Consumer broadband, telephony and pay TV market revenue growth plummeted to -6% in Q2 (from -2% in Q1), with all of the ‘big 4’ operators’ revenue growth taking a substantial hit. The reduction in premium sports channel revenue was by far the largest factor, with there being some other lockdown-related negative factors, such as the opportunity cost effect of extra services offered for free by the operators to help their customers during the crisis

Contents

Executive Summary

Market trends and outlook

• Broadband unseasonably strong, but line rental and pay TV volumes hit
• Football (and backbook) hits revenue growth
• All operators took a substantial hit to revenue growth
• Sport, and backbook pricing, hits ARPU
• Gross adds and churn fall in lockdown, can the churn drop be sustained?
• Working-from-home boost to fixed broadband?
• Operator financial performance very mixed due to business mix
• New customer pricing sustains lockdown recovery
• Out-of-contract notifications start to hit, and annual notifications loom
• An end in sight for bumper existing customer price rises?
• Ultrafast to the rescue?
• Q2 2020 trends: broadband actually accelerates, Virgin Media the main beneficiary
• High speed broadband adoption slows due to lockdown effects
• Q2 2020 trends: sharp drop in line rental due to stalling installations
• Q2 2020 trends: pay TV also hit by lockdown

Appendix

List of charts/tables

Market net additions

RGU and subscriber growth

RGU ARPU, volume and revenue growth

Subscriber ARPU, volume, and revenue growth

Average RGU growth by operator

Consumer revenue growth by operator

Subscriber ARPU growth

RGU ARPU growth

TalkTalk gross adds and churn during the lockdown

Broadband churn

Smartphone-only household penetration (%)

Workers wanting to work remotely post COVID-19

Financial performance and outlook

Broadband entry-level pricing, new customers (£/month)

Broadband high speed pricing, new customers (£/month)

Contract status of customers by provider

Proportion of revenue at risk if OOC customers switched to ...

Existing customer pricing changes

Gigabit-capable premises covered (m)

Full fibre pricing and (discounted) wholesale cost, £ per month

Broadband organic net adds (000)

Broadband organic subscriber growth

High speed net adds (000)

High speed penetration of broadband bases

Line rental net additions (000)

Line rental subscriber growth

Pay TV net additions (000)

Pay TV subscriber growth