Which telecom stocks can you look at amid the cost-of-living crisis?

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Which telecom stocks can you look at amid the cost-of-living crisis?

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 Which telecom stocks can you look at amid the cost-of-living crisis?
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Highlights:

  • Britain households face an acute crisis of paying their bills for communication services due to soaring inflation.
  • One in seven is cutting down on food and clothing to pay the telecom bills.

The cost-of-living crisis has been piling pressure on UK households, forcing them to cut back on their spending. Especially those in the lower income group are cutting down wherever they can as the wages haven't grown in line with inflation. Along with food and energy bills, Brits also face trouble affording communication services.

According to the UK's communication regulator Ofcom, as many as 8 million people are struggling to pay their mobile, broadband, streaming, and pay TV bills. In its annual affordability survey, Ofcom concluded that approximately one in seven households are compromising on their daily expenses to afford their communication services. On the other hand, 9% have cancelled service.

Telecom bills rising UK

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Over the past 12 months, the number of families struggling with telecom bills has nearly doubled, reaching 29% from 15%. 

Notably, many telecom service providers hike their prices using a preset formula. The bills are increased by the inflation levels in January measured through CPI, and an additional 3.9% is added. Ofcom has called on providers to scrap this formula amid projections that the cost-of-living crisis will likely worsen in the coming months. It also updated how telecom firms should support their customers struggling to pay bills.

Let us explore some telecom stocks listed on the London Stock Exchange.

Vodafone Group Plc (LON: VOD)

The leading British telecommunication firm provides multiple mobile and broadband services. Recently, French telecoms billionaire Xavier Niel acquired a 2.5% stake in the company. In the past year, the FTSE 100-listed firm's shares have plunged by more than 10%, and the year-to-date return currently stands at -8.61%. VOD has a market cap of £29,121.00 million and a positive EPS of 0.07. Its shares traded at GBX 102.54, down 2.45%, as of 9:31 am GMT+1 on 29 September.

BT Group Plc (LON: BT. A)

The UK's biggest mobile and broadband services provider, BT Group, is listed on the FTSE 100 index and holds a market cap of £12,654.70 million. The firm's workers have planned strikes in the long-running dispute over pay. The stock price has depreciated more than 23% in the past year and by 27.13% on a year-to-date basis. The EPS currently stands at 0.13. Shares of the company were trading 2.83% lower at GBX 123.85 as of 10:05 am GMT+1 on Thursday. 

Gamma Communications PLC (LON: GAMA)

Gamma Communications Plc is listed on the FTSE AIM UK 50 Index and holds a market cap of £1,065.37 million. In the past 12 months, its share value has depreciated by nearly 39%, and it has plunged by a third on a year-to-date basis. The EPS stands in positive territory at 0.68.

Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.

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