Q2 Wrap: Recovery after a rocky start

Research evidence excerpt

Not for redistribution without written consent of Morgan Stanley

M

Update

August 7, 2026 02:30 PM GMT

European Telcos | Europe

Morgan Stanley & Co. International plc+

Lindsey C Zastawny

Equity Analyst

Q2 Wrap: Recovery after a

rocky start

Emmet B Kelly

Equity Analyst

Terence Tsui

Equity Analyst

As Q2 results finished this week, we present our key takeaways.

Telco EBITDA growth remained consistent, although results

were more mixed relative to expectations, with a slight recovery

seen after a rocky start to Q2 reporting. Towers were as

expected & continue to rebut the risks of satellite.

Harrison Williams, CFA

Equity Analyst

Telecommunications Services

Europe

Industry View

Attractive

The European Telco sector has seen a slight improvement through the earnings

season, up 15% YTD, now slightly outperforming the broader European market by

+1ppt. A better second half of earnings, largely from the incumbents, helped to ease

investor concerns following a rockier-than-normal start to the quarter. The TowerCos

also had a very solid quarter, with a push back from the management teams on the

threat of satellites, ultimately concluding that satellites are a complementary

technology that will never fully replace terrestrial networks.

Telcos in numbers:

• 50% of companies beat on EBITDA, an encouraging turnaround after the

first half of Q2 earnings - with the misses largely coming from the Nordics

(Elisa, Tele2, Telenor) and Liberty Global. Q2 EBITDA growth was solid at

+3.1%, albeit lower than the +4.9% achieved in Q1 (market-cap weighted, excl

Kyivstar). After delivering strong 2025 EBITDA growth on the back of cost

action, Nordic EBITDA growth is now slowing to more normalised levels,

particularly at Tele2 and Telenor.

• Top line equally mixed. 53% of companies delivered a beat, 20% were in line

and 27% have missed. The four misses came from the Nordics (Elisa,

Telenor), Liberty Global, and OTE. The Nordic misses were driven by weak

mobile service revenues and competitive market backdrops. Liberty Global

was largely driven by Liberty Growth which we note can be lumpy, while

OTE was due to the phasing out of low-margin international activities.

• ~45% of guides reiterated.…