Proximus rolls out 5G in Belgium, cuts dividend

BRUSSELS, March 31 (Reuters) - Belgian telecom group Proximus said on Tuesday it would launch 5G telecoms services on April 1, the first operator to do so in the country, while also announcing plans to cut its dividend.

Worldwide, 5G technology is expected to deliver a huge leap in the speed and capacity of communications and enhance connections between devices from smart fridges to driverless cars that are expected to run on 5G networks.

Former state monopoly Proximus said its 5G rollout would have an initial coverage in 30 Belgian cities and at the country’s main airport on the edge of Brussels.

“To achieve this, Proximus uses spectrum in existing spectrum holdings, deployed on existing antennas and within current EMF (electric and magnetic fields) norms,” the company said in a statement.

Belgium’s plans for a 5G spectrum auction is at an impasse due to a disagreement between federal and regional governments.

The industry regulator - the Belgian Institute for Postal services and Telecommunications - in February suggested granting temporary licences for the 3.5GHz band, which would enable an initial rollout of 5G services. This would also ensure the continuity of 2G and 3G rights after the current licence expires in 2021.

Proximus said that because the 5G technology is not yet available in Belgium it would start commercial sales of BKK Electronics’ mobile phone model known as Oppo Find X2 pro, which it said was “the very first 5G-enabled device on the Belgian market.”

Proximus, which competes with rivals Telenet and Orange Belgium, said it was difficult to assess the overall impact of the coronavirus crisis, but it was clear that the epidemic would influence the group’s business on all levels.

The company said it would cut its dividend for 2020, 2021 and 2022 from 1.5 euros ($1.64) per share to 1.2 euros. Proximus said its “EBITDA-CAPEX” level for 2020 was expected to be between 780-800 million euros.

Proximus said it aimed to return to profitable growth from 2022 by expanding its customer base to more than 2.1 million internet lines and would aim to reach 2.4 million connected households by 2030.

As a result, the company need to invest more up to 2025 and expects a maximum annual capital expenditure of 1.3 billion euros.

To finance this, Proximus expects to raise its total debt by up to 600 million euros and to sell some assets, including real estate, with total proceeds of as much as 700 million euros.

$1 = 0.9122 euros Reporting by Marine Strauss @StraussMarine. Editing by Jane Merriman