Covid-19 consolidation will become a theme in the coming months as companies and private equity firms search for salvation or opportunities in the current crisis.

However, today’s news confirming Spanish telco Telefónica is talking to cable group Liberty Global, about a deal to merge mobile operator O2 and Virgin Media in the UK, may have been in the works for a while. The fact they are considering a 50-50 joint venture may be a sign of these cautious, cash-constricted times though, and Lex says the €10.4bn Telefónica might receive would help relieve it of its €37.7bn debt burden.

Nic Fildes reports such a tie-up would reshape the British telecoms market. O2’s mobile service would be combined with Virgin’s fixed-line phone, cable TV and broadband offerings to compete directly with the incumbent BT. Virgin, like Sky, has only a virtual operation currently, using other mobile carriers’ networks.

SocGen analysts say BT has many other issues on its plate, from fibre rollout to dividends (which it may cut this week): “However, a Virgin-O2 deal could see the UK market move faster to convergence, something that could help BT and marginalise the mobile-only and fixed-only players in our view.”

Separately, the UK’s sale of spectrum for 5G networks could be significantly delayed after O2 warned the telecoms regulator that it plans a legal challenge to the rules it has set for the auction.

The Internet of (Five) Things

1. Silver Lake follows Facebook on Jio stake
Silicon Valley private equity firm Silver Lake has agreed to invest Rs56.6bn ($750m) in Reliance Jio, less than two weeks after Facebook took a $5.7bn, 10 per cent stake in the Indian mobile operator. “The market potential they are addressing is enormous,” said Silver Lake’s co-chief executive Egon Durban.

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2. Amazon VP quits over coronavirus handling
A senior software engineer at Amazon has quit in protest at the firing of whistleblowers who had raised concerns about the safety of the online retailer’s warehouses during the Covid-19 crisis.

3. Intel moves on Moovit
Intel is reported to be close to buying the Israeli public transport and mobility app Moovit for around $1bn. Lex says this is all about the data for the chipmaker and it would sit comfortably with its 2017 acquisition of Israeli autonomous vehicle sensor company Mobileye.

4. Murdochs regroup to challenge BBC
The Murdoch family has recruited David Rhodes, a US television news veteran, for a push into video news in the UK, where its longstanding appetite for taking on the BBC is growing again 18 months after selling Sky to Comcast. The family is already using its Times newspaper to launch Times Radio this summer to challenge BBC Radio Four.

5. Tech FT comment: Moritz on Covid-19
Venture capitalist Michael Moritz says the plague sweeping the world has turbocharged the growth of the internet and catapulted us into the future: “In the space of March 2020, many businesses fast-forwarded to 2025. For some this meant a surge in activity, but for a vast number doomsday has come early.”

Tech week ahead

Tech earnings are past their peak, but there are still plenty of trends to track as companies report in the coming days:

TuesdayWalt Disney reports after the close, with investors expecting more detail on how its Disney+ streaming service has performed with the lockdown. Video game publishers should be doing well and the biggest in the US — Activision Blizzard and Electronic Arts — both report.

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Wednesday Ecommerce enabler Shopify and the New York Times report before the bell, with earnings from ride-sharing company Lyft and payment companies PayPal and Square coming after the close. Look out for Etsy, Fitbit and Zynga as well. In the UK, broadcaster ITV, which has just cancelled this year’s Love Island reality series, delivers an update on first-quarter trading.

Thursday — Japanese gaming giant Nintendo will report full-year results. Its earnings will include figures for the first 12 days of video game sales of Animal Crossing: New Horizons, which has become a global hit offering an escape for quarantined players. The Switch console has also seen a big rise in demand. In the UK, telecoms group BT reports full-year results, with investors watching closely to see if it joins other blue-chips in recent weeks and cuts its dividend. Newspaper publisher Reach will also update the market, while in the US, Uber, Dropbox, Booking.com and Roku are due to report.

Tech tools — Apple’s new MacBook Pro

Apple today announced an update to the 13in MacBook Pro. It now gets the new Magic Keyboard, first introduced on the 16in MacBook Pro and added to the MacBook Air in March. Standard storage on its solid-state drive has been doubled, starting at 256GB. It has faster memory and processors and can be ordered immediately, starting at $1,299 (£1,299).



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