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Vodafone Group Plc H1 FY27 Q&A Transcript
Goldman Sachs
BNP Paribas Exane
Bank of America Merrill Lynch
New Street Research
Deutsche Numis
Morgan Stanley
JP Morgan
Citigroup
UBS
Thank you.
Andrew Lee Goldman Sachs Joshua Mills BNP Paribas Exane
Hi, guys. Thanks for the questions. I'm going to dig into Germany a bit more detail.
So firstly, on the service revenue trends, you talked about strong B2B growth. Could you just give us an update on what percentage of German service revenue is coming from B2B at the moment? And then within the mix, it looks like the digital services business has been a big driver of that. So perhaps you could give maybe a bit of flavour on whether it's much better digital service revenue growth that's driving this, whether the connectivity side of things has really changed as well. That would be the first question. And then secondly, on competition, results last week in DT were commenting a bit on mobile competition, and we've seen the launch of the new Simsalasim MVNO and also the general mobile market. So, are you seeing any change on mobile competition going forwards? Thanks very much. Maybe in a nutshell, I start from the second part, which is - not really. I would say we have seen a few moves in this quarter, some up, some down, net-net. I think nothing is materially changing in the pricing environment in Germany. And all the MVNOs you're talking about, MVNOs are not new in any of our markets. And so, I would say, generally speaking, very much more of the same. On B2B, turning around B2B was one of our key priorities in Germany. And as I was mentioning earlier, you see now the consistent growth. So maybe I can give you a bit more data points behind this. In terms of sizing, roughly roughly, IR can help with the precision, but imagine roughly 25% of the revenues in Germany from B2B and 25% a little bit more of the B2B revenues coming from digital services. Now, this last percentage is moving very fast. So, we need to update it. But our strategy in Germany has really been to focus on gaining share on the new growth areas: Cloud, AI, Security. And we're also improving our connectivity, by the way, to your point, The first is, we have, you might remember me saying it for across the Group, we have spent quite a bit of time and investment in expanding our portfolio in digital services. And so, if I take the things that maybe are more relevant to Germany in the near term, just to give you a sense, we have launched an AI concierge service to support SME driving their productivities. We are seeing great success from our German cyber security operation centre to serve our B2B customers. And then we have launched a sovereign AI proposition also in the last six months. Now, this is, I would say, the organic side, but second driver, we have also been investing inorganically. You might remember we have acquired, maybe it's a year ago now, Skaylink, a company that is helping customers, particularly in the Mittelstand in Germany, moving to the Cloud. And again, if I look at, I don't know, the last two quarters, we've already signed over a hundred contracts with Vodafone customers. So significant synergies, we bring together all our range of services. but all the growth, the real growth is coming from digital services. Three things have made the difference to us in the last year.
Margherita Della Valle Vodafone Group
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