Freenet retains Sunrise shares in any case

How the Switzerland at the weekend writes in its current issue, Freenet will remain on board even in the event of a UPC takeover. "No matter how that turns out, we won't look at the issue of changing our share position there again until 2021," Freenet CEO Christoph Vilanek told Reuters news agency.

In order to buy UPC for CHF 6.3 billion, Sunrise shareholders must approve a capital increase of CHF 4.1 billion. In this case, the shareholding of the largest shareholder Freenet - the company currently holds 24.5 percent - would shrink. Sunrise is currently valued on the stock exchange at just under 3.6 billion francs. Whether the owners agree to a purchase will be revealed at the Extraordinary General Meeting on October 23.

"...then good night!"

Freenet is against a UPC purchase because it believes 5G will make the cable network, which Sunrise is "keen" on, redundant anyway. "I believe that in five years, TV cable will be completely irrelevant," Vilanek told news agency AWP last week. "If the deal is expensive anyway, and there are only five years for payback, then good night!"

UPC upgrades in the battle for bandwidths

Meanwhile, UPC is not thinking of leaving the data issue to the 5G operators Swisscom, Sunrise and Salt. Last week, the company increased its speed to 1 gigabit per second throughout Switzerland. With manageable investments, UPC should be able to achieve speeds of up to 10 gigabits per second in the future. In Switzerland, only Salt Fibre achieves this via fiber optics - at least on paper. In the future, UPC's networks will even allow speeds of up to 25 gigabits per second. It is not yet clear who will need this crazy speed, but the largest cable network operator, which claims to be able to reach 6 million people, seems well equipped for the future.

5G is (still) nowhere near as superior as Freenet assumes

With regard to the 5G argument, there are good reasons for Sunrise to nevertheless rely on UPC. Sunrise has commissioned expert Marc Furrer to write a white paper highlighting the value of the cable network. The NZZ on Sunday the report is available - the newspaper summarizes the most important points:

• 5G is much faster than today's mobile connections. However, 5G still has a long way to go before it reaches the bandwidths of fiber optics or a fiber-optic-supported coax connection (such as the one UPC has).
• Private individuals and companies are constantly demanding higher bandwidths - for movies or games, for example. 5G will not be able to meet this demand for a long time yet.
• To operate 5G, the antennas must be connected to the fixed network. The UPC network also helps Sunrise as a mobile network operator here.
• The capacity of 5G is severely limited, especially inside buildings.
• The expansion of 5G is being held back by public resistance. The author of the white paper describes this as "admittedly irrational.

Competition could benefit from takeover

The NZZ on Sunday adds further advantages of a takeover. For example, the expensive sports rights acquired by UPC's MySports channel could be distributed among more customers. In addition, Sunrise would prevent a foreign competitor from entering the market and cement its position as number two in the country for years to come.

However, the newspaper also points out that shareholders who have a short or medium-term commitment to Sunrise have more to lose than to gain. The integration of UPC into Sunrise will be neither quick nor smooth. According to ZKB analyst Andreas Müller, the competition also sees this as an opportunity: during the transition phase, Swisscom, for example, hopes to win back customers it has lost to Sunrise in recent years.