Barclays: in-market consolidation could strengthen profits, investment in EU telcos

IONOS SE

Yesterday 09:08

25 Jun 2026 - ** Barclays says a potential in-market consolidation remains an upside for European telecommunication companies
** "The solution to address the sector's low profitability in our view is in-market consolidation," the broker says, adding that it would create stronger and more profitable companies, protect the ability to invest in future technologies and address the political will for a more sovereign Europe
** It sees Germany as a potential next candidate for in-market consolidation after France but adds that the CEO of United Internet UTDI.DE and its unit 1&1 1U1.DE recently indicated that no discussions were ongoing
** However, Barclays upgrades both companies to "overweight" from "equal weight" as 1&1 fundamentals improve
** The brokerage expects stabilising customer trends at 1&1 and "peaking capital spending" to drive operating free cash flow growth at the telecommunications provider
** It says beyond 1&1, United Internet benefits from additional earnings support through another unit IONOS IOSn.DE, which continues to deliver solid operational performance
** The broker raises its PT on 1&1 by 17% to EUR 24 on service recovery and lifts United Internet by nearly 4% to EUR 28 citing solid web hosting unit IONOS results



 (Reporting by Kira Britten)
 ((Kira.britten@thomsonreuters.com))