Q3 FY26 Q&A Transcript

Vodafone Group Plc

Deutsche Numis

Morgan Stanley

New Street Research

Goldman Sachs

BNP Paribas Exane

Bank of America Merrill Lynch

Barclays

JP Morgan

UBS

Berenberg

Citigroup

The general principle is maximum access to our customers to the gigabit footprint. You see it in Germany. Three out of four of German households have it through us. You now also see it in Türkiye. It is our general approach to the market. The question I wanted to ask today is really about FWA, please. Firstly, in the UK, just to understand some of your near-term delivery and longer-term aspirations. It looks like in the quarter, your FWA adds fell to 11,000 from 21,000 the prior quarter. What has driven that? Do you see the scope for that to reaccelerate in the next few quarters and thoughts longer term? Also in Germany, do you see an opportunity to deploy more FWA in the rural areas there? Thank you, James. Starting with the UK. The short answer is yes, we expect FWA to continue to grow. Two things happened in Q3. It is a combination actually of seasonality. The quarter with December in it is never a strong quarter for FWA, and also price competition around the Black Friday week, particularly around the lower end of the market in terms of speeds. Both factors affected 11,000 versus a higher number before. But equally, it will continue to grow. Now this being said, just as I may have done already last time when we had this discussion, certainly, we need to contextualise what we see in terms of FWA opportunity, which is, for us, essentially the most important point is using FWA for our customers on the way to fibre as we can be there now and then when fibre gets there, connect them seamlessly. But the key big numbers are always going to come from the fibre side of fixed broadband, but more growth ahead for sure and an opportunity for us in the UK for sure. Is it an opportunity also in Germany? This is a really good question. We have had actually an FWA product on the market in Germany for many years. It is there. Yes, you might remember, GigaCube. I would say it is a less lively market than the UK is. Two reasons probably that I can think of. On one hand, the depth also historically of our gigabit penetration with our cable network, I was saying just earlier to Polo that we cover with the full footprint, including the five million of fibre wholesale, three out of four of German households. So Germany, from that perspective, was their first. Then maybe customer behaviours are also impacting. This also depends on trade-offs that they make between different products. But it is a good question still, and it makes sense to just reflect. All markets will have a degree of FWA, then it depends on the level of coverage, mostly how far developed it goes.

James Ratzer New Street Research Margherita Della Valle Vodafone

Why do you see that as a migration to fibre? Because don’t you make a higher gross margin on FWA than wholesale fibre?

It is, because ultimately there will always be layers of services with different level of efficiency and effectiveness. Therefore, it is quite likely that for the majority of people, that fibre arrives into your city or your village and there is a natural step towards that. There will always be areas that either will have fibre very late or never, and therefore, that will remain permanent. But I do not think it is logical to think of it as a permanent feature. Again, we could discuss for long. There is also a type of customers, students, people who move a lot, may find it very convenient, obviously. But if you are in a residential area, in the end, that is the frame we are looking at it with.