Good quarter, but questions remain
Service revenue trends confounded expectations to improve slightly in spite of an expected drag from changes to in-contract pricing.
VodafoneThree appears to be rethinking its speed-tiered pricing on both main brands, perhaps signalling clearer differentiation between them.
For the new government, planning law reform could make a real difference to the sector's investment profile, and hence, its growth ambitions.
Related reports
Virgin Media O2: Hitting the nadir?
31 July 2026VMO2 suffered a dip in revenue growth in Q2, albeit mainly due to price rise phasing issues and the Daisy integration, with EBITDA growth actually improving.
There were some concerning signs however, with mobile net adds remaining stubbornly low. Full year 2026 guidance is still achievable, but a return to growth in 2027 is challenging.
Regulatory developments have been mixed, and VMO2 will have to be careful what it wishes for as regards the future competitive structure of the sector.
Vodafone: Just in time delivery
30 July 2026With Xavier Niel becoming Vodafone’s largest shareholder, the company will be pleased to be able to demonstrate a solid set of Q1 results.
EBITDA upside is coming from Rest of World and appears largely attributable to the consolidation of Safaricom, but is nonetheless reassuring of the prospect of hard-currency growth.
We continue to have reservations about Vodafone’s value over volume strategy, with the upside of price increases often short-lived, and loss of scale a difficult place to come back from.
BT: Growth in prospect
30 July 2026BT’s revenue and EBITDA growth suffered a dip in Q1, but entirely due to one-off/seasonal factors, with underlying metrics strong across the board.
Ofcom has curtailed Openreach’s ability to compete with altnets, while allowing it to compete with VMO2, a much more established and long-term competitor.
The deconsolidation of International makes the potential for a return to sustainable revenue growth much more apparent, with multiple drags (altnets, voice, price mechanics) now firmly on the wane.
Service revenue growth improved to -0.6%, aided by price-increase mechanics, although this will reverse next quarter.
FinTech MVNO launches have been somewhat tentative thus far, and mobile speed-tiering looks set to become the norm.
O2 has stepped up its price aggressiveness in both SIM-only and with-handset unlimited tariffs and is now the price-leading operator brand in this popular segment.
UK Mobile: Escaping the value trap
5 May 2026The low price, low quality vicious cycle in UK mobile is becoming ever more apparent in both revenue pressure and in network quality surveys.
Policymakers meanwhile demand better quality, coverage and resilience which will be tough to deliver without a more robust revenue outlook.
Without radical change, the government’s affordability priority looks set to win out over its growth one, driving the industry towards (self-reinforcing) sub-optimal outcomes for both consumers and growth.
Virgin Media O2: Hitting the nadir?
31 July 2026VMO2 suffered a dip in revenue growth in Q2, albeit mainly due to price rise phasing issues and the Daisy integration, with EBITDA growth actually improving.
There were some concerning signs however, with mobile net adds remaining stubbornly low. Full year 2026 guidance is still achievable, but a return to growth in 2027 is challenging.
Regulatory developments have been mixed, and VMO2 will have to be careful what it wishes for as regards the future competitive structure of the sector.
Vodafone: Just in time delivery
30 July 2026With Xavier Niel becoming Vodafone’s largest shareholder, the company will be pleased to be able to demonstrate a solid set of Q1 results.
EBITDA upside is coming from Rest of World and appears largely attributable to the consolidation of Safaricom, but is nonetheless reassuring of the prospect of hard-currency growth.
We continue to have reservations about Vodafone’s value over volume strategy, with the upside of price increases often short-lived, and loss of scale a difficult place to come back from.
BT: Growth in prospect
30 July 2026BT’s revenue and EBITDA growth suffered a dip in Q1, but entirely due to one-off/seasonal factors, with underlying metrics strong across the board.
Ofcom has curtailed Openreach’s ability to compete with altnets, while allowing it to compete with VMO2, a much more established and long-term competitor.
The deconsolidation of International makes the potential for a return to sustainable revenue growth much more apparent, with multiple drags (altnets, voice, price mechanics) now firmly on the wane.
Service revenue growth improved to -0.6%, aided by price-increase mechanics, although this will reverse next quarter.
FinTech MVNO launches have been somewhat tentative thus far, and mobile speed-tiering looks set to become the norm.
O2 has stepped up its price aggressiveness in both SIM-only and with-handset unlimited tariffs and is now the price-leading operator brand in this popular segment.
UK Mobile: Escaping the value trap
5 May 2026The low price, low quality vicious cycle in UK mobile is becoming ever more apparent in both revenue pressure and in network quality surveys.
Policymakers meanwhile demand better quality, coverage and resilience which will be tough to deliver without a more robust revenue outlook.
Without radical change, the government’s affordability priority looks set to win out over its growth one, driving the industry towards (self-reinforcing) sub-optimal outcomes for both consumers and growth.