Morgan Stanley : After a tough start to the year, the sector has had a good summer and is now +9%YTD. That said, after +2%Y growth in Q1, mobile service revenues have slowed in Q2 to 0%Y.
This slowdown was mainly driven by the trend in the UK where the deceleration was more pronounced, with revenues declining from 5% in Q1 to 1% in Q2.
In Germany, growth also decelerated slightly, while in France it was broadly flat. Finally, in Spain, MSR’s expectations have also remained broadly stable, with Terence Tsui pointing to a market recovery following the completion of the JV between Orange and Masmovil.
In this context, the analyst gives preference to DT, Swisscom, BT and Orange (OWs). In Spain, he maintains his EW recommendation on Telefónica.
