Blowing up on earth and into space: UK mobile market in Q4 2025
Service revenue worsened by 1ppt this quarter to -1.7%, but this is heavily distorted by one-off factors, in particular the blowback from O2’s controversial price increases.
For the same reason, MVNOs enjoyed their best quarter ever, particularly Sky and Tesco Mobile.
The launch of ‘O2 Satellite’ will bring a welcome brand halo-effect. Limitations of satellite direct-to-device both make the consumer proposition a tricky one, and protect the mobile industry from cannibalisation.
Related reports
Virgin Media O2: Slowdown into 2026
25 February 2026VMO2 ended 2025 on a slowing note, with broadband still being hit by altnets and mobile impacted by negative publicity surrounding an October pricing change.
Guidance for 2026 at 3-5% declines for proforma service revenue and EBITDA looks bleak, driven by current momentum and various built-in technical factors, including wholesale payments to nexfibre.
We are not convinced that the agreed nexfibre /Netomnia deal is in any sense a panacea for VMO2’s issues, but there are other green shoots that could help the company back to growth beyond 2026.
Vodafone: Steady(ish)
10 February 2026Service revenue trends and themes were broadly consistent with those of last quarter, with management commentary suggesting German EBITDA decline of 8%+ this year.
Strong growth from VodafoneThree, better underlying trends in Germany, and fortuitous currency moves are all likely to be required to hit analyst estimates for next year, and there are reasons to be optimistic about prospects for at least some of them.
VodafoneThree’s mobile strategy seems to be quite defensive for now, save for a foray into the family market, and its approach to FWA looks likely to be quite cautious too.
BT: The altnet threat starts to recede
10 February 2026BT had a solid Q3 in financial terms, with various oneoffs hitting headline growth rates but underlying trends very much robust.
The highlight was reduced broadband line losses for Openreach, both in the quarter and in prospect, with retail altnets slowing faster than CityFibre improves.
Recent developments put the pace of altnet consolidation in doubt, but we expect reduced pressure on BT Consumer and Openreach in 2026 regardless.
Spotlight on price increases: UK mobile market in Q3 2025
11 December 2025The expected service revenue boost from in-contract price increases failed to materialize this quarter, nullifying the upside surprise last quarter.
Traffic growth picked up again to 17%, lending further weight to the view that at least some of the recent sharp slowdown was somewhat one-off in nature.
Government statistics imply steep mobile price inflation while the opposite is true—which may help to diffuse the current furore over in-contract price increases.
The slowdown in telecoms traffic volume growth post-pandemic has persisted for far longer than a simple hangover effect would imply, and has spread from fixed broadband to mobile in many markets
The eventual emergence of the metaverse and/or AI-generated traffic may mitigate this trend, but it is hard to see growth ever returning to a sustained 30%+ per annum level, with around 10-15% likely to prove the new normal
While far from disastrous for telcos, it does have important implications, such as the need to structure pricing more carefully, focus on network quality over capacity, and be more wary of the threat (or opportunity) from MVNOs, FWA and satellite
Social tariffs: On the edge of reason
21 July 2023Social tariffs have provided relief for some at a time of household income squeeze and otherwise unavoidable high inflation-driven telco price increases.
Adoption has risen but remains very low, limiting their effectiveness, and more widespread adoption would expose their shortcomings, with the risk of penalizing low cost operators and significantly increasing prices for non-adopters (by up to 20%).
A better approach might be to recognize that affordability issues are narrower but deeper than current social tariffs can address, with fuller, centrally funded subsidies targeted more narrowly at those most in need.
Virgin Media O2: Slowdown into 2026
25 February 2026VMO2 ended 2025 on a slowing note, with broadband still being hit by altnets and mobile impacted by negative publicity surrounding an October pricing change.
Guidance for 2026 at 3-5% declines for proforma service revenue and EBITDA looks bleak, driven by current momentum and various built-in technical factors, including wholesale payments to nexfibre.
We are not convinced that the agreed nexfibre /Netomnia deal is in any sense a panacea for VMO2’s issues, but there are other green shoots that could help the company back to growth beyond 2026.
Vodafone: Steady(ish)
10 February 2026Service revenue trends and themes were broadly consistent with those of last quarter, with management commentary suggesting German EBITDA decline of 8%+ this year.
Strong growth from VodafoneThree, better underlying trends in Germany, and fortuitous currency moves are all likely to be required to hit analyst estimates for next year, and there are reasons to be optimistic about prospects for at least some of them.
VodafoneThree’s mobile strategy seems to be quite defensive for now, save for a foray into the family market, and its approach to FWA looks likely to be quite cautious too.BT: The altnet threat starts to recede
10 February 2026BT had a solid Q3 in financial terms, with various oneoffs hitting headline growth rates but underlying trends very much robust.
The highlight was reduced broadband line losses for Openreach, both in the quarter and in prospect, with retail altnets slowing faster than CityFibre improves.
Recent developments put the pace of altnet consolidation in doubt, but we expect reduced pressure on BT Consumer and Openreach in 2026 regardless.
Spotlight on price increases: UK mobile market in Q3 2025
11 December 2025The expected service revenue boost from in-contract price increases failed to materialize this quarter, nullifying the upside surprise last quarter.
Traffic growth picked up again to 17%, lending further weight to the view that at least some of the recent sharp slowdown was somewhat one-off in nature.
Government statistics imply steep mobile price inflation while the opposite is true—which may help to diffuse the current furore over in-contract price increases.The slowdown in telecoms traffic volume growth post-pandemic has persisted for far longer than a simple hangover effect would imply, and has spread from fixed broadband to mobile in many markets
The eventual emergence of the metaverse and/or AI-generated traffic may mitigate this trend, but it is hard to see growth ever returning to a sustained 30%+ per annum level, with around 10-15% likely to prove the new normal
While far from disastrous for telcos, it does have important implications, such as the need to structure pricing more carefully, focus on network quality over capacity, and be more wary of the threat (or opportunity) from MVNOs, FWA and satellite
Social tariffs: On the edge of reason
21 July 2023Social tariffs have provided relief for some at a time of household income squeeze and otherwise unavoidable high inflation-driven telco price increases.
Adoption has risen but remains very low, limiting their effectiveness, and more widespread adoption would expose their shortcomings, with the risk of penalizing low cost operators and significantly increasing prices for non-adopters (by up to 20%).
A better approach might be to recognize that affordability issues are narrower but deeper than current social tariffs can address, with fuller, centrally funded subsidies targeted more narrowly at those most in need.