We can create a really strong internet story for Switzerland. We are very confident this will go through,” he said.
André Krause, chief financial officer of Sunrise, said the high levels of synergies — anticipated at SFr2.8bn — means the price it is paying Liberty is “fair” but that it has “heavy lifting” to do. “It will take time to narrow down some views,” he said of the reaction to the rights issue, which is larger than its market capitalisation.
For Mr Swantee, the UPC acquisition is a critical step in Sunrise’s plan to create one of Europe’s largest “truly independent challengers” in telecoms. If cleared by regulators and shareholders, Sunrise will have a 24 per cent market share in mobile, 31 per cent in television and 29 per cent in broadband, according to the company.
Sunrise is launching 5G in Switzerland this month using equipment from Huawei. It expects to roll out 5G across 150 towns and villages in the country while investing in full fibre in more densely populated areas.
Mr Swantee said that all telecoms companies in Switzerland use Huawei equipment. Moving into the 5G era, he has proposed developing a security operations centre that can test equipment from all equipment vendors. “We need to get an industry-wide approach to this topic,” he said.