vodafone

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  • April 2, 2019

    UK broadband, telephony and pay TV trends Q4 2018

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    Market revenue growth accelerated to 3% in Q4, but it might never reach this level again, being helped by a never-to-be-repeated BT overlapping price rise. With price rises becoming more challenging in general, and superfast pricing under pressure in particular, maintaining/increasing ARPUs is becoming more difficult despite superfast volumes surging. Openreach’s ultrafast roll-out has accelerated, challenging Virgin Media and bringing the prospect of further price premia, but perhaps too late to be of significant benefit in 2019.
  • March 28, 2019

    UK mobile market Q4 2018: Headwinds gathering for 2019

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    Following record growth last quarter, the UK mobile market took a step down to just 0.9% growth in the quarter to December on the back of increasing pressure in the business market and the impact of out-of-bundle limits. 2019 looks set to be a tough year for the sector with: a series of potentially painful regulatory hits; markedly lower price rises than last year; and early signs of a degree of creeping competitive intensity. We view 5G as a much-needed means of expanding capacity in the sector with upsides from M2M and IoT likely to remain relatively small.
  • March 4, 2019

    O2 UK delivering well on many, but not all, fronts

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    ­­­­O2’s Q4 results delivered market-leading service revenue growth of 3%, double-digit EBITDA growth, sustained strong net adds and low churn. With ARPU service revenue growth flat, all of the growth came from other service revenue including M2M (machine-to-machine) and MVNO; a lumpy category up by more than 40%. Following a period of strong outperformance, O2 will face some challenges in 2019: some cost inflation to mitigate and the risk of a churn increase following December’s outage although experience suggests this is likely to be short-lived.
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  • February 20, 2019

    Australian Telco Breakfast Roundtable: Five key discussion topics [...]

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    Background
    • On 19 February 2018, Venture Insights conducted a telco industry breakfast roundtable (in Melbourne and Sydney) to discuss the following five key topics for 2019. The consensus view was that these topics are both inter-related and very dependent on government decisions and future policy. In that regard, Australia is seen as unique to the extent to which government policy has determined market structure in the telco industry.
    Five key discussion topics for 2019
    • Will 5G leadership lead to market share gain and ARPU increases?
    • Will 2019 be the year of take-off for fixed wireless broadband substitution?
    • Will there be consolidation in the IoT market in 2019?
    • Will the Government announce its NBN sale strategy in 2019?
    • What will be the outcome of the proposed TPG – VHA merger?
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  • February 7, 2019

    TPGs merger strategy must focus on potential merger undertakings [...]

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    The ACCC has extended its decision time for the proposed TPG-VHA merger and has raised preliminary concerns that it will lead to a substantial lessening of competition. TPG has announced that it has ceased the rollout of its mobile network. Our report looks at the likelihood of whether the TPG/VHA merger will be approved given the potential no-merger test options which the ACCC could consider. 
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  • January 31, 2019

    Grappling for green shoots at Vodafone UK

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    Vodafone’s revenue trends took another step backwards this quarter (down almost 3% on our estimates) with its strongest markets (UK and Germany) weakening unexpectedly. The reiteration of their financial guidance and commitment to cost-reduction provides some reassurance although nothing in the results provides grounds for optimism; churn is not really falling and is not correlated to convergence. With the UK mobile market delivering its strongest growth in 7 years last quarter, these results may be a precursor for a more challenging outlook with Vodafone citing pressure from business pricing and out-of-bundle limits, and the outlook for RPI-linked price increases diminishing.
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  • December 14, 2018

    UK mobile market Q3 2018

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    UK mobile market service revenue grew by 2.4% in Q3, a level not seen since early 2011. However, this 0.6ppt improvement on the growth rate in Q2 was very disappointing in the context of an expected 2-3ppt revenue growth bolster from the annualisation of roaming tariff cuts. EE and O2 shared the top spot for growth, more than double the growth rate of H3G and far ahead of Vodafone which remains in negative territory and had only the slightest uptick this quarter. O2 is likely to be hit by its well-publicised network blackout in December, but experience from a similar problem back in 2012 suggests this will be modest and temporary, and it is otherwise performing well.
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  • December 11, 2018

    5G Update December 2018 – Telstra leading the race to 5G

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    Q4 2018 has been a busy time for 5G players with the government auctioning valuable spectrum bands and an update on Telstra’s progress on 5G. Australia is tracking well to have initial 5G services in 2019. This will enable strong growth in devices and mobile data consumption.
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  • December 6, 2018

    Refocus imperative at Vodafone UK

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    Vodafone’s deteriorating financial performance is as much due to an increasing margin of underperformance relative to its peers as to challenging markets such as Italy. A strategic refocus on operational performance is long overdue and seems largely sensible, save for the continued push for discount-led convergence products which are driving underperformance. Although Vodafone posted 3% organic EBITDA growth for H1 of this year and is guiding to same for the full year, we view this definition as overly flattering with true EBITDA performance flat and revenues in decline.        
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  • November 19, 2018

    Australian Mobile Telco Market Outlook

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    The Australian mobile market has been traditionally characterised as a mature market with steady growth driven by population growth and mobile broadband. However, this market is about to see strong innovation (5G) and disruption (TPG-Vodafone merger) in the next few years. We forecast the mobile market will remain the largest segment in the overall telco market with A$22.3bn in revenue by 2022. With the merger between TPG and Vodafone to form a third full service telco in the market, we expect the competitive intensity to increase with incumbents facing pricing and margin pressure from 2018-19 onwards. However, despite TPG’s aggressive initial pricing and service offering, at this stage we have been conservative in our estimates with respect to TPG-Vodafone’s impact on incumbent market shares as we expect a gradual subscriber take-up of the network over 2018-2022. The arrival of 5G and emergence of wireless access to the Internet as an alternative to fixed broadband means that the mobile market will continue to experience strong growth, with ARPUs steadying. Venture Insights believes that 5G coupled with IoT will enable the transition from a connectivity based revenue model to a services based revenue model for mobile operators.
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  • November 12, 2018

    Radcomms 2018 & the upcoming 3.6GHz spectrum auctions

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    ACMA’s premier conference Radcomms 2018 was held on October 30-31 with industry experts presenting and discussing a range of topical issues regarding spectrum regulation, new emerging trends and industry policies. Australia’s spectrum regulation should be fast tracked to enable telcos to deploy next generation technologies faster to consumers. We expect strong competition for spectrum in the upcoming 3.6GHz auction.
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  • November 1, 2018

    Australian Telecommunications Market Outlook

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    • The introduction and the rollout of the NBN has been one of the key inflection points in the Australian telco market. However, as the rollout progresses, complaints continue and the tug-of war with RSPs over CVC charges continues. This discord has led to both major and smaller RSPs experiencing a tight squeeze on margins and opportunities for bypass options
    • The Mobile segment continues its upward march but the market is about to see the impacts of a new wave of innovation (5G, IoT) and disruption (TPG Vodafone merger) in the next few years. This will severely impact fixed line broadband and nbn’s business case
    • The merger between TPG and Vodafone will create a strong third MNO in Australia and long term competition and pricing pressure with Optus and Telstra
    • Growth and broader acceptance in public cloud solutions is driving growth in the data markets as the corporate market is increasingly consolidating their voice, data and applications traffic
  • October 22, 2018

    New Zealand consumer interest growing for 5G mobile

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    Venture Insights’ latest New Zealand consumer mobile survey demonstrates growing 5G interest with video streaming and fixed wireless broadband shaping up to be key use cases. Leadership in 5G network rollout is likely to provide strong benefits from the acquisition of early adopters from competing networks.
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  • September 27, 2018

    Mobile Video, 5G Adoption and Telco Media Strategies

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    Telcos, both globally and locally, have increasingly turned to media and content, in particular sports content, to provide diversification, differentiation and to turn around slowing growth in revenue and ARPUs. Venture Insights’ latest mobile survey shows strong interest in both 5G adoption and mobile video usage – indicating a clear consumer use case for 5G.
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  • September 17, 2018

    UK Broadcast TV is growing very old, very quickly

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    UK mobile market service revenue grew by 1.7% in Q2, up from 1.3% in the previous quarter, a disappointing result in the context of boosts from both IFRS 15 accounting and the annual price rises in the quarter. O2 was the star performer this quarter, with its service revenue growth leaping ahead to claim the top spot. BT/EE’s service revenue growth declined on an underlying basis, with weak contract net adds over the last six months catching up with it, and H3G and Vodafone were slightly improved and steady respectively excluding some one-off effects. Next quarter, the impact from the EU roaming cuts will annualise out, providing a substantial fillip to all operators. Ceteris paribus, this would put market growth in the vicinity of 4%, a figure not reached for years.
  • September 11, 2018

    UK mobile market Q2 2018: Disappointment before dawn

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    UK mobile market service revenue grew by 1.7% in Q2, up from 1.3% in the previous quarter, a disappointing result in the context of boosts from both IFRS 15 accounting and the annual price rises in the quarter. O2 was the star performer this quarter, with its service revenue growth leaping ahead to claim the top spot. BT/EE’s service revenue growth declined on an underlying basis, with weak contract net adds over the last six months catching up with it, and H3G and Vodafone were slightly improved and steady respectively excluding some one-off effects. Next quarter, the impact from the EU roaming cuts will annualise out, providing a substantial fillip to all operators. Ceteris paribus, this would put market growth in the vicinity of 4%, a figure not reached for years.
  • September 5, 2018

    High 5G consumer interest keeps pressure on network rollout

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    Operator positioning for 5G network plans in Australia and New Zealand continues to pick up pace – as Venture Insights’ latest consumer mobile survey demonstrates strong interest from Australian consumers. Leadership in 5G network rollout is likely to provide strong benefits from the acquisition of early adopters from competing networks.

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  • Free
    August 31, 2018

    Consumers lose while the market wins: TPG and Vodafone merger

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    TPG and Vodafone announced the merging of the two companies to form a third major telco which will challenge leaders Telstra and Optus. This move is positive news for the market as the likelihood of a mobile price war is expected to be reduced, stabilising ARPUs and margins.  

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  • August 9, 2018

    IoT Connectivity Technologies

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    The Internet of Things is becoming a pervasive part of our technology ecosystem. At its heart, communication and connectivity technologies enable IoT devices to interact and share information. There are a number of connectivity options available for IoT networks, each with specific characteristics which makes them suitable for specific applications and use cases.        
  • August 2, 2018

    Revenues down, guidance in the balance: Vodafone Q1 2018/19 resul [...]

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    EBITDA growth guidance of 1-5% is in question with group revenues flat to down. Counting AMAP growth in local currencies helps, as will cost control and roaming relief. Sustaining growth in Germany will be key; convergence-led ARPU declines could prove to be something Vodafone can’t afford. Vodafone’s UK business performed strongly in terms of mobile subscribers and fixed business financials, although revenue growth is still lacklustre. Profitability is expected to increase markedly, boosted 10ppts by roaming tariff relief. Although we view Iliad’s business model in Italy as unsustainable, it will nonetheless continue to put significant pressure on Vodafone Italy’s ARPU, which is almost three times that of Iliad’s package.  
  • July 26, 2018

    The drive for convergence: a value-destructive strategy

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    Many European telecoms operators are pursuing a fixed/mobile convergence strategy on the pretext that the addition of mobile reduces churn. We see no evidence of churn reduction from this strategy. Discounts required to encourage take-up of fixed/mobile services are often value-destructive, even before competitor reaction: a 10% bundle discount necessitates a 2ppt improvement in churn to wash its face economically. M&A premia on the basis of convergence synergies raise the hurdle even higher. Most UK operators offer very limited discounts on fixed/mobile bundles for now, sensibly focusing on enhanced services. Vodafone is the most aggressive, albeit less so than it is elsewhere. All UK players should hope that it stays this way.
  • July 25, 2018

    Unlimited mobile data – not quite all you can eat…

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    Mobile data usage in Australia is expected to increase 6x between 2017 to 2021, driven by advances in mobile technologies, increasing time spent on larger screen smartphones and rising video streaming on mobile. Unlimited mobile data plans have finally made their way to Australian shores, as Telcos look to counter the impact of rising competitive intensity.  
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  • June 20, 2018

    European mobile in Q1 2018: North–South divide to exacerbate

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    In this report we show our analysis of revenue growth trends for mobile operators in the top five European markets (UK, Germany, France, Italy and Spain). The historical analysis is based on the published results of the operators, although they include our estimates where their data is inconsistent or incomplete, and we have updated previous period figures where better information has come to light. A copy of the underlying data in spreadsheet format is available to our subscription clients on request.
  • June 8, 2018

    UK mobile market Q1 2018: Primed for revenue acceleration

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    Service revenue growth for the UK mobile market improved in the first quarter of the year, lifting from 1.0% to 1.2%. There was an easing of the EU roaming regulatory impact helping growth improve, but the SIM-only drag likely grew to counteract this, suggesting a modest underlying improvement overall. We expect continued market growth improvement in the coming year due to a number of tailwinds, namely annual price rises, the arrival of IFRS 15, and the EU roaming impact dropping out. The fundamentals of the market remain solid: competition is rational; pricing is firm; data demand is strongly rising; supply is partially constrained; MVNOs and convergence do not appear a threat.  
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