We expect stable telecom ratings with modest revenue, margin gains, and lower capital expenditure to generate stronger cash flow. The first quarter of 2024 saw a generally positive earnings and outlook for European telecoms operators, reporting a 1%-2% uptick in revenue on average. Our macroeconomic forecast is for a soft landing. Falling inflation will benefit margins but erode the tailwind to revenue growth. Approvals on mergers and acquisitions in Spain and Italy, lighter touch wholesale regulation, and spectrum extensions have been positive. Competitive pressures could further moderate, pending additional alternative network rationalization and the regulatory review outcome of the Vodafone/Three transaction in the U.K., though we remain cautious on additional regulatory permissiveness.