We hosted Sebastian Jung, Head of Digital Transformation at one of Germany''s largest Housing Associations, to discuss impact of changes to the Nebenkostenprivileg regulation and the future of FTTH in Germany. Below we summarise key takeaways, with more detailed QandA notes inside. TV law change presents significant downside risk to telco operators, particularly VOD (-) Currently 12m German households automatically pay for basic TV via rent, paid to their Housing Associations (HA). This has been a highly profitable relationship, but changing regulations will ban this from July 2024. Telco operators will need to sign contracts directly with the consumer; Vodafone estimates EUR800m of revenue exposure, and BNPPE assumes a 14% hit to FCF. A complex and fragmented picture, but relationship between operators and HAs is key Mr. Jung sees the long-standing relationship between telcos and the HAs as an advantage when trying to retain TV customers. For example the ''vast majority'' of customers have maintained a telco relationship in some recent partnerships vs the 35-65% retention rate previously cited by VOD. But this typically results in lower pricing (for the customer) and more marketing costs. It also opens the market up to more competition, likely meaning that DT/Freenet/others will win share over time. FTTH is the next battleground - Vodafone has the connections, but DT has the money FTTH coverage is limited in HA areas at present (10%), and we are seeing a ''race'' between operators looking to work with the HAs. This can be done either by entering a revenue share deal or by doing a ''sale and leaseback'' (telcos build the fibre and then sell to the HAs). Mr. Jung notes a strong preference for the ''sale and leaseback'' model. DT is particularly active on promoting FTTH at present, Vodafone less so. But VOD does have a ''head start'' in terms of relationships and is more flexible in negotiations. Our view is that that in order to retain current share, VOD...