Vodafone Group PLC (LSE:VOD) should avoid several hundred million euros of extra spending after the proposed postponement of a German mobile spectrum auction, according to analysts.
Germany's utility regulator, Bundesnetzagentur (BNetzA), has proposed extending the 800MHz spectrum to existing mobile network operators rather than hosting an auction.
"We see the news as a notable positive for most players in the market in terms of avoiding a potentially expensive spectrum auction," said UBS in a note to clients on Thursday.
Analysts at the bank had assumed €800 million of spectrum costs in 2024 for each of Deutsche Telekom (0.8% of its market cap), Vodafone (3.3% of its value) and Telefonica Deutschland (15.2%) but said "costs could have been double that in the event of an expensive auction".
The 800MHz spectrum was due to expire in 2025, but the BNetzA is proposing an extension to 2030.
"While there may be annual levy for this, the costs are likely to be modest (tens of millions of euros) relative to significant one-off spectrum cost," the UBS note said.
The BNetzA is conducting a consultation on its proposals running to 6 November and UBS said it would expect a final decision by early 2024.
For Vodafone, where the bank has a 'buy' rating based on a 100p target price, UBS noted that declines in Germany "appear to be easing".