Vodafone’s European organic service revenue growth dropped again in the September quarter, to -1.3%, and we estimate that it continues to underperform its competitors’ growth by two percentage points, thus losing market share. Margins also fell, as the company’s cost reduction measures continue to fail to stop costs rising
The UK business (EAUS) is continuing to improve ahead of guidance as expected and its turnround can now be judged a success. Management has announced an aggressive plan to extract synergy from the recently acquired Thus
Just three players now account for most French broadband connections: Orange’s DSL market share is closing on 50%, Iliad’s rose to 25% from consolidation with Alice, while SFR’s dropped to 23.7%, with Neuf’s rebrand imminent. Cable remains a minimal presence on broadband
Vodafone Europe’s service revenue growth dropped by two full percentage points in the quarter to June 2008; Spain plummeted from +5.1% to -2.5%, but the UK and Italy’s underlying growth also fell, with only Germany stable
In our view the potential for synergies from an acquisition of Thus by C&W, though more limited than might be supposed, would still have a significant impact on the combined entity at the EBITDA level
Iliad is to recover the No. 2 spot on the French broadband market, behind France Télécom’s Orange, after acquiring Alice, ending Telecom Italia’s ill fated five-year French venture
Vodafone’s Q4 revenues were healthy if a little weak, with underlying growth slowing from 2.0% to 1.8%, but the improvement in Germany is very welcome
International performance continued to be weak apart from Macau, although well within EBITDA guidance. Turnaround in Jamaica remains a significant challenge
Vodafone UK has announced a tariff refresh that includes ‘free’ mobile browsing with all of its new contract plans
Iliad will be challenged to meet its target of a steady EBITDA margin of 36% in 2008 despite further cuts in mobile termination charges due to the continued drift of the subscriber mix to higher cost (for Iliad) full telephony packages. Some benefit to cash flow could result from reduced charges for one-off LLU services to be mandated by regulator ARCEP