Pressures mounting: UK mobile market in Q3 2023
Mobile service revenue growth dipped to 5.6% this quarter as the impact of Q2’s price rises began to wane, and the prospective lower price rises look set to slow growth to 2% by the end of 2024.
Bargain-hunting in the sector continues with the MVNOs still taking the lion’s share of net adds, to the detriment of the MNOs.
EE is offering keenly priced convergence and family plans with its new platform—another challenge for the other MNOs who don’t share the same incentives.
Related reports
BT: Strong financials, but challenges still to come
8 November 2023BT continued to perform well financially in Q2, with revenue and EBITDA growth remaining robust, and full year cashflow guidance nudged up.
ARPU growth remained robust across fixed, mobile and Openreach, but subscriber growth was weaker, especially in mobile and Openreach, and this will become more of a concern if it persists.
Maintaining growth across retail divisions will be a challenge as the price rise effect wanes, especially in weak economic conditions, and while Openreach’s FTTP roll-out is going well, full success is still not assured.
Vodafone: Ticking one box, others await
17 November 2023Metrics in Vodafone's Q3 results pointed in various directions with the main positive being revenue growth in Germany, but there were also concerning data points including continued subscriber decline there, and EBITDA across all of Europe.
The company reiterated its guidance for EBITDA and FCF for the year which looks achievable but a stretch. More importantly, these numbers exist only in theory with the Euro-based results looking set to be lower—with implications for the outlook and dividend cover.
Ridding the Group of its Spanish business, and possibly the Italian one too, will be helpful in delivering on the promise of growth, but whether it creates value for shareholders is another matter.
Virgin Media O2: Challenges and opportunities
8 November 2023With a difficult price rise adjustment now behind it, VMO2’s subscriber momentum is much improved, in part aided by accelerated network expansion.
Backbook pricing remains under pressure on the fixed network with revenues down 1.2% in spite of sizeable price rises and footprint expansion—upcoming OTS may exacerbate this issue.
VMO2 has thus far only countered the downside of the UK’s fibre revolution. A new approach to branding and expansion of its addressable market are upside opportunities—with the ultimate potential to even deliver improvements on its previous position.
Peak growth: UK mobile market in Q2 2023
15 August 2023Mobile service revenue growth finally got close to the rate of inflation this quarter, doubling to 7.5% as the operators benefitted from mid-teen price rises.
Growth will wane from here with expected revenue growth of 6% this calendar year and 3% next, with ongoing cost-inflation pressures.
H3G looks set to fare better than others on the top-line in 2024 but its profitability is looking somewhat irredeemable, with negative cashflow even with more normalised capex.
BT: Strong financials, but challenges still to come
8 November 2023BT continued to perform well financially in Q2, with revenue and EBITDA growth remaining robust, and full year cashflow guidance nudged up.
ARPU growth remained robust across fixed, mobile and Openreach, but subscriber growth was weaker, especially in mobile and Openreach, and this will become more of a concern if it persists.
Maintaining growth across retail divisions will be a challenge as the price rise effect wanes, especially in weak economic conditions, and while Openreach’s FTTP roll-out is going well, full success is still not assured.
Vodafone: Ticking one box, others await
17 November 2023Metrics in Vodafone's Q3 results pointed in various directions with the main positive being revenue growth in Germany, but there were also concerning data points including continued subscriber decline there, and EBITDA across all of Europe.
The company reiterated its guidance for EBITDA and FCF for the year which looks achievable but a stretch. More importantly, these numbers exist only in theory with the Euro-based results looking set to be lower—with implications for the outlook and dividend cover.
Ridding the Group of its Spanish business, and possibly the Italian one too, will be helpful in delivering on the promise of growth, but whether it creates value for shareholders is another matter.
Virgin Media O2: Challenges and opportunities
8 November 2023With a difficult price rise adjustment now behind it, VMO2’s subscriber momentum is much improved, in part aided by accelerated network expansion.
Backbook pricing remains under pressure on the fixed network with revenues down 1.2% in spite of sizeable price rises and footprint expansion—upcoming OTS may exacerbate this issue.
VMO2 has thus far only countered the downside of the UK’s fibre revolution. A new approach to branding and expansion of its addressable market are upside opportunities—with the ultimate potential to even deliver improvements on its previous position.
Peak growth: UK mobile market in Q2 2023
15 August 2023Mobile service revenue growth finally got close to the rate of inflation this quarter, doubling to 7.5% as the operators benefitted from mid-teen price rises.
Growth will wane from here with expected revenue growth of 6% this calendar year and 3% next, with ongoing cost-inflation pressures.
H3G looks set to fare better than others on the top-line in 2024 but its profitability is looking somewhat irredeemable, with negative cashflow even with more normalised capex.