The proposed €4m rights issue, if successful, will be used to re-accelerate the roll-out of GO Internet's (MI:GO) high speed network both within its existing regions and beyond, via its new agreement with Enel Open Fibre (MI:ENEI) Open Fibre. While the offer is dilutive to earnings, the share price has been heavily marked down and appears to discount a continued slowing of subscriber growth, rather than the pick-up we expect as the network roll-out gets back on track.
Rights issue to support faster network expansion
If successful, the funds raised from the rights issue will enable GO to re-accelerate the pace at which it installs its high speed network, which had been managed in recent months in order to conserve liquidity. The introduction of 100Mbps base stations during 2015 was a milestone in the group’s strategy to double its network coverage over the next few years and the planned introduction of next generation ‘fibre like’ 4.5G kit towards the end of this year will represent another significant step forward for the group. In addition, in July, GO announced a major new initiative to extend its reach into new regions in Italy through its partnership with Enel Open Fibre. Meanwhile it continues to monitor the ‘pending’ spectrum auctions, which could further support its strategy to widen its footprint.
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