Elisa signs first large-scale data center connectivity deals, but cuts telecom revenue outlook on mobile lag
Elisa's Q2 2026 report contained two diverging stories: a bold new strategic push into data center connectivity and a painful, self-inflicted delay in mobile service revenue recovery. Revenue was flat year-on-year at €551 million, but comparable EBITDA rose 1.4% to €201 million, and the EBITDA margin improved to 36.5% thanks to cost discipline. Yet the more consequential news was the company's decision to cut its telecom service revenue growth guidance to 0%-2% for the full year, from the 1%-3% band it had maintained in April.
This quarter marks the start of our large-scale data center connectivity business. During the quarter, we signed first large-scale data center connectivity deals.
Data center connectivity moves from talk to contracts
The key development is connectivity business in the data center space. For quarters, Elisa has told investors about the potential of data centers in Finland — citing low electricity prices, a stable grid, and its own extensive backbone network. But this quarter, the company actually signed its first large-scale data center connectivity deals, with construction periods ranging from a few months up to 24 months, and contract durations up to 15 years. The CapEx for these projects will be managed outside the 12% CapEx-to-sales envelope, and management stressed that the cash flow profile is attractive. CEO Topi Manner framed the opportunity as one that will deliver "notable positive EPS impact to Elisa over time." The data center theme has now risen to the very top of Elisa's own keyword trajectory, a clear signal that this is no longer a vague future ambition but a concrete growth pillar.
This is not a company-specific narrative only. In the immediate reporting window, several Nordic telecom and tech names — Ericsson, Smartoptics, and HMS Networks — all highlighted data center demand, and AFRY mentioned data center exposure. That suggests Elisa is riding a regional wave, but its particular role as the incumbent fiber backbone owner gives it a structural advantage in the fixed service connectivity niche. The company also continued to expand in fiber, including a bolt-on acquisition in Lapland and a significant Fiber-to-the-Building win with Lumo Plc, demonstrating that the broader fiber momentum supports the data center story.
The mobile revenue lag that won't quit
The other side of the story is a downgrade in mobile service revenue expectations. Elisa had been hoping that the normalization of market indicators — new sales prices, churn, and marketing spend — would translate into a mobile service revenue recovery in the second half. Instead, the company discovered that the share of fixed-term contracts, both in its own base and across competitors, has increased much more than anticipated, lengthening the transmission lag between price increases and revenue. CFO Kristian Pullola admitted, “There has been a bigger lag impact from the competitive environment than what we anticipated and modeled at the beginning of the year” — Kristian Pullola, CFO · 2026-07-15. This was the main driver behind the guidance cut.
The mechanics were already flagged in Q1, when CEO Topi Manner explained, “you will need to factor in a time delay of some months, approximately a quarter” — Topi Manner, CEO · 2026-04-21. But the company now sees the impact persisting through the year because renewals of the one-year contracts signed during last autumn's aggressive competition will not translate into higher revenue until Q4. As Pullola noted, “When it comes to renewing the one-year contracts that were entered into last year, there will not be a similar lag there as there was when we had transfers to us” — Kristian Pullola, CFO · 2026-07-15. Elisa went so far as to guide that Q4 EBITDA will exceed Q3 EBITDA this year, a rare deviation from historical seasonality, because of the back-end-loaded revenue recovery.
The mobile indicators have indeed normalized — churn fell to 16.7%, in line with the 10-year average — and new sales prices are above Q2 2025 levels. However, the share of fixed term contracts across the Finnish market has created a longer lag than previously modeled. The company expects the improvement to become visible in Q4, but the near-term revenue outlook remains muted.
Software hiccup and cost discipline
Elisa's international software business (Elisa Industriq) also disappointed, with comparable organic revenue growth of just 0.6% as license deals were postponed amid geopolitical uncertainty. The company emphasized that no deals were lost and that order intake remains positive, but the weakness is a reminder of the inherent volatility in the software business. Elisa is now deploying specific measures to boost profitability in that segment, following the appointment of a new CEO in the spring.
Offsetting the revenue headwinds, the EUR 40 million transformation program continues to deliver. Cost savings have supported EBITDA growth despite the flat top line, and the company has maintained a strong balance sheet with net debt to EBITDA at 1.8x, well within its target range. For now, the market is likely to focus on two things: whether the data center connectivity deals materialize into meaningful revenue and cash flow, and whether the mobile service revenue recovery finally lands in Q4 as guided.