...Stronger Margins: The application of IFRS 15 `Revenue from Contracts with Customers' accounting standard has resulted in stronger margins for many EMEA telecoms operators. The impact was as high as a 7pp increase in EBITDA margin in 1Q18 for one issuer, but was less significant, ranging from a negligible 0.1pp to a moderate 1.7pp margin improvement, for four of six companies included in our initial review. Revenue Impact Modest: The impact on revenue is likely to be modest but may be both positive and negative. For mobile operators, IFRS 15 typically leads to earlier recognition of handset revenue for sales through both direct and indirect (via agents) channels. However, in some cases agent commissions and reimbursements are no longer treated as expenses but as a reduction of service revenue resulting in lower reported headline revenue. For the limited sample of telecoms issuers under review, the impact on revenue ranged from -0.6% to 0.2%. Non-Cash Element Increases: Where revenue includes...
