1&1 has lowered its 2025 EBITDA guidance by €26 million due to higher-than-expected national roaming costs, driven by increased data traffic on Vodafone’s network under an unchanged pricing model
- 1&1 lowers its EBITDA forecast for 2025 to €545 million from €571 million due to higher than planned wholesale national roaming costs with Vodafone.
- 1&1 said it now believes its projection of the data growth on the Vodafone network in 2025 were too optimistic and that the additional costs will only be partially offset by savings in other areas.
- The pricing model with Vodafone remains unchanged; 1&1 pays a fixed fee for each percentage point of its customers’ total data traffic that uses Vodafone’s network.
- It reiterated its guidance for 1&1 Mobile Network EBITDA of approximately -€265 million (2024: -€265.3 million), service revenue at the previous year’s level (€3,303.1 million) and cash capex of around €450 million.
- United Internet shares are little changed while 1&1 shares are down 1% following the report.
Assessment
I wonder if the increase in national roaming costs is partly due to delays in 1&1’s network expansion or the recent network outages. It’s possible that 1&1 is now shifting more traffic than initially planned to Vodafone’s network in order to ensure better coverage. The deal with Vodafone was signed in August 2023, at a time when 1&1 was expecting to have more active sites than it currently does (3,000 at the end of 2024 versus 2,309 currently).