European telecoms under pressure following Wind3’s disappointing results
Analysts confirm the “need for a consolidation deal with Iliad, the only industrial partner still available”
(Il Sole 24 Ore Radiocor) - Telecoms shares in Europe are under pressure (the Euro Stoxx 600 sector index is down 0.1%), with analysts highlighting the need for market consolidation following Wind3’s disappointing first-half results.
To begin with, CK Hutchison (the parent company of Wind3, which closed down 3.04 per cent on the Hong Kong Stock Exchange) stated that its businesses had recorded a mixed but generally solid first half of the year, with gains in retail, ports, infrastructure and investments offsetting pressures in telecoms and the loss of port operations in Panama. In particular, therefore, telecoms remained the most problematic division. In Europe, in fact, competition in Austria and the loss of wholesale revenue from Wind3 weighed on results, despite the company pushing ahead with cost-cutting measures and productivity tools based on artificial intelligence.
Thus, in light of Wind3’s ‘disappointing’ results, Intermonte analysts confirm the “need for a consolidation deal with Iliad, the only industrial partner still available, in a context where Italia is the only one of CK Hutchison’s European markets still contracting”.
More specifically, Wind3’s revenue in the first six months of 2026 fell by 4 per cent year-on-year, and the gross margin dropped by 5 per cent compared with the same period the previous year, impacted by the loss of a number of wholesale contracts, which was only partially offset by a slight improvement in the net margin on customer services. Consequently, EBITDA and EBIT fell by 11% and 73% year-on-year respectively at constant exchange rates. Cost control and lower depreciation and amortisation only partially offset the decline in the gross margin. The EBITDA margin stood at 33%, down 3 percentage points year-on-year, whilst operating free cash flow (€340 million, -8% year-on-year) showed greater resilience, standing at 18.5% of revenue (-0.8 percentage points year-on-year) thanks to a reduction in capital expenditure (13.1% of revenue, -1.6 percentage points year-on-year).
According to the company’s outlook, the telecoms sector is expected to remain under pressure, but the group has stated that it is focusing on cost reduction, customer retention and productivity gains driven by artificial intelligence.
