Battling on: European mobile in Q1 2024
Service revenue growth was broadly flat at 1.7% as improvements in Germany offset weaknesses in Italy.
The impact of price increases has been mixed, with subscriber losses dulling their upside, and the mixed picture looks set to continue into Q2.
The market continues to be challenging with elevated competition at the low end, pressure from some regulators to increase network coverage, and a somewhat soft EBITDA outlook.
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On the precipice: UK mobile market in Q1 2024
3 June 2024Mobile service revenue growth was broadly flat at +4% this quarter—stronger than expectations as operators begin to raise new-customer pricing.
We expect changes to in-contract price increases (7-9ppts lower than last year’s), and continued re-contracting, to drive service revenue growth into negative territory next quarter.
There has been a marked slowdown in data traffic growth recently, from c.20-30% to 12%—with poor weather, customer spend reduction, and a shift towards lower-quality video likely all impacting.
Changing shape: Vodafone M&A and dividend cut
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The company has grasped the nettle on the trailed dividend cut, bringing the announcement forward from the expected May timing, and halving the payout.
The company is highlighting how well it is positioned to grow now without Italy and Spain, and with the prospect of a better position in the UK. Germany will be more important than ever in this growth equation.
Vodafone: Green shoots in the distance
29 May 2024Vodafone's promise of growth from FY26 has credibility given some headwinds specific to FY25 and some tailwinds emerging thereafter.
In the meantime, the issues over the coming year extend beyond TV losses—with fixed in Germany proving difficult to turn around and the challenge from diminishing in-contract price increases is a significant one (for many telcos).
Currency movements continue to absorb all notional growth (and some) and look set to continue to do so next year. With the company's FCF just half what it was two years ago, it is little wonder that Vodafone halved its dividend payout.
On the precipice: UK mobile market in Q1 2024
3 June 2024Mobile service revenue growth was broadly flat at +4% this quarter—stronger than expectations as operators begin to raise new-customer pricing.
We expect changes to in-contract price increases (7-9ppts lower than last year’s), and continued re-contracting, to drive service revenue growth into negative territory next quarter.
There has been a marked slowdown in data traffic growth recently, from c.20-30% to 12%—with poor weather, customer spend reduction, and a shift towards lower-quality video likely all impacting.
Changing shape: Vodafone M&A and dividend cut
15 March 2024Vodafone has finalised its deal to sell its Italian business to Swisscom for €8bn, opting for greater regulatory certainty and higher upfront proceeds rather than a potentially higher offer from Iliad for an Italian JV.
The company has grasped the nettle on the trailed dividend cut, bringing the announcement forward from the expected May timing, and halving the payout.
The company is highlighting how well it is positioned to grow now without Italy and Spain, and with the prospect of a better position in the UK. Germany will be more important than ever in this growth equation.
Vodafone: Green shoots in the distance
29 May 2024Vodafone's promise of growth from FY26 has credibility given some headwinds specific to FY25 and some tailwinds emerging thereafter.
In the meantime, the issues over the coming year extend beyond TV losses—with fixed in Germany proving difficult to turn around and the challenge from diminishing in-contract price increases is a significant one (for many telcos).
Currency movements continue to absorb all notional growth (and some) and look set to continue to do so next year. With the company's FCF just half what it was two years ago, it is little wonder that Vodafone halved its dividend payout.