News: Vodafone reported financials for 3Q13 yesterday (financial YE is in March, so their 3Q13 coincides with calendar 4Q12 - we use a calendar timeline below so that the numbers are comparable to those of Turkcell and Avea). The segment EBITDA margin is reported on a half-yearly basis, and so the EBITDA margin was not reported in these results.
Our View: We think that Vodafone Turkey's results are a positive read-across for Turkcell. Like Avea, Vodafone showed an acceleration of growth in 4Q12 in lira terms: mobile service revenue growth accelerated to 15.5% YoY vs. 11.5% YoY in 9M12. Voice revenue growth was one driver (+12% YoY in 4Q12 vs. +11% YoY in 9M12), as the market seems to be stable in terms of pricing. Another was mobile data growth, which was supported by rising smartphone penetration: up 1.4pp for the quarter to 18.9%, compared with the total 0.4pp increase in penetration over the last two quarters. Customers continued to migrate to postpaid product: postpaid as a share of the total subscriber base has reached 35%, vs. 30% at end-calendar 2011 - a trend we will likely see in Turkcell numbers as well.
In Italy, Vodafone's mobile service revenue was down 14% YoY in 4Q12, same as in 3Q12, impacted by the mid-year MTR cut. Vodafone claims the strong price competition in Italy continued. We think the situation has not changed much compared to 3Q12, so this is a largely neutral read-across for VIP: Wind Italy has likely continued to gain market share, but the market is challenging.
Source: bne