Last dip? European mobile in Q1 2021
Mobile growth dipped again to -3.3% for what we hope is the final time as widespread lockdowns impacted paid-for usage in most countries.
BT and Vodafone joined the other European MNOs in guiding to improving trends in 2021—expecting EBITDA momentum to be 7-10ppts better—slightly ahead of the 5-7ppts for the European operators.
We may even see positive revenue growth next quarter thanks to the simple annualisation of the first lockdown, with the UK the most to gain and Germany and Italy the least. Investment is creeping up too with higher capex guidance and better 5G momentum.
Related reports
The last lockdown caused service revenues to dip again to -7% in spite of some easing of roaming pressure and the annualisation of some early pandemic weakness.
The heralded, elevated in-contract price rises will fail to drive higher growth this year due to lower inflation—we estimate zero impact at BT/EE relative to 2020 and a reduction in revenue momentum of around 0.5ppts for each of the other operators.
The annualisation of the first lockdown is the most meaningful upside from here with a boost of around 5-7ppts possible. However, some pandemic upsides will also unwind, notably lower churn and enhanced B2B demand with the latter vulnerable to the end of furlough support and the economy.
Vodafone: Throwing money at the problem
21 May 2021Vodafone’s additional investment to boost a growth story that isn’t yet delivering failed to impress investors who value cashflow much more than promises for tomorrow, particularly given Vodafone’s track record with restructuring plans and product development.
It’s a surprising time to be splashing the cash with leverage still finely balanced and riding on Vodafone delivering a 10ppt turnaround in EBITDA growth next year vs last. Commercial activity looks set to continue to be dominated by EBITDA promises.
Selling a stake in Vantage Towers (temporarily) solved a leverage problem, but is creating a control problem, with the uncertain level of its future capex adding to investor concerns.
COVID-19 telecoms impact: Resilience in the short term, but maintaining may be challenging
27 March 2020Demand for telecoms capacity is booming, and the networks can (broadly) cope, with the increase primarily in off-peak demand. However, as the crisis continues, maintaining resilience becomes more challenging.
In the short term, the demand for ample, reliable connectivity coupled with reduced churn will add resilience to operator financials, although there may be significant weak spots especially in business markets.
However, as the crisis goes on, the pressure on capacity and network maintenance may grow, and the impact of the dramatic economic slowdown on consumers and businesses will also put pressure on financials.
The last lockdown caused service revenues to dip again to -7% in spite of some easing of roaming pressure and the annualisation of some early pandemic weakness.
The heralded, elevated in-contract price rises will fail to drive higher growth this year due to lower inflation—we estimate zero impact at BT/EE relative to 2020 and a reduction in revenue momentum of around 0.5ppts for each of the other operators.
The annualisation of the first lockdown is the most meaningful upside from here with a boost of around 5-7ppts possible. However, some pandemic upsides will also unwind, notably lower churn and enhanced B2B demand with the latter vulnerable to the end of furlough support and the economy.
Vodafone: Throwing money at the problem
21 May 2021Vodafone’s additional investment to boost a growth story that isn’t yet delivering failed to impress investors who value cashflow much more than promises for tomorrow, particularly given Vodafone’s track record with restructuring plans and product development.
It’s a surprising time to be splashing the cash with leverage still finely balanced and riding on Vodafone delivering a 10ppt turnaround in EBITDA growth next year vs last. Commercial activity looks set to continue to be dominated by EBITDA promises.
Selling a stake in Vantage Towers (temporarily) solved a leverage problem, but is creating a control problem, with the uncertain level of its future capex adding to investor concerns.
COVID-19 telecoms impact: Resilience in the short term, but maintaining may be challenging
27 March 2020Demand for telecoms capacity is booming, and the networks can (broadly) cope, with the increase primarily in off-peak demand. However, as the crisis continues, maintaining resilience becomes more challenging.
In the short term, the demand for ample, reliable connectivity coupled with reduced churn will add resilience to operator financials, although there may be significant weak spots especially in business markets.
However, as the crisis goes on, the pressure on capacity and network maintenance may grow, and the impact of the dramatic economic slowdown on consumers and businesses will also put pressure on financials.