European Telecom Services: 1Q26 Wrap - Defensive and optionalities

Research evidence excerpt

European Telecom Services: 1Q26 Wrap - Defensive and optionalities

Equity Research

12 June 2026

European Telecom Services

1Q26 Wrap - Defensive and

optionalities

YTD earnings revisions have been supportive, securing our European Telecom Services

expectations of high-single-digit OpFCF growth for 2026. With NEUTRAL

defensive characteristics (macro, geopolitical, AI) and European Telecom Services

Mathieu Robilliard

potential upside from M&A and possibly AI monetisation, we +44 (0)20 3134 3288

remain positive. mathieu.robilliard@barclays.com

BBI, Paris

Maurice Patrick

The sector has outperformed YTD 2026 (c. +23% TR vs +7% for the SXXP). YTD revisions

+44 (0)20 3134 3622

have been supportive (c. +1% to 2026E EBITDA/OpFCF), securing our expectations of high- maurice.patrick@barclays.com

single-digit OpFCF growth for 2026. 1Q results confirmed a (slowly) improving revenue Barclays, UK

trajectory and, more importantly, continued capex decline. The sector's defensive

Ganesha Nagesha

characteristics (macro, geopolitical, AI) have also been a driver of outperformance, in our +91 (0)22 6175 1712

view. Looking ahead, we do not expect material changes in the trends, with competitive ganesha.nagesha@barclays.com

intensity being stable. We see scope for further outperformance depending largely on Barclays, UK

more consolidation, supported by what we see as an easing EU Competition Law

Maxime Delaugerre

framework. With an agreement having been found in France (see M&A: Godot has arrived, +44 (0)20 3555 5672

8 June 2025), we see more consolidation opportunities in Germany and Italy in particular, maxime.delaugerre@barclays.com

and also longer term in Sweden and potentially Spain. A renewed deterioration of the Barclays, UK