European Telcos: Q1 Wrap: EBITDA growth solid, focus on AI, Consolidation and Africa

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European Telcos: Q1 Wrap: EBITDA growth solid, focus on AI, Consolidation and Africa

UpdateMcost efficiencies across the sector can continue to drive growth, despite mobile

service revenue growth remaining near zero. i. The Nordics have been leading the

way on opex efficiencies with headcount reductions of 15% or more. However, the

pace of growth is expected to slow this year (tougher comps) with Tele 2 targeting

low-to-mid single digit growth, while Telenor downgraded its target from mid single

digit growth to low-to-mid single digit growth. ii. DT reported Q1 EBITDA growth of

+7.5% – some of the strongest performance in the Euro Telco sector, apart from

Tele2 and Helios Towers. We expect Q2 to bring a step-up in German EBITDAaL

growth from +2.5% towards +3% (MSe) due to broadband price rises. Q3 will see

easy comps, a step-up in USC synergy realisation, recent momentum and cost cuts

potentially bringing TMUS EBITDA growth higher (> +12% YoY), while in Germany

lapping wage increases and easy comps should bring German EBITDAaL growth

comfortably >+3% YoY. Read more about the positive catalysts ahead here. iii.

Orange upgraded its FY EBITDAaL guide from c +3% growth to >+3% growth in

2026.

Consolidation – what is happening? The Three Telco consortium (Orange,

Bouygues, Iliad) submitted a new offer to Altice France for the acquisition of SFR in

April. The exclusivity period initially was set to expire on 15 May, but this was then

extended to 5 June. Elsewhere, news flow across other markets with scope for

consolidation (Spain, Italy, Germany) remains fairly sparse. However, Iliad noted that

one if its four strategic priorities remains to play a central role in consolidation in its

markets. We note the plural in this statement, which suggests Iliad could be looking