Australian Household 5G Fixed Wireless Substitution Forecast \ NZ's Farmside hits 10,000 rural wireless \ European TV & video subscription platforms: Recovery from lockdown, pivot to originals \ Back in play: Merger prospects in UK mobile resurrected

Welcome to the Venture Insights newsletter! In this week’s edition, we look at the following:
  • Australian Household 5G Fixed Wireless Substitution Forecast
  • NZ’s Farmside hits 10,000 rural wireless
  • European TV & video subscription platforms: Recovery from lockdown, pivot to originals
  • Back in play: Merger prospects in UK mobile resurrected

CHART OF THE WEEK

Estimated Amazon Prime Video Subscriptions, top five European markets (millions)

Australian Household 5G Fixed Wireless Substitution Forecast

5G household coverage over time, by operator

Source:  Venture Insights

The advent of 5G has made both fixed wireless and mobile broadband more attractive to consumers, and this will lead to a significant growth in wireless broadband usage. Households may cut their fixed broadband connection and rely on wireless devices for broadband connectivity.

The mobile network operators (MNOs) have strong incentives to pursue 5G fixed wireless. There is little scope for the telcos to improve margins from low usage customers that remain on the nbn network. However, migration of these customers from nbn to 5G fixed wireless i.e. carriers’ own networks provides an avenue for them to improve margins. For this reason, we expect 5G will be a strong areas of focus by the mobile network operators over the coming years. But this will be a selective strategy, rather than a complete bypass of the nbn. This report forecasts the number of households and the household share that we expect to take up 5G fixed wireless to FY24. The report also:
  • Forecasts the rollout of 5G coverage by operator

  • Assesses current 5G fixed wireless offers and the likely future marketing strategy for 5G fixed wireless

  • Discusses our consumer survey data on willingness to take up 5G fixed wireless, and identifies the segment of households that the MNOs will prioritise

  • Assesses the likely role of mmWave after the upcoming 26GHz auction

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NZ’s Farmside hits 10,000 rural wireless customers

New Zealand’s Farmside announced it has 10,000 rural wireless customers connecting via the Rural Broadband Initiative (RBI). Farmside is 100% owned by Vodafone New Zealand and offers a range of regional wireless broadband, satellite and fibre plans. Farmside reported that the Rural Connectivity Group (RCG) delivered 150 RBI Phase 2 sites which deliver 4G wireless broadband into rural Aotearoa. RCG is a joint venture between Spark, Vodafone and 2 degrees and has partnered with Crown Infrastructure Partners to deliver 400 new mobile cell-sites to rural New Zealand by December 2022. The topic of regional shared RAN infrastructure was raised by Venture Insights in our October 2019 Comms Day conference presentation and was highlighted by the Australian Government in its current Mobile Blackspot Round 5a discussion paper as a priority solution.

Click to see our Shared Infrastructure Presentation:
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European TV & video subscription platforms: Recovery from lockdown, pivot to originals

Spending on “high-end” TV and Video Production, (£m)

Source: Enders Analysis
With a lack of live sport, the lockdown weighed on incumbent pay-TV platforms’ subscriptions. SVOD providers leveraged their cheap positioning—Netflix and Amazon Prime Video now rank above other subscription services in Europe, and Disney+ had a successful launch Incumbents—Sky, Canal+, Movistar+—all pursue a twin-track strategy. They are positioning themselves as gatekeepers thanks to service bundles, while redirecting resources away from sports towards original series European productions are increasingly garnering audiences outside of their home markets, regardless of the production language. Netflix is a major conduit for European exports, due to personalisation of the interface and high-quality dubbing
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Back in play: Merger prospects in UK mobile resurrected
H3G Service Revenue and EBITDA Growth
Source: Enders Analysis
  • With the European Commission’s decision to block the H3G/O2 merger annulled and with new H3G management sounding a very pro-consolidation tone, the prospect of mobile operators going from four to three in the UK seems to be back on the cards
  • Both H3G/Vodafone and H3G/O2/Virgin Media combinations seem possible although each has its own complexity—existing network sharing arrangements being one of them
  • With 5G delays and mounting costs following the decision to ban Huawei, consolidation is increasingly feeling like the most viable option for H3G whose returns are already too low and falling rapidly
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