Vodafone's headline revenue growth of +3.7% is actually a small decline once Rest of World exchange depreciation is accounted for. Europe, however, delivered an improving revenue trend to +0.4%, as signalled at Vodafone's FY results announcement.

The mix and operating trends are less positive, with growth driven by low-margin B2B, and subscriber losses accelerating in German fixed. Investors will be weighing up whether these results are green shoots of a recovery or another false dawn.

Although the company may reach its guided EBITDA on assumed exchange rates, it looks set to fall short in euro terms, which has implications for FCF and dividend cover.

Social tariffs have provided relief for some at a time of household income squeeze and otherwise unavoidable high inflation-driven telco price increases.

Adoption has risen but remains very low, limiting their effectiveness, and more widespread adoption would expose their shortcomings, with the risk of penalizing low cost operators and significantly increasing prices for non-adopters (by up to 20%).

A better approach might be to recognize that affordability issues are narrower but deeper than current social tariffs can address, with fuller, centrally funded subsidies targeted more narrowly at those most in need.

Market revenue growth turned (slightly) negative in Q1 2023, driven by weak demand and the waning of 2022 price boosts.

Next quarter will benefit from the high 2023 existing customer price increase, but this effect will wane across the year, and go into reverse next year due to lower inflation.

Other factors are mixed, with new-customer pricing tentatively rising, many smaller ISPs struggling, but altnet gains still likely to get worse before they get better.

BT hit all its targets for the 2022/23 financial year, ending the year with a (predicted) consumer service revenue growth slowdown but a surprisingly strong B2B performance fully compensating.

Investors were disappointed in the outlook for cashflow in 2023/24, with tax benefits being absorbed by the cost of faster-than-expected full fibre adoption, ignoring that this is good news rather than bad.

Next quarter the company will get a substantial boost from the price rises, and in the longer term an even more substantial boost from the completion of the full fibre build is looking increasingly secure.

On 18 May 2023, Enders Analysis co-hosted the annual Media and Telecoms 2023 & Beyond Conference with Deloitte, sponsored by Barclays, Financial Times, and Salesforce

With over 550 attendees and over 40 speakers from the TMT sector, including leading executives, policy leaders, and industry experts, the conference focused on how new technologies, regulation, and infrastructure will impact the future of the industry

This is the edited transcript of Session One, covering: the future of digital experiences, the streaming economy, and harnessing AI for good. Videos of the presentations will be available on the conference website

Providing home broadband connections via a mobile network (FWA) is gaining traction in certain markets where local conditions make it a viable alternative to fibre, such as New Zealand, Italy and the US.

FWA is a time-limited opportunity for most, with mobile traffic growth absorbing capacity for it and fixed traffic growth depleting the economic case. An ultimate shift to fibre is the best exit strategy.

In the UK, H3G's spare capacity could support up to 1 million FWA customers on a ten-year view—enough for a meaningful revenue fillip for H3G, but not enough to seriously disrupt the fixed market.

BT’s revenue and EBITDA growth fell in the December quarter, with consumer broadband in particular suffering from weakening volumes and ARPU, as last year’s price rise benefit wanes and broader macro pressures hit.

Openreach, however, had an improved quarter, with the broadband market returning to growth, full fibre build and take-up progressing at or ahead of expectations, and the altnet threat fairly subdued.

Inflationary price rises in April will give a temporary fillip, and likely help drive a decent 2023/24 for Group financials, but it will take much longer for full fibre benefits to really be felt.

Telcos are pressing the EU to force big tech to make a ‘fair contribution’ to their network costs, although this has drawn opposition from telecoms regulators, who rightly fear risks to the wider ecosystem

There are valid concerns to address however, with content providers not currently incentivised to deliver traffic efficiently, and telcos constrained by net neutrality rules from doing anything about it, resulting in unnecessary costs and service degradation

However, there may be better ways to address these, through reforming the implementation of existing rules to encourage more efficient content delivery, and allowing the telcos to provide enhanced delivery routes of their own, with Ofcom’s approach in the UK a step in this direction, but perhaps not a step far enough

Openreach has simultaneously announced that it is applying a full 11% inflationary price increase across all its key products, and effectively removing this price increase (and a bit more) for full fibre products through an update to its ‘Equinox’ special offer pricing.

Equinox 2's purpose is described as to encourage migration of existing connections to full fibre, but this is hard to see, and it looks more like a defence against migration to altnets and/or VMO2’s emerging wholesale proposition, albeit one that seems like it will not fall foul of regulatory rules.

Openreach will still benefit from the 11% price increase across most of its revenue base in 2022/23, and the shift to FTTP will remain accretive. Openreach’s customers will suffer from the price rise, but with a stronger outlook as they move to FTTP, while the altnet/VMO2 wholesale economics are as-you-were.

BT maintained (proforma) revenue growth at 1% in Q2, EBITDA growth was a healthy 5%, and retail net adds were solid across broadband and mobile, with evidence of an economic crisis hard to discern.

Investors have concerns around Openreach, with a market-driven slowdown in wholesale broadband, extra capex this year, and a further ‘special offer’ price cut being negotiated for next year combining to create understandable anxiety.

We think that Openreach continues to have a healthy outlook overall, with there being greater risks in consumer and business retail revenue in toughening economic conditions, albeit this is a storm that BT has weathered very well so far.