Berenberg sees Vodafone upside from cash flow gains, German consolidation

EU governments propose flexible phase-out timeline for high-risk telecom suppliers, removing a 36-month deadline. The move follows industry concerns, including a €40B cost estimate from Deutsche Telekom and peers, for replacing equipment from suppliers like Huawei. The revised Cybersecurity Act requires further negotiation. Germany, Italy, and Spain face the highest replacement costs, with Deutsche Telekom and Vodafone heavily reliant on Huawei equipment.

DigitalBridge, Legal & General, and TD Asset Management have acquired Vodafoneziggo Towers, a joint venture between Vodafone and Ziggo. The deal values the towers at €1.4 billion, with Vodafone retaining a 20% stake. The acquisition aims to expand the companies' infrastructure portfolios.

Ericsson and VodafoneThree launched an upgraded 5G Core network, powered by Ericsson's dual-mode 5G Core, for VodafoneThree's 28.6 million customers. The network offers faster speeds, guaranteed minimum download speeds, and dedicated network slices for consumers and businesses. The project is part of an SEK 12.5 billion partnership and aims to support growing data demands with a capacity of 9 Tbps.

The US International Development Finance Corporation (DFC) approved $8B in investments, including $185M for DTEK to modernize Ukraine's energy infrastructure and $350M for Vodafone Ukraine to upgrade telecom infrastructure. Vodafone Group Plc, the parent company, is listed on NASDAQ (VOD). DTEK's 200MW battery system is operational in Ukraine. Vodafone Ukraine reported H1 2026 revenue of Hr. 14.95B ($334.4M) and net profit of Hr. 1.95B ($43.6M).

Kenya's High Court ruled the sale of a 15% stake in Safaricom to Vodacom was flawed, ordering its return to the government. Vodacom plans to appeal. The $1.6bn deal, completed in June, increased Vodacom's stake to 55% and reduced the government's to 20%. Safaricom is reviewing the judgment. According to NTV Kenya, the court cited lack of public involvement and concealed information.

Vodacom's shares fell 1.7% after Kenya's high court blocked its $2.1bn takeover of Safaricom, citing lack of public consultation and arbitrary valuation. Vodacom plans to appeal the ruling, which nullified the deal to acquire a 15% stake from the Kenyan government and a 5% stake from Vodafone.