Uniti set to acquire OptiComm\ Online customer reviews\ European football\ TalkTalk UK\ State-based cyber attack



Welcome to the Venture Insights newsletter!
In this week’s edition, we look at: 

  • Uniti set to acquire OptiComm
  • Online customer reviews – Platforms reach for the stars
  • European football – An opportunity to reset
  • TalkTalk UK – Cost savings drive earnings in a challenging market
  • State-based cyber attack targeting Australia  

CHART OF THE WEEK

Uniti’s acquisitions in 2019 



Source: Uniti’s half yearly results, December 2019 

Uniti set to acquire OptiComm

NBN and non-NBN fixed wireless subscribers in Australia 



Source: Venture Insights models, WISPAU 

Both Uniti and OptiComm have a market capitalisation of around $500mn each, and a combined entity will have more than 110,000 active premises and more than 190,000 premises within its footprint across approximately 800 locations across the country. They also have a contracted pipeline of 188,000 lots. They already have a strong presence in greenfields with 110,000 active premises as compared to NBN’s 500,000, and this acquisition will provide them greater impetus to expand in brownfields. Uniti already offers fixed wireless as an alternative to NBN that are similarly priced as NBN fixed wired services. We also note that as Uniti expands its footprint in new areas, its return on investment may get smaller as it competes with other RSPs/wholesale providers that already have a strong presence in those areas. For more details, read our latest report.

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Online customer reviews – Platforms reach for the stars

 Consumers massively read reviews, despite doubts



Source: Pew Research, Enders Analysis

Online reviews are a vital input for consumer decision-making. However, reviews are easy to manipulate, and widespread fraud is undermining credibility and raising the issue of consumer protection. Facebook, Google, and Amazon utilise reviews to improve the consumer experience, but also to sell advertising to businesses and to address fraud. These companies leverage their data superiority to better utilise reviews on their platforms, and possess a competitive advantage, versus sites like TripAdvisor, Yelp, and eBay. Demand for expert opinion remains strong, yet is supplied only by publishers and Which?, a small segment in terms of share of traffic relative to platforms. For more details, click to read a report from our UK research partner, Enders Analysis.

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European football – An opportunity to reset

 COVID-19 impact on Ligue 1’s results, FY ending June 2020 (€m)



Source: Enders Analysis, Mediapart

The COVID-19 crisis is compounding the already grim revenue prospects for upcoming football rights sales in continental Europe. The financially weakest leagues in Italy and France are especially exposed. Serie A is exploring deals with private equity firms, with the pros and cons finely balanced. There is a window of opportunity for Sky and Canal+—the adults in the room—to build coalitions with selected clubs to nudge leagues towards needed reforms including longer licence terms, reducing the number of clubs and more equal revenue splits. For more details, click to read a report from our UK research partner, Enders Analysis.

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TalkTalk UK – Cost savings drive earnings in a challenging market

TalkTalk Headline EBITDA progression (£m)



Source: Enders Analysis, company reports

TalkTalk grew EBITDA by 10% in 2019/20, an impressive cost cutting driven result, with revenue and gross margin falling as the company struggles with the move to high speed. The company is cautious on 2020/21, indicating only stable EBITDA citing CV-19 related pressures, although the lockdown has also brought much lower churn and an improving price environment. The move to full fibre could prove challenging in the longer term, but it also brings an opportunity to rebrand away from a pure price focus, the source of much of TalkTalk’s challenges. For more details, click to read a report from our UK research partner, Enders Analysis.

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State-based cyber attack targeting Australia



Source: WWW.WHATISSSLCERTIFICATE.COM

On Friday 19 June, the Australian Government announced that a “sophisticated state-based cyber actor” is targeting Australian organisations, including all levels of government, industry, political organisations, education, health, essential service providers and operators of other critical infrastructure. Limited details of the attack have been released. But PM Scott Morrison said the threat of cyber attacks have been identified because of the scale and nature of the targeting and the trade craft used. Venture Insights has previously published a report on the rising costs of cyber activity in Australia, the growing sophistication of cybercriminals and their toolkits, and the involvement of executive leadership in preparing organisations to combat cyber security risks. Venture has collated six key questions senior executives should be asking on a regular basis to manage cyber security risk in their organisations. For more details, click to read our report.

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