Report Overview


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H3G FY 2011 results: UK strengthens more, Italy weakens further


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H3G’s European operations slightly improved underlying service revenue growth, and EBIT margin improved from 0% to 3%, but the latter figure was flattered by a change in handset subsidy accounting; without this change, EBIT would likely have been negative.
The UK and Italian performances further diverged, with UK growth accelerating in H2 to +13%, and Italy decelerating to -14%, despite a renewed (and expensive) push for contract subscribers in Italy.
The UK business has positioned itself well for the smartphone revolution, with its all-you-can-eat data plans particularly popular, although the resulting traffic surge may cause service quality problems in the future.