Vodafone: Optimism takes a trim
The share price reaction to Vodafone’s FY26 results appears to be centred around the outlook for European EBITDAaL in FY27, with consensus hitherto optimistically expecting a very marked turnaround in underlying performance.
Similarly, there should not have been an expectation of further buybacks, with prospective leverage towards the top of target range given recent deals.
Vodafone’s value over volume strategy cost it dearly in subscriber numbers in Q4 – a dangerous strategy in a scale industry. Less demanding guidance would give it more commercial flexibility
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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.
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.
Vodafone: Tracking the narrative
17 November 2025Q2 results were something of a mixed bag. Headline growth was solid thanks to 1&1 onboarding, and whilst underlying trends in Germany for both revenue and EBITDA were still firmly negative, the former stabilised and the latter improved.
Tightening of EBITDA guidance in Europe is welcome, implying a flat headline performance and an underlying EBITDA decline of no more than 4%, with the potential for better, we believe.
VodafoneThree synergies and cloud reselling should take over the growth mantle when the 1&1 boost fades, facilitating some limited capacity for dividend growth.
Telecoms transformed: Vodafone3 merger impact
26 February 2025With the formation of Vodafone3, we envisage continued intense competition at the low end of the mobile market, a ramping up of pressure at the top end over time, and some opportunities in the short term.
New information on spectrum trading confirms the view that BT/EE will be most capacity constrained, but with various strategic options available to it.
Expected EBITDA growth of 9% p.a. at Vodafone3 would allow Vodafone Group to almost double its excess FCF. Budgeting for buying CK Hutchison’s stake, however, may curtail Vodafone’s spending over the coming years.
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.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.Vodafone: Tracking the narrative
17 November 2025Q2 results were something of a mixed bag. Headline growth was solid thanks to 1&1 onboarding, and whilst underlying trends in Germany for both revenue and EBITDA were still firmly negative, the former stabilised and the latter improved.
Tightening of EBITDA guidance in Europe is welcome, implying a flat headline performance and an underlying EBITDA decline of no more than 4%, with the potential for better, we believe.
VodafoneThree synergies and cloud reselling should take over the growth mantle when the 1&1 boost fades, facilitating some limited capacity for dividend growth.
Telecoms transformed: Vodafone3 merger impact
26 February 2025With the formation of Vodafone3, we envisage continued intense competition at the low end of the mobile market, a ramping up of pressure at the top end over time, and some opportunities in the short term.
New information on spectrum trading confirms the view that BT/EE will be most capacity constrained, but with various strategic options available to it.
Expected EBITDA growth of 9% p.a. at Vodafone3 would allow Vodafone Group to almost double its excess FCF. Budgeting for buying CK Hutchison’s stake, however, may curtail Vodafone’s spending over the coming years.