Some of Europe’s biggest carriers, including Vodafone, Deutsche Telekom, Telefónica, Orange and Telecom Italia, reported quarterly earnings that beat expectations, leading to renewed optimism about a market recovery in Europe.
“You have further weight to the theme that European wireless is recovering,” Guy Peddy, an analyst with Macquarie Research, told Businessweek. Peddy called the slew of more positive than expected results “a stampede.”
A few highlights:
Telefónica’s declining sales have slowed. According to the Spanish group’s report (PDF), sales dropped 6.6% in the third quarter compared to a 9.1% decrease in the first quarter. Operating income before interest, depreciation and amortization was €4.27 billion ($5.3 billion), representing a fall of 8.7%, but it still beat estimates.
Vodafone reported an improvement in its service revenue, which fell 1.5% compared to a predicted decline of 2.6%. In its half-year report, the world’s No. 2 mobile operator also expressed confidence in its ₤19 billion ($30.2 billion) Project Spring investment program. Vodafone’s LTE coverage in Europe is now at 59% compared to 32% a year ago, and the company claims 10.5 million LTE users on the continent.
At DT, adjusted earnings before interest, taxes, depreciation and amortization came in at €4.58 billion ($5.7 billion) against expected earnings of €4.55 billion. This represented a decline of 1.8% over the same quarter of the previous year. Net revenue rose 0.8% over the same period of 2013. DT, which owns T-Mobile US, gets the majority of its revenue from abroad; this quarter the German phone giant reported that revenue abroad surpassed 60% for the first time. In the past, DT has appeared ready to sell its U.S. unit, but recently said it would keep its stake in T-Mobile US for at least another year.
More telecom news from Europe:
U.K. plans new spectrum auction. Telecom regulator Ofcom announced plans to auction spectrum that could be used for 4G services. Ofcom is inviting bids for spectrum allotments in the 2.3 GHz and 3.4 GHz bands. The auction is expected to take place in late 2015 or early 2016.
Report: the German government may sell its stake in DT. The German government currently owns about 31.7% of Deutsche Telekom, which grew out of a formerly state-owned company. A finance ministry document seen by Reuters outlines the plan to sell a number of government stakes, including Deutsche Telekom, Deutsche Post and the rail operator Deutsche Bahn. The sale of the DT stake alone could generate more than €17 billion ($21.2 billion).
Vodafone will enter British broadband and pay-TV market. Faced with increasing competition in the U.K.’s mobile market, Vodafone plans to launch broadband and TV services in the spring of 2015. Vodafone will join the ranks of telecom companies offering bundled services in the country, including BT, BSkyB, EE, TalkTalk and Virgin Media.
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