Half Year 2025 Vodafone Group Public Ltd Co Earnings Call
Pause in business, we have seen a good reacceleration in trends in Q2 with the drag from project phasing unwinding.
Growth in digital services was particularly strong up 18% and this is why we continue to expand our capabilities and product effect.
We're also continuing to take significant steps to simplify our business.
We have now action then communicated over 80% of our role reduction program and I've also commercialize our shared operations, having finalized our partnership with Accenture.
On our portfolio actions, we are close to completing the reorganization of the group as we work towards securing approvals in Italy, and the U K in the next few weeks.
And finally in our newly created Vodafone investments Division that has been a significant amount of activity.
Thus, most notably selling down a further stake in vantage towers for $1 3 billion in order to deliver the cocoa infrastructure. We originally planned.
In summary.
Our performance is in line with expectations as we move through this year of transition.
The actions, we've been taking will deliver growth for Vodafone this year and support the further acceleration into FY 'twenty six.
With that Luca and I are looking forward to your questions.
Speaker Change: Thank you Margherita as a reminder to analysts please on to pose one question to give everybody a chance to speak.
With that our first question comes from Maurice Patrick at Barclays. Morris. Please go ahead.
Maurice Patrick: Good morning, guys. Hopefully you can you can see me well.
Speaker Change: Maybe just start off with a question on Germany. Please Javier surprised given the size clearly a lot of moving parts in the German business. When your results as you show in the presentation that clearly impacted by the <unk> migration.
Speaker Change: Lesser degree the lapping of the price increases from a year ago. Your historic comments suggest a U shaped recovery I think in Germany.
Speaker Change: And you talked about the market being healthy overall I know you've got a one on one wholesale coming in I think from a third quarter sort of a 100 million euros a year run rate once it's fully there, but you're still a program that has negative so curious to understand the trajectory. We can staging specifically broadband attach service revenues and EBITDA over the next couple of quarters in this neck.
Speaker Change: Sure.
Speaker Change: That'd be helpful. Thank you.
Speaker Change: Thank you Marie.
Speaker Change: I think the net adds and then hand over to Luca for service revenue and EBITDA.
Speaker Change: As you will have seen in the results today, we have seen an improvement in our net adds performance in fixed and this is because the overhang that we had been suffering from the price increases we've done on our base is now behind us.
Speaker Change: In the quarter, you will have seen that the cable net adds are only marginally negative DSL on deal that I and is still negative and there we are starting to see that within the markets that are some are first signs I would say of migration towards fiber.
Speaker Change: So our end.
Speaker Change: What you should expect is two things first of all we have.
Speaker Change: As I was just mentioning changed the perimeter of what we sell in Germany.
Speaker Change: In addition to our $25 million cables cable households, we have now opened to fiber wholesale which is bringing on board with Vodafone and order 5 million households or footprint.
Speaker Change: Today, obviously this will continue to grow as the rollouts grow and we'd see growth, but call. It now 30 million households, so 75% of German hours, those to which we will now be able.
Speaker Change: Two market gigabit products.
Speaker Change: This is.
A very good level of penetration ahead of any other player.
Speaker Change: And.
Speaker Change: You should expect US that's the second point on your sort of forecast.
Speaker Change: You should expect us to see net adds continuing to improve.
Through the course of this year.
Speaker Change: We are seeing this already in October and stepping back obviously outside I guess, he's a fair share of off.
Speaker Change: Market growth and we have now in place I think all the tools to deliver on our targets with.
Speaker Change: The well invested in fiber ice cable network and footprint fiber that will allow our customers in the DSL areas to get also gigabit.
Speaker Change: Uh huh.
Speaker Change: Products, but on the.
Speaker Change: Very important service, having an EBITDA trends.
Speaker Change: Obviously that is quite a rich question, so, but I'll try to give you a comprehensive answer but first of all indeed, we have talked from the beginning of this year about.
Speaker Change: Q2 being.
Speaker Change: At the bottom of a U shape of our performance in Germany, and actually also beyond honestly speaking as a result of the weight of Germany.
Speaker Change: What we have seen in Q2 is indeed that.
Speaker Change: We have reached the peak of the MDU transitional impacts with three 8% year over year headwind or two 6%.
Speaker Change: Quarter over quarter and in addition to that as you rightfully mentioned those well be lapping impact of our broadband price increases contributed another one under half the center from a quarter over quarter perspective, So what to expect now from.
Year onwards.
Speaker Change: First of all in Q3, you should.
Speaker Change: Expect a broadly similar performance in Germany is the one that you have seen in Q2 for a variety of reasons one the run rates of the <unk> transition will obviously also stay with us in Q3 before we start to lap it in Q4.
Speaker Change: We had last year the first smaller.
Speaker Change: So of the transition in addition to that we will have another smaller cohorts from last year that has been going through the price increase in broadband being added on the flip side, we will see first smaller positive effect from our commercial performed.
Speaker Change: Improvement as well as admittedly small impacts in the quarter from one on one than in Q4.
Speaker Change: We'll start to see an improvement in the performance as one on one is becoming a bigger part of the pie in total I would.
Speaker Change: Estimate of roughly $50 million benefit from one on one for this year and most of it is going to actually land in Q4, and then again the MDU impact will start to.
Speaker Change: To fade away and therefore Q4 will be better in Germany, and then as we move into next year with of course, the one on one effect coming through the full ramp from the second half year and the MDU impact fully lapping that's of course, where we expect Germany.
Speaker Change: To be back on a positive trajectory as we had always talks about together with the improved commercial trends. So that Margherita has also been highlighting.
Speaker Change: We then take a look at the EBITDA performance I would expect the second half year to also be broadly similar to the performance that we've seen in the first half year, because the MDU impact will be also.
Speaker Change: Pretty much the same we will have less impact from the investment into the program. Because this is now <unk>.
Speaker Change: Adding off but on the flip side, we will have a higher absolute revenue drag in the second half year as we were just reaching the full run rate in the second quarter. So the impact from the MD use will be pretty much.
Speaker Change: The same.
Speaker Change: We'll also have slightly lower benefit from the energy.
Speaker Change: Expense unwind, which was big in the first half year against that and we will have the increasing benefit from the one on one program and we will continue frankly to invest into our commercial performance.
Speaker Change: Into our brand recognition in the market as we have done in the first half as well.
Speaker Change: That aside as we move into FY 2006.
Speaker Change: The same applies as on the revenue front, we will see Germany back is a positive contributor.
Speaker Change: Through EBITDA growth.
Speaker Change: Also because.
Speaker Change: We will have additional help on the cost side from the ongoing workforce transformation program that will then reach.
Speaker Change: It's.
Speaker Change: Run rate contribution that we're expecting from it plus of course some of the investments that we are taking this year for example into Gen. II driven productivity will actually pay off so from that perspective, Germany will certainly be back in positive growth territory on the EBITDA front.
Speaker Change: Thank you Dan.
Speaker Change: Thank you Marie.
Speaker Change: Thank you. The next question comes from Emmet Kelly at Morgan Stanley. Please go ahead.
Emmet Kelly: Yes, good morning, everyone and thank you for taking my.
Speaker Change: And it relates to the service revenue trajectory for the remainder of the year. Please so as you flagged in Q1 that would be a slowdown in the group.
Speaker Change: Driven by Germany, you've obviously, given the main moving parts there and Luca on the German business can you, maybe say a little bit about how do you see the rest of the group on service revenues in.
Speaker Change: In particular, what's happening in Vodacom UK on Turkey. Thank you very much.
Speaker Change: Yes, that's fair.
Speaker Change: Probably all mine I guess, so if I start from the group perspective also there we have.
Speaker Change: Set in the past that Q2 would see us at the bottom end.
Speaker Change: That is indeed true and remains true so we would.
Speaker Change: Actually expect slightly better growth in the second half year from a group perspective.
Speaker Change: Compared to what we have seen now in Q2, the main components of that will be as I said, Germany.
Speaker Change: In a broadly similar shape in Q3, and then with.
Speaker Change: Acceleration into Q4.
Speaker Change: In the UK.
Speaker Change: We would expect.
Speaker Change: <unk>.
Speaker Change: Continued.
Speaker Change: Small improvement in growth trends you have seen that we moved from flat to plus one 2% in the UK in Q2, I would expect that we can continue to do slightly better than that our consumer business is doing very very well, we expect a better second half in business as well so the U K should actually.
Speaker Change: <unk> be quite positive for us in the second half.
Speaker Change: The rest of the European markets.
Speaker Change: They are I would say.
Speaker Change: Solid and predictable.
Speaker Change: Yes.
Speaker Change: Mueller both profile.
Speaker Change: As you have seen it in the first half year and then between our emerging markets in Africa I would certainly expect.
Speaker Change: An additional opportunity for growth for higher growth in particular in South Africa, where we had a more difficult first half year.
Speaker Change: Also year over year comparison perspective, So Africa should do slightly better than in the first half.
Speaker Change: Turkey, obviously has been firing on all cylinders and has had a tremendous performance by the way.
Speaker Change: Also in.
Speaker Change: Euro terms and including the fact that they have been gaining market share I think they will continue to do very well.
Speaker Change: But at some point obviously this grow.
Speaker Change: Growth rates will have to start to moderate so when you then make the marks against all of the moving parts.
Think we should see.
Speaker Change: Moderate step up in growth in the second half.
Yes, I think the opportunities are too.
Speaker Change: South out to <unk>, because we have just achieved the highest market share of Vodafone in Turkey, So really excellent execution that.
Speaker Change: Stewart, Thank you very much.
Speaker Change: Thank you. The next question comes from appeal to Tony at J P. Morgan. Please go ahead.
Tony: Great morning.
Speaker Change: So much taking the question if I could maybe just ask.
Speaker Change: Question around the outlook.
Speaker Change: There's two bits to it one is just operationally I guess the challenge with Germany has been it's been tricky to understand.
Speaker Change: Really commercially what's going in the market and really how we should think about what that means for that U shape recovery you talked about so could you maybe just unpack for us a little bit commercially what you've done.
Speaker Change: <unk> already maybe what you need to do still just to give us a bit more comfort around the turnarounds that youre talking to here in the <unk>.
Speaker Change: But if it is if I guess I think more strategically.
You've reshaped the group quite materially over the last 12 months.
Speaker Change: If we think going forward, how should we think about your priorities or is it about top line growth is it about cost cutting it's about return on capital just if you could maybe frame for us really what you're looking for as you think about the group going forward. Thanks a lot.
Speaker Change: Thank you Akhil, maybe I will start.
Speaker Change: Sure.
Speaker Change: First because.
Speaker Change: My temptation to your question would be to sale of <unk>, but.
Speaker Change: Let me maybe train.
Speaker Change: For you a little bit.
Speaker Change: We are thinking about the future.
Speaker Change: As you said.
Speaker Change: There is a big transformation going on and Vodafone.
Speaker Change: <unk>.
Speaker Change: Shape, which is obviously very visible, but it's changing as deeply into it so patients will come to Germany in a minute, which tends to be obviously less.
Speaker Change: On slide 19 visible externally.
Speaker Change: If I start from the portfolio side, we are now effectively in the home stretch of completing their shipping of Europe.
Speaker Change: We are weeks away from the end of the approval processes in Italy, and the U K you will have seen that today, we are talking about completion in early 2025.
Speaker Change: So obviously, we look very much forward to FY 'twenty six.
Speaker Change: When the strategy will come into action in terms of operating in growth markets and in markets in which each and every one of them. We will have good local scale to deliver growth.
Speaker Change: And later.
Speaker Change: In terms of priority.
Speaker Change: I think the if you want most important aspect for me.
Yes.
Speaker Change: The definition of timing.
Speaker Change: We need to create.
Speaker Change: Good strong long term growth to drive returns.
Speaker Change: And obviously growth starts with the top line and our recently, but what drives return its growth into EBITDA and mostly cash flows at the end of the day and Thats deal that I've seen.
Speaker Change: Objective and again as it currently discussed at some point in the past.
Speaker Change: What we look at when we do our planning with our market.
Speaker Change: As always the evolution of return on capital over time.
Speaker Change: And this has been at the heart of the transformation. We have we have just execute them.
Speaker Change: In the process of completing.
Speaker Change: I am talking about the timelines because if you think about the moniker we follow in Vodafone now.
Speaker Change: Customer simplicity and grow <unk>.
Speaker Change: Because for me, it's fundamental to a healthy solid long term growth based on the back of the customers choosing us.
Speaker Change: And I think I need to make that answer shorter because otherwise.
Speaker Change: I could go on for hours, but.
Speaker Change: As you have seen we report in our customer Kpis together with our financial Kpis.
Speaker Change: Crowned achievers of leadership in NTIC now nine out of 15 markets. The UK, beating the record after record you've seen that your peer results swap.
Speaker Change: Improving customer satisfaction means because we are delivering our highest ever NPS in parallel with our lowest ever churn and a strong commercial momentum in the market and I think beyond the fluctuations quarter after quarter keep driving this fundamental of customer relationship.
Speaker Change: Whilst managing the group simply which is the simplicity is essential to create.
Speaker Change: Long term value.
Speaker Change: So that leaves me to Germany, then and your question on whats changing in Germany, and I'll give you a try to keep it like a quick snapshot of what's changing but in Germany as well as elsewhere and what we are driving a structural change.
Speaker Change: And within our operations I change, it's good to see the momentum that is building clearly, it's a transformation that will take time.
Speaker Change: But.
Speaker Change: You will have noticed that in the last 18 months, we have made some changes in a number of there and now you are asking commercially we have now.
Speaker Change: On boarded.
Speaker Change: New leadership team.
Speaker Change: Great.
Speaker Change: A new director for consumer a new director for business.
Speaker Change: These are all people, which and deep industry expertise. It takes time to either it people, but now we have the right team in place.
Speaker Change: The commercial areas.
Speaker Change: To order.
Speaker Change: Commercial examples that will underpin our our.
Speaker Change: Performance going forward.
Speaker Change: I mean, we are now putting to bed the MDU transition, which I need to say is there is a good thing for us of course, even if the financial impact will continue.
Speaker Change: But it wasn't.
Speaker Change: It's actually the easiest stuff, yes, we are ready to set up a massive sales machine to secure 4 million customer contract changes in the space of a few months. The team has done that successfully which is why today, we say nothing to see here. It is in line with our expectation.
Speaker Change: And this at the same time as we are simplifying the company with 20% reduction we are already midway through which is also I think significant change in that.
A country like Germany.
Speaker Change: And then finally.
Speaker Change: I think I explained it enough in my previous answer I think the our approach to fixed broadband is fundamental for our commercial performance and the changes in the last call.
Speaker Change: Cortez has been keeping up the hybridization, which is why the network. The cable network is well invested and being able to offer to all our customers wherever they are gigabit speeds is capable of that with fiber. So that we give them the best possible experience and don't get stuck into the DSL.
Speaker Change: Commercialization.
Speaker Change: Clearly.
Speaker Change: You will see more changes I would say this is a transformation that that takes time you will continue to see action.
Speaker Change: In in Germany, and we really look forward to move beyond this year of transition into FY 'twenty six.
Speaker Change: Sorry, a bit long winded, but.
Speaker Change: And then my other question that's very helpful. Thanks very much.
Speaker Change: The next question. This morning comes from the here at Citigroup CE line is now open.
Speaker Change: Hello, and thank you very much for taking my questions.
Speaker Change: I'm just I have a question on the U K I was wondering if you can talk about the competitive intensity that you're seeing in the U K, because I think especially in PCB youre still seeing that U K.
Speaker Change: <unk> service revenue is still in decline and also following up on that I understand that the first half of UK EBITDA right. Alright is helped by the cost by defense and energy <unk> I'm. Just wondering if you can help us to understand what will be the moving cap moving and.
Speaker Change: The factors that we should consider on the cost side and you can't when we think about the EBITDA trajectory second half. Thank you.
Speaker Change: Thank you I'll take the competitive and fashion than Andover beat that to Luca.
Speaker Change: The UK is a competitive market.
Speaker Change: That's very clear I think you see it.
Speaker Change: In our everyday numbers.
Speaker Change: Typically it's a market that steps up.
Speaker Change: With inflation on the front book and back book.
Speaker Change: The main operators, but there is continued competition triggered by the many brands that are now operating in the market.
Speaker Change: I wouldn't be particularly concerned about it to be your ASP to be rightfully. So it was flat in the quarter, but.
Speaker Change: This is an area, where we still have project phasing in play and you should rest assured that you will see the growth rate.
Speaker Change: Stepping up into positive in the second half and overall for the year.
B to be contributing to positive growth in our U K operations.
Speaker Change: More broadly I would say that it's a competitive market in which we compete very effectively I talked earlier about the benefits that we're seeing.
Speaker Change: Our engagement with our customers and a record level of customer satisfaction. This translates into a commercial momentum.
Speaker Change: We have.
Speaker Change: We are growing 50000 net adds in.
Speaker Change: In broadband in Italy in the quarter, one of the fastest growing operator in the market slightly he'd been because of some re class, but the same is true actually this quarter in consumer.
Speaker Change: In consumer mobile yeah. So so we compete effectively in our focus is really again talking about structural.
Speaker Change: Support for our long term growth is really about maintaining a strong brand and a stronger engagement with our customers and I think it's it's playing out pretty well, but Luca you can talk to Ebitdas, yeah, absolutely and just just to note as well as both of our primary competitors in the UK.
Speaker Change: I've already reported I think you can also easily compare our performance in the UK with us, which I think should give you a good framework reference of how competitive we are both in consumer but also it could be but on the EBITDA front. This was obviously a very good news story.
Speaker Change: Half year, one, but I have flagged actually already at our Q1 results that there was also some level of Opex phasing.
Part of that mix. So in the second half you should not assume that the U K.
Speaker Change: Operating at the same level of EBITDA growth, we should see a step down in that growth are due to two reasons first of all the positive energy impact in the.
Speaker Change: The first half year, which was contributing to 7% EBITDA growth.
Speaker Change: Enough here actually.
Is going to fade in the second half year as we were seeing already a reduction in cost loss in last year's age two and there is also going to be some degree of opex facing.
Speaker Change: Going into the second half year that was not around in the first half year, but still.
Speaker Change: UK will end the year at a very solid and good performance in EBITDA growth. So think about it in terms of mid single digit growth.
Speaker Change: It should be a safe, but for you to rely on.
Speaker Change: The next question. This morning comes from Robert Grindle, Deutsche <unk> Ms. Roberts. Please go ahead.
Robert Grindle: Good morning, and thank you. My question is on the Jv's, which is a big chunk of value on your balance sheet you.
Speaker Change: You mentioned in the pre comment that you are down to 50 50 in towers and Thats been a successful journey of monetization.
We reached the end of that road.
Speaker Change: You mentioned further sell downs or tariffs consolidation.
With your balance sheet improving.
Speaker Change: The necessity to co control towers dropped away and what's your thinking on the Dutch JV as there seems to be a proposal that thank you.
Speaker Change: Sure.
Uh huh.
Speaker Change: What shell actually sorry, you said something about the Dutch JV.
Speaker Change: To be a proposal.
Speaker Change: A proposal with Liberty global.
Speaker Change: To combine them.
Speaker Change: Unlike our retirement.
But by your mysterious.
Speaker Change: And we're going to work out yes. This is yes.
Speaker Change: Yes, I know.
Speaker Change: All discussion I was trying to understand where you're coming from.
Speaker Change: I would say no news on.
Speaker Change: On Vodafone Zynga.
Speaker Change: You have heard me say I think a number of times before.
Speaker Change: In the same vein that 50 50 JV is may not last forever, but at the same time I need to say we are.
Speaker Change: Very happy with.
Speaker Change: Being in a good market with strong assets very good partnership with lead that is so our focus now.
Speaker Change: Is to manage it for growth it's managed under Vodafone investments now we are just on boarded a new CEO that you have perhaps next so it's all about how do we accelerate our performance that we don't have any new plans on power.
Speaker Change: We are now actively at this 50 50 position.
Speaker Change: Position.
Speaker Change: And we have a lockup.
Speaker Change: Which was set up at the time off.
Combining the joint venture, which lasts until March 26.
And then over time beyond that I think we will always have to look at what's in the best interest of Vodafone also considering the evolution of our of the tower market in Europe. If I may just add there was nevertheless, one very visible opportunity for further value creation and that is increasing dividends over time, but.
Speaker Change: Hello from vantage towers.
Speaker Change: We have seen already in the first half year, a very nice step up in <unk>.
Speaker Change: Dividends, so I would expect that.
Speaker Change: For this year, we will probably see 100 million more in dividends from vantage tell us then.
Speaker Change: We have seen in <unk>.
Speaker Change: <unk> 24, and as this business continues to develop and a solid state I think that.
Speaker Change: Certainly not the end of the possibilities.
Speaker Change: Thank you.
Speaker Change: The next question comes from James <unk>, New St. James. Please go ahead.
Speaker Change: Yes. Good morning. Thank you very much so I would like to ask a question. Please on Germany, maybe no surprise that the Hitachi on the mobile market rather than fixed line and in particular, if I look at the pricing environment in Germany, we've seen some more aggressive moves.
Speaker Change: From Deutsche Telekom on some of that promotional offers we've seen more aggression from Telefonica and then just today <unk> was saying that they see the need to be more aggressive on some of that pricing in the fourth quarter because of increased level of competitive intensity in the German move.
Speaker Change: Bond market. So it seems like you don't want a few carriers at the moment, but it is actually holding firm on pricing in the market, but just love to get your views on how you're seeing.
Speaker Change: The competitive environment in German mobile some.
Speaker Change: Some of these price moves from your competitors something that worries you think you need to respond in Q.
Speaker Change: Thank you James.
If you go back to.
Speaker Change: Last may I.
Speaker Change: I did flag that we were seeing the market in Germany, becoming more competitive at the low end.
Speaker Change: The mobile spectrum.
Speaker Change: In those days, we were talking about competition on reseller, we were talking about second brands prepaid.
Part of the market.
Speaker Change: Now, it's fair to say that in the last month instead, we have seen.
Speaker Change: One operator, choosing to do a substantial more for less.
Speaker Change: I would say move across the spectrum of it so all in all the lineup.
Speaker Change: Including on the main brands. So obviously this.
Speaker Change: It means also the mid to high end side of the market.
Speaker Change: Now this is a is very recent.
I need to say I struggle to rationalize it.
Speaker Change: Myself this will be a question for other people but.
Speaker Change: From our side of the equation I would say that.
Speaker Change: We need to follow closely.
Evolution, we have seen the German market in the past as order sort of going up going down and it's very very early days in that respect, but it's something that you should expect us to to follow very closely.
Speaker Change: But you don't think that would lead to any deterioration at all in your German mobile service revenues in the second half.
Speaker Change: I think what you should.
Speaker Change: Expect us to do is as always remain disciplined you have currently.
Speaker Change: It's out now yourselves.
Speaker Change: In terms of broader impact on the market.
Speaker Change: It's a bit early to call it out and it will really depend on.
Speaker Change: The choices that will be made.
Speaker Change: Alright, thank you.
Thank you. The next question comes from David Wright at Bank of America Merrill Lynch. David. Please go ahead.
David Wright: Thank you for taking the.
David Wright: Question. So a question on Germany.
Speaker Change: Fixed and I did notice your release a couple of weeks back.
Speaker Change: When you stated you had the biggest fiber footprint in Germany.
Speaker Change: But there was a very curious German.
Speaker Change: Comment in Germany release.
Speaker Change: <unk>.
Speaker Change: Print without central Us overbuilt.
Speaker Change: And I did wonder Marguerite so I feel like if you're trying to introduce this strategy a little bit more on the call.
Speaker Change: Is the wholesale purely for the <unk>.
Speaker Change: <unk> way you don't have cable.
Speaker Change: Or could it be that you start to consider the likes of Deutsche <unk>.
The more sort of rural and suburban areas, where the overlap with you is now building with your Ftes.
Speaker Change: And where the cost to build is likely much higher.
Speaker Change: Could we start to see this vodafone fixed strategy in Germany, now start to evolve a little more and maybe a little bit more wholesale maybe some JV, maybe some own build.
Speaker Change: Do you feel like you're trying to introduce a bit of a narrative. So I'm keen to explore thank you.
David Wright: Thank you David.
Speaker Change: I would say, we always start from the customers.
Speaker Change: And we want to give our customers what's best for them.
Speaker Change: And with that in mind.
Speaker Change: We will.
Speaker Change: Ask our customers what do they need what type of service they will need any of the cable areas cable satisfies any customer needs. So it will be cable in the DSL area. As we are now in the position to actually offer them higher speeds and not keep them contained.
Speaker Change: To the ESL.
Speaker Change: Which is going to improve our service to them and that's on the back of that that I was calling out the fact that we will gain in.
Speaker Change: In three quarters of German <unk> of the customers that want to be converged with us we will have the opportunity to have 12 gigabit products.
Speaker Change: That's the starting point of what mostly matters.
Speaker Change: I was calling out the fact that in the DSL areas. The market is starting to see a beginning of a fiber churn. So we will clearly be there to allow our customers to choose fiber and they have the best the best possible service.
Speaker Change: So that's in terms of the commercial offers and what will impact our net debt in terms of then.
Speaker Change: Our machine and our will satisfy customer needs from an infrastructure perspective, our focus remains the same.
Speaker Change: The combination of continuing to fiber is the cable network as we as we discussed in the past.
Speaker Change: And in parallel driving.
Speaker Change: The build where it makes sense to us.
Speaker Change: Two <unk> and eight 7 million households program. So that's our focus today.
Speaker Change: The current the current plan is for $7 million in the joint venture right and Thats practices, maybe a little bit of Greenfield and not so what about the plan for the rest of the <unk>.
Speaker Change: Fiber.
Speaker Change: Cable footprint is there any ambitions today to fiber is that targets any capex Kevin.
Speaker Change: Yes, you are correct on the 7 million that is a $1 million, which is also greenfields and beyond that.
We'll be happy wholesaler.
Speaker Change: Range.
Speaker Change: Of providers.
Speaker Change: As we are doing now with Deutsche Telekom and <unk> of last thoughts.
Speaker Change: Over time this range could also change depending on where that are good business cases for us.
Speaker Change: Okay. Thank you very much thank you.
The next question comes from Javier Bernat Churro at Kepler Chevron.
Speaker Change: Please go ahead.
Speaker Change: Good morning, Margaret on Luka. My question is on on regulation, let's change gears a little bit.
Speaker Change: At the European level, we have now a new Commission Parliament.
Speaker Change: I would like to have your thoughts on what we could expect.
From in this regulatory period, particularly in light of the report.
Speaker Change: Hi, Mario dry here these future of European competitiveness, he made a lot of proposals.
Speaker Change: Single market higher monetization in country consolidation cross border consolidation cross border services networks.
Speaker Change: Level, playing field, so some might be more controversial other maybe more consensual. So maybe if we can have your thoughts related to these regulatory point.
Speaker Change: And I guess on U K, Italy, there's probably nothing new to report to you mentioned something in your press release.
Speaker Change: About the.
Speaker Change: Our expectation that these two this would be close soon but on Romania.
Speaker Change: Maybe a question on Romania.
Speaker Change: This agreement with TG, leading also potential to in country consolidation what do you expect in terms of regulatory review remedies.
Speaker Change: In Romania, Thank you very much.
Speaker Change: Thank you.
Speaker Change: I could go on on regulatory front, while first start from Romania.
Speaker Change: Romania is a good opportunity for us to go.
Speaker Change: Jane.
Speaker Change: Uh huh.
Good.
Speaker Change: Our return.
Speaker Change: By effectively driving synergies.
Speaker Change: That is one operator that needs to lead the market in mobile and we have just done an mou for a <unk> deal where we would.
Speaker Change: Bye.
Speaker Change: Deutsche Telekom mobile together with Digi.
Speaker Change: It's still an Mou at this stage so early days and you.
Speaker Change: It was the date into detailed due diligence in terms of the execution and now it's going to play out.
Speaker Change: Our expectation is actually subject to the final structure of the deal.
The review should be in Romania, because of the size. We are talking about and it's also the industry is quite immaterial I would say in the in the general context of the group on the regulatory front. We have worked a lot as you would expect in the last year and will continue to work and engage with European regulator.
Speaker Change: <unk> <unk>.
Speaker Change: Because Europe has been starved for investment investment in telcos for far too long.
Speaker Change: It was very good to see that some of the reports from <unk> and Mercer, which said.
Speaker Change: Important recommendations for the telco industry has been translated into the mission statement of the New Commissioner that's out now at work.
In Europe.
Speaker Change: So I think that's been.
Speaker Change: Good progress thoughts.
Speaker Change: I think we now need to see in the coming months. All these mission statements will actually translate into action and you should expect us to continue to be on the frontline of this engagement because as I said, it's really important that.
Speaker Change: Investment is recognized.
Speaker Change: As a force for good competition.
Speaker Change: Also within the group.
Speaker Change: As we are seeing at the moment in the UK.
Speaker Change: Thank you very much.
Speaker Change: Thank you.
Thank you. The next question comes from Polo Tang UBS Polo. Please go ahead.
Polo Tang: Hi, Thanks for taking the question I just had a question in terms of other Europe saw a solid performance in Q2.
Polo Tang: How should we think about impact of <unk> launched in Portugal, if I'm not mistaken I think that the fluids.
Polo Tang: For euro per month tariff for 50 gigs of mobile data. Thanks.
Speaker Change: Yes polo launch last week, I would say without surprises.
Speaker Change: Usual playbook.
Speaker Change: With aggressive pricing.
Speaker Change: The important point about Portugal that is that it.
Speaker Change: So very different from other markets, where we have seen DG operating in its wholesale market in which we have.
Speaker Change: Our position worth calling out from the market perspective.
Speaker Change: Sure.
Speaker Change: Mostly quad play.
Speaker Change: Is that a high percentage of contract.
Speaker Change: In the base and a.
Speaker Change: Very low churn, but perhaps more than most importantly.
Speaker Change: It's.
Speaker Change: An interesting market in the sense that the front book in Portugal is position higher than the back book.
Speaker Change: And then as far as we are concerned we have a very strong brand in Portugal, I was talking about customer satisfaction earlier, our customer satisfaction in Portugal is.
Speaker Change: Now to express this but let's call it miles ahead.
Speaker Change: Any any other player and I think you will have seen it.
Speaker Change: Sure that traveled in the country.
Speaker Change: And therefore, we have been very strong loyalty.
Now of course, there is competition ahead, we already have in the market and establish first Brian in Tech one brand and we look forward to compete.
Speaker Change: Thank you.
Speaker Change: We have time for one last question today, which comes from Andrew Lee at Goldman Sachs. Andrew. Please go ahead.
Andrew Lee: Okay. Good morning, everyone I'm, just going to bring us back to Germany, and just thinking about FY 'twenty six.
Speaker Change: You have stated you returned to growth, but clearly.
Speaker Change: And that statement also highlights at the 101 contribution.
Speaker Change: So when we're just trying to think about underlying.
Speaker Change: But you're you're you'll be delivering in Germany in FY 'twenty six.
Speaker Change: So with that one and one and if not why not.
Speaker Change: And I, just say I'll hand over to Luca.
It's early days to go into detailed guidance in FY 'twenty six in Germany. There are a number of factor, we will have to consider including the competitive environment, but Luca will go even one step further I would also not.
Speaker Change:
Speaker Change: Include or introduce yet another derivative of growth underlying an agreement that is a commercial agreement that.
Speaker Change: Based on our operational collaboration that has convinced the players in the market too.
Speaker Change: Work with us.
Speaker Change: <unk>.
Speaker Change: Because if we were to start that then would.
Speaker Change: We are also not calling out individual nbn or wholesale agreements in the in the different markets of EMEA. The performance of one on one unlike the situation of an external law change that we are suffering from at the moment with the MDU transition is one that is.
Speaker Change: An intrinsic part of our all of our auction performance in Germany. So I would not look at breaking out underlying underlying performance in that sense I couldnt agree more although I'm pretty sure that when we will end up doing the quarter on quarter movement.
Speaker Change: The next year that will be again, a lot of detail but.
Speaker Change: Not on the headlines and far too early I think it's another it's another way of looking at it is obviously to recognize that as we onboard the one on one contract there will of course be.
Speaker Change: A step up on the ramp.
Speaker Change: That's what we have been talking about already in the context of the second half year.
Speaker Change: And that is obviously a valid question to us so I'm very happy to.
Speaker Change: Discuss this as we move into the next year, but at some point, we need to recognize that business and operational agreement that we have won and that we will benefit from.
Speaker Change: I Wouldnt really kind of separate that from from the rest of our performance.
Speaker Change: Thank you.
Andrew Lee: Thank you Andrew.
Speaker Change: That was the last question and I would now like to hand back to Margarita for any closing remarks.
Margarita: Just thank you very much for being with US today and look forward to the meetings in the road show and beyond Thank you.
Margarita: Thank you very much.
Margarita: [music].
Margarita: Yeah.
Margarita: [music].
Margarita: Yes.
Margarita: [music].
Margarita: Yeah.
Margarita: [music].
Margarita: Yes.
Margarita: [music].
Margarita: Yeah.
Margarita: [music].