Vodafone Europe’s organic revenue growth improved again, from -3.2% to -2.4%, with it enjoying a fair share of the improvement in mobile market growth driven by improving economies across Europe

EBITDA margin fell, partly as a result of weak cost control but mainly because SAC/SRCs rose as Vodafone subsidised consumers getting more expensive handsets, which involves a short term (but not long term) profitability hit

Vodafone Europe could move back into positive revenue growth this year as it rides the wave of market recovery, but short term margin targets will be hard to hit as handset subsidies continue to rise

TTG’s indicative full year financial results were solid, but were flattered by the acquisition of Tiscali UK in July 2009

Subscriber growth at TalkTalk is exceptionally strong thanks to effective marketing and a strong proposition, if somewhat at the expense of the acquired businesses

Guidance for the new financial year looks undemanding given additional uplift from Tiscali UK; further underlying progress will depend crucially on continuing strong growth at TalkTalk and old fashioned operating leverage based on a single set of platforms, rather than new developments such as high speed broadband or TV

CPW grew its core European mobile handset distribution business in underlying like-for-like revenue terms by 3% in the March quarter, and its profits grew by 18% in the 2009/10 year, although connection volumes and actual revenue fell during the quarter

Growth is improving with the recovery, but not dramatically, as its strong competitive performance during the recession is unwinding to some extent. Nonetheless, 2010/11 should see continued improvement, with handset trends still generally going in CPW’s direction

The company is currently more than covering the start-up losses at its ‘big box’ consumer electronics business in the UK through steady growth at CPW Europe and dramatic growth in the US, and should continue to do so in 2010/11. However, thereafter there is far more uncertainty, as the big box business will have to start trading well to prevent accelerating losses, and we have no visibility over its prospects as yet

Vodafone’s European revenue growth improved by 1.4 percentage points in the December 2009 quarter to reach -3.2%, the first improvement since the start of the economic slowdown in 2008

While data revenue is growing fast in absolute terms, its contribution to growth is flat to slightly down, with the main driver being more traditional services improving due to the recovery in year-on-year GDP growth

We expect revenue growth to continue to improve as economic comparables improve, with a return to positive growth likely by the end of 2010

At TalkTalk Group (TTG) net broadband additions were solid, possibly helped by stronger growth in total market demand; but churn at Tiscali UK appears to remain high

TTG revenue was heavily distorted by the Tiscali acquisition but appears to remain in gradual decline on a like-for-like basis, due to continuing decline in non-broadband customers

Carphone Warehouse’s like-for-like distribution revenue showed a firm pick-up in the quarter, with it likely enjoying the first quarter of significantly improving market growth since the recession started

Vodafone Live represents an attempt to claw back some of the initiative from handset manufacturers, and to offer product and services that add to revenue. We look at the early evidence from the UK about the design of this package, its consumer appeal and the likely impact on ARPU. Vodafone is launching this new campaign with a Java-enabled camera phone from Sharp. It is putting tens of millions of pounds behind Live, apparently targeting the product at young urban males, a demographic group that has become very loyal to Nokia. The first phone is attractive and well featured, but we question whether it is of sufficiently general appeal significantly to influence overall ARPU in European markets, particularly in light of the low levels of interest we are finding in our consumer research on camera phones.

Our most recent survey of handset purchase intentions shows a dramatic increase in interest in buying a new phone among UK adults. 39% of handset owners claim an intention to purchase in the next year, compared to about 30% in the last three bi-monthly surveys.