NZ 5G update\ Webscale Playbook: Facebook\ NBN Half Year Results\ Sky UK FY19 results

 



 




In this week’s edition, we look at 5G update in New Zealand, the performance of Facebook, NBN half year results, and Sky UK FY19 results.

CHART OF THE WEEK

 NZ Survey – Fixed Broadband Respondents Considering Shift to Wireless Broadband



Source: VENTURE INSIGHTS NZ CONSUMER MOBILE SURVEY, N=1,007

New Zealand 5G update: Still waiting on spectrum auctions with 2Degrees yet to enter

NZ Survey – Consumer Willingness to Move to 5G



Source: VENTURE INSIGHTS NZ CONSUMER MOBILE SURVEY, N=1,007

2019 saw 5G services launched by Spark and Vodafone. Vodafone switched on 5G services in four cities in December 2019, and Spark launched 5G wireless broadband services in five towns in South Island in November 2019. Whilst Venture’s 5G NZ consumer surveys clearly showed a willingness to move to 5G, actual uptake will still be constrained in 2020 due to coverage limitations and Apple’s delay in launching a 5G iPhone. The 3.5GHz radio spectrum allocation and increase in 5G footprint and services are the key trends to watch for in 2020 in NZ. Click through to read our report for more details on the progress made by NZ telcos in rolling out 5G services in 2019 and how the competition may shape up in 2020.

Click to read report

Webscale Playbook: Facebook



Source: COMPANY QUARTERLY REPORTS; MTN CONSULTING ANALYSIS

Facebook has grown through leaps and bounds since its inception 15 years ago, to currently become the world’s most popular social networking company with 2.3B monthly active users. When Facebook launched in February 2004, several other social networks such as Friendster (2002), MySpace (2003), and Orkut (Jan 2004) were already in the fray, triggering notions that Facebook would meet a similar fate as its peers – some of which are now defunct or are dying a slow death. Further uncertainties creeped in with its IPO going bust in 2012, reflecting doubts over its long-term worth. Fast-forward to 2019 and Facebook now has a market capitalization of over US$540B+, US$58.7B in annualized revenues at the end of 1Q19, and has become a force in advertising to reckon with, just after Google in the US. For a more detailed look at the performance of Facebook, click through to read a report from our US research partner, MTN consulting.

Click to read report

NBN Half Year Results



Source: NBN Co Half Year Report FY20

NBN has announced half year build results of 10.5 million premises ready to connect and 6.4 million activated. NBN states that the company remains on track for their ‘volume build’ milestone of 30 June 2020.  However, it is not clear how many ‘complex connection’ premises will remain at that time and how long that process to connect will take – as we have previously highlighted, these premises present an opportunity for wireless bypass.  Residential ARPU has increased by $2 to $45 – however this still falls short of the plan targets and with the current ACCC pricing inquiry it is not clear how this will affect ARPU over time. Business revenue has increased from $214 million to $319 million in the corresponding period and although NBN is currently reviewing options for dark fibre lease, Venture still believe NBNs plans for business broadband will fundamentally change the RSP market for large and enterprise customers. The cost per premises across each access technology is relatively stable for fttx products with an increase in HFC cost due to capacity upgrades and an increase in fixed wireless due to reduction of premises. 

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Sky UK FY19 results

Sky annual net subscriber additions (000)



Source: ENDERS ANALYSIS, COMPANY ACCOUNTS

Despite operating in a challenging market, Sky has continued to increase revenues, with the resilient performance of its direct-to-consumer and content businesses offsetting the disappointing drop in advertising income. Across FY 2019, EBITDA was up 12.2%; profit growth driven by a significant reduction in “other” costs as large one-off effects disappear and cost-cutting continues. Extended distribution deals with Netflix and WarnerMedia will protect Sky’s content proposition for the coming future, as would the mooted integration of Disney+. For a more detailed look at the analysis of the performance of Sky’s UK channels, click through to read a report from our UK research partner, Enders Analysis.

Click to read report