Vodafone Germany has reported a modest increase in service revenue, a recovery largely attributed to its recent network-sharing arrangement with competing telecommunications provider 1&1. After a period marked by significant revenue declines, Vodafone's German operations are showing signs of stabilization, despite ongoing challenges in the competitive telecoms market.

According to company statements, Vodafone's service revenue for the third quarter of the 2025/26 fiscal year rose by 0.7 percent, reaching approximately 2.7 billion euros. This uptick follows a similar, albeit slightly lower, growth in the previous quarter, marking a positive change after six consecutive quarters of revenue contraction, which at times reached up to 6.4 percent.

Background: Impact of Regulatory Changes

The recent financial volatility for Vodafone Germany primarily stemmed from regulatory changes affecting its television services. Previously, many tenants were required to pay for Vodafone TV connections through their housing costs, regardless of whether they used the service. The abolition of this policy in 2024 led to a substantial customer exodus, with Vodafone losing around four million TV subscribers over recent years.

Although this decline was halted earlier in 2025, with the company managing to increase its TV subscriber base by 90,000 in the first half of the 2025/26 fiscal year, the segment remains difficult. In the latest quarter, Vodafone reported a net loss of 6,000 TV customers, bringing its total to about 8.8 million. The company attributed this to a reduction in promotional offers and discounted rates during the period.

Network Partnership Boosts Financial Results

A significant factor in Vodafone's revenue improvement has been the onboarding of 1&1 as a network tenant. As 1&1 continues to build its own mobile infrastructure, it relies on Vodafone's network to provide coverage for its customers in areas where its own network is not yet available. This arrangement generates steady rental income for Vodafone.

The collaboration intensified at the end of the previous year, when approximately 12 million 1&1 customers were migrated from a competing provider's network to Vodafone's infrastructure. This move has provided a notable boost to Vodafone's mobile service revenue.

Mixed Performance Across Business Segments

The company's financial reports revealed varied outcomes across different sectors. Vodafone's mobile service segment saw a 2.8 percent increase in revenue, totaling about 1.3 billion euros, while its fixed-line business experienced a 1.1 percent decline, falling to 1.4 billion euros. The number of mobile customers continued to grow slightly, whereas the fixed-line customer base diminished.

Vodafone Germany's leadership characterized the market environment as challenging, but noted optimism regarding ongoing, moderate growth, primarily driven by the new income streams from wholesale network usage agreements.

Industry Outlook

The German telecommunications landscape remains highly competitive, with regulatory changes prompting providers to adapt their business strategies. Network cooperation agreements, such as the one between Vodafone and 1&1, are becoming increasingly important as operators seek to offset losses from traditional service lines and capitalize on new income opportunities.

As Vodafone continues to navigate the evolving market, the company's focus on strategic partnerships and adapting to regulatory shifts is expected to play a critical role in its future performance.