- Publisher Enders Analysis.
- Publish Date January 4, 2021
- Sector Mobile and Wireless Technology, UK, UK Broadband.
- Company

- Mobile growth improved very marginally to -3.6% this quarter as roaming revenues were harder hit and competitive intensity bounced back, but usage recovered from the lockdowns in Q2 and cuts to intra-EU calls were annualised
- Italy’s fortunes took a turn for the worse as roaming hit particularly hard and Iliad resurged. After a spate of downgrades to the outlook last quarter, there were some tentative upgrades in Q3 although the tone remains cautious
- The diminished drag from roaming is the primary positive driver from here. Although lockdowns of some degree are in place in Q4, their impact will be less severe than those in Q2
Contents
Executive summary: steady now, brighter outlook
Reported and underlying revenue growth
Largely flat but a lot going on
Guidance edges up ever so slightly from Q2 lows
Telecom operators financial guidance detail
Vodafone overtakes its rivals…in some ways
Slow-pedal on German convergence begins to pay dividends
COVID-19 short-term impacts mixed but firmly negative overall
Mobile network performance resilient in the face of COVID-19
COVID-19 creates longer-term challenges
Second 5G auctions to take place in UK and Spain
Infrastructure sharing gears up to reduce costs and debt levels
Europe seems to be opting for less severe Huawei bans than the UK
Full annualisation of intra-EU calls cuts a 1-1.5ppts boost this quarter
End-of-contract notifications coming into force: a drag for most through 2021
Country analysis
UK: flat-lining but lots of moving parts
France: roaming hit hard, other fundamentals steady
Germany: O2’s revenues bounce back, net adds recover for all
Italy: roaming and a resurgent Iliad bite
Spain: post-lockdown bounce-back
Appendix
Revenue trends driven by shifts in with-handset bundles and means of distribution
IFRS 15 revenue trend distortions
UK operator performance: neither service nor total revenue growth are perfect measures
Mobile termination rates (MTR) impact de minimis
Reported mobile service revenue
Consolidation and convergence timeline
List of charts/tables
Reported mobile revenue growth—top 5 European markets*
Service revenue growth by market
Service revenue growth by operator group
COVID-19 related financial guidance changes (or lack thereof)
Mobile service revenue growth versus peers
Contract net adds in top 4 European markets
German converged customer net adds (000)
T-Mobile versus Vodafone contract ARPU growth
Anecdotal evidence of changes in data traffic
Europe average mobile network speeds (Mbps)
Europe ‘top 5’ GDP vs service revenue growth
Recent and forthcoming spectrum auctions
Spectrum auction results in Germany
Vodafone tower/network share deals
Approaches to Huawei across Europe
Intra-EU calling prices—Euro cents per minute prior to cuts
Potential drag from out-of-contract customers spinning down
Service revenue growth
Contract net additions (000)
Reported mobile service revenue growth by operator
Service revenue growth
Contract net additions (000)
Service revenue growth by operator
Service revenue growth
Contract net adds (000)
Service revenue growth by operator
Service revenue growth
Total subscriber net adds (000)
Service revenue growth by operator
Service revenue growth
Contract net additions (000)
Service revenue growth by operator
IFRS 15 effect of indirect and direct mobile contract distribution
BT/EE total revenue and service revenue growth (IFRS 15)
O2 total revenue and service revenue growth (IFRS 15)
Vodafone total revenue and service revenue growth (IFRS 15)
H3G total revenue and service revenue growth (IFRS 15)
Regulatory impact—top 5 European markets
European MTR rates (Euro cents)
Regulatory impact by market
Service revenue and service revenue growth
European MNO consolidation timeline