Reports

Filter by

Filter by

Filter by

Please Login / Register to purchase and view full reports.

  • New
    June 10, 2021

    NBN’s SAU Discussion Paper: Putting the broadband market on a n [...]

    ,
    The NBN Co’s 7 June Discussion Paper on a new wholesale pricing scheme will, if implemented, shift Australia’s broadband industry economics onto a new path. The timing is no coincidence. As the migration to the NBN concludes and NBN’s focus shifts from rollout to operation and upgrade, the pressures on RSPs will also shift. The move to a flatter wholesale price structure will reinforce trends to more straightforward product sets that we already see in the market for broadband services. And with the threat of migration churn receding, RSPs will have both the opportunity and the incentive to look again at retail pricing.
  • June 8, 2021

    Looking to annualisation and beyond: UK mobile market in Q1 2021

    ,
  • June 3, 2021

    Monthly Telco Roundup for May 2021

    ,
    In this monthly round up we analyse some of the key events and trends that helped to shape the telecommunication market in Australia and New Zealand and assess their impact upon customers and the competitive landscape:
    • Growing investor appetite for telco assets will create its own supply
    • Telstra’s renewable energy push has legs
    • Regional connectivity gets a boost in AU and NZ budgets
  • June 2, 2021

    Some recovery, more to come: UK broadband, telephony and pay TV t [...]

    ,
  • May 31, 2021

    Trade books in the pandemic: Fair retail ending

    ,
    • The consumer books market has flourished during the pandemic: following early worries, publishers are reporting strong growth and profits
    • However, bookshops, the most important point of contact between the industry and readers, are facing their toughest challenge yet as ecommerce booms and continued home-working saps high street footfall
    • Publishers and authors are embracing new, online ways of promoting titles. These will require new ways of working, and are not substitutes for dedicated shops, which must be protected as much as possible
  • May 28, 2021

    AU video viewing forecast to 2030: The new normal emerges

    ,
    In our previous reports, we have raised issues around ARPU pressure on mobile service providers and highlighted the importance of price as a driver of telecommunications buying. We have said that competitive intensity (along with aftereffects of COVID-19) will put pressure on ARPUs which in turn requires a strong focus on keeping costs under control to maintain profitability.
  • May 26, 2021

    Vodafone: Throwing money at the problem

    ,
    • Vodafone’s additional investment to boost a growth story that isn’t yet delivering failed to impress investors who value cashflow much more than promises for tomorrow, particularly given Vodafone’s track record with restructuring plans and product development
    • It’s a surprising time to be splashing the cash with leverage still finely balanced and riding on Vodafone delivering a 10ppt turnaround in EBITDA growth next year vs last. Commercial activity looks set to continue to be dominated by EBITDA promises
    • Selling a stake in Vantage Towers (temporarily) solved a leverage problem, but is creating a control problem, with the uncertain level of its future capex adding to investor concerns
  • May 24, 2021

    O2: Focus on profitability pays off

    ,
    • The highlight of what seems set to be O2’s final results as a standalone company is OIBDA growth of almost 8% in spite of a drag from weaker net adds
    • It has also been a good quarter for O2 strategically with preliminary merger approval and contiguous 5G spectrum although that may be matched by its peers in subsequent deals given H3G’s openness to negotiation
    • The annualisation of COVID impacts as well as an improving mobility picture will provide a significant boost to trends, although the roaming drag seems unlikely to reverse any time soon and O2’s relative growth will suffer from lower in-contract price rises than peers this spring
  • May 23, 2021

    European ad-supported TV: Two consolidation paths

    ,
    Wave after wave of consolidation in the entertainment industry has progressively dwarfed European operators: in 2010, the revenues of the region’s largest broadcaster, the RTL Group, already amounted to just 20% of Disney’s, and by 2020 this ratio had halved. The last decade has seen the emergence of global vertically integrated content producers and distributors such as Netflix and Amazon and the spread of this model to Hollywood-based studios, while the likes of Facebook and Google have grown to become direct competitors to TV channels that used to be seen as 'licences to print money'. Broadcasters are still profitable, and some very much so. But savvy investors believe this is looking suspiciously like the high earnings of printed newspapers circa 2007, or a Wile E. Coyote run over the edge of the cliff.
  • May 20, 2021

    BT: The J-curve cometh

    ,
    • BT ended a very challenging 2020/21 financial year with its worst quarter yet for EBITDA growth, as the third national lockdown impacted mobile, offices, pubs/clubs and installation revenue streams
    • There are many turnaround drivers ahead though, including price rises, back book effects annualising, lockdown effect reversals, and full fibre benefits, but returning to revenue growth by the end of the year still looks challenging
    • The acceleration and expansion of fibre build is very positive in our view, but BT has given no guidance on the future benefits aside from capex returning to normal levels, which is doing it no favours with investors
  • May 19, 2021

    Publishing in the pandemic: Print squeeze, digital boost

    ,
    • The press industry lost £1 billion off the topline from the calamitous decline in print revenues due to pandemic-related mobility restrictions, partly offset by gains on digital subscriptions, much harder to precisely size in revenue terms
    • Trapped at home for the most part, online traffic to BBC News and news publisher services boomed. Popular news sites marginally grew digital advertising while the quality nationals attracted 800,000 new paying subscribers to reach nearly three million in 2020
    • The outlook for 2021, in the transition to the ‘new normal’, is mixed. Consumer work patterns and news, information and entertainment habits are unlikely to ‘bounce back’ to pre-pandemic levels, placing free commuter titles at particular risk. Signs of confidence through online innovation are welcome
    Sector , , .
  • May 18, 2021

    Sky v.2.0: Aggregation, originals and fibre

    ,
    • After a strong post-pandemic rebound, Sky has the opportunity to leverage its strong reputation with consumers to meet the challenge posed by new competitors and the studios’ direct-to-consumer transition, establishing Sky Q as the ultimate gatekeeper of video subscription homes
    • Sports rights costs in Germany and Italy have been cut significantly, while Sky’s spend on UK Premier League rights will decrease in real terms. Savings will ease the financing of the shift to original content, which, associated with owner Comcast’s NBCU output, anchors the aggregation strategy
    • Fibre deployment in the UK and Italy presents a subscriber and revenue growth opportunity, and underpins the gradual shift away from satellite to online content distribution
  • May 16, 2021

    Virgin Media: Ending on a high

    ,
    • Virgin Media’s subscriber boom continued into 2021, despite a marked price rise in Q1, benefiting from lockdown and continued demand for higher speed broadband
    • ARPU remained weak in Q1, suppressing revenue growth, but this will recover (somewhat) in Q2 as the price rise takes effect, countering the current disconnect between volume and revenue growth
    • The merger with O2 is set to complete in June, with much operational pre-merger preparation already done, but the key strategic questions appear yet to be decided
  • May 13, 2021

    Venture Insights AU survey 2021: Broadband market converges as NB [...]

    ,
    In our previous reports, we have raised issues around ARPU pressure on mobile service providers and highlighted the importance of price as a driver of telecommunications buying. We have said that competitive intensity (along with aftereffects of COVID-19) will put pressure on ARPUs which in turn requires a strong focus on keeping costs under control to maintain profitability.
  • May 13, 2021

    TV advertising: Evolving the model

    ,
    Advertising income has been the lifeblood of commercial TV for decades, but declining linear audiences—combined with digital video alternatives—mean the TV advertising model must evolve to ensure it remains as potent a medium for brands as ever. Lack of effective audience measurement and somewhat opaque advertiser/agency/sales house relationships are hampering linear TV advertising revenues. Both issues need resolving to underpin a healthier ecosystem overall. Flexibility is key to this evolution. A move to audience buys across most linear and BVOD inventory would provide greater flexibility and targeting for advertisers, and would sit alongside some premium context buys. A greater onus on volume deals would give broadcasters more certainty to invest in content and their advertising propositions.
  • May 12, 2021

    BT Sport for sale: All change for the game changer

    ,
    A move away from premium sport is long overdue from BT, with there having proved to be little strategic, 'halo' or other cross-over benefit to its core broadband and mobile businesses. Following a press leak the night before, BT last week (29 April 2021) confirmed that "early discussions" were taking place with "a number of select strategic partners" concerning the BT Sport business. The press leak revealed further that the discussions related to the sale of a stake in the business, with DAZN, Amazon, Disney and ITV reportedly in the frame.
  • May 12, 2021

    Premier League rights: Forgoing a faithful formula?

    ,
    The Premier League is reportedly seeking to roll over its existing domestic TV rights deal, in a bid to shore up its financial position given its losses during the pandemic In the wake of an explosion of football news surrounding the failed European Super League (ESL) breakaway, the Premier League reportedly wants to forgo the next auction for its live domestic broadcasting rights (which would cover the three seasons from 2022-25), and instead roll over its existing deals with Sky, BT and Amazon with broadly similar packages. Should this be achieved, we would expect to see a substantial discount in the negotiated price. It remains unknown whether the rollover would encompass all three seasons or simply delay the auction by a year or two. While there are obvious benefits for all the involved parties—mainly centring around financial stability and certainty, especially given the pandemic, which has cost the Premier League clubs an estimated additional £1.5 billion of operating losses[1]—the enormous sums at stake mean that negotiations are likely to be fierce. Reportedly, the Premier League has also sought permission from the UK government to pursue such an arrangement. [1] We estimate the collective operating losses of the 20 Premier League clubs to be c. £1.4 billion in fiscal 2020 and c. £1.3 billion in fiscal 2021. This compares to a baseline of £580 million of operating losses in 2019, pre-pandemic. Figures do not account for player trading.
  • May 6, 2021

    Venture Insights NZ survey 2021: No end in sight for NZ mobile co [...]

    ,
    In our previous reports, we have raised issues around ARPU pressure on mobile service providers and highlighted the importance of price as a driver of telecommunications buying. We have said that competitive intensity (along with aftereffects of COVID-19) will put pressure on ARPUs which in turn requires a strong focus on keeping costs under control to maintain profitability.
  • May 6, 2021

    ITV Q1 2021 results: Returning to 2019 levels

    ,
    Total advertising revenues were down 6% year-on-year in Q1, but strong expected growth in Q2 should ensure H1 is on par with 2019, and up 26% on 2020 Coming into the first quarter of this year—following the strong end to 2020—there was little market visibility of TV advertising revenues due to the possible impact of Brexit on advertisers' supply chains, and of course the effect of the pandemic over the winter. ITV reported total advertising revenues down just 6% year-on-year to £402 million, with the market being stronger than previously anticipated. Perhaps of greater interest, however, is the outlook ITV gave for April to June, given the 43% total advertising revenue decline ITV experienced last year as a direct result of COVID-19. In contrast April was up 68% while May and June are expected to be up at least 85%. While these are certainly buoyant figures, it should be noted that this would mean H1 2021 would be on par with 2019.  
  • May 5, 2021

    BBC licence fee settlement: Push outside London will need further [...]

    ,
    • The launch of the BBC’s blueprint for its approach to the Nations and Regions is timely, coinciding with the kick-off of negotiations over the BBC’s financial settlement for the next charter period
    • If the licence fee were to be frozen or only an inflationary increase applied, by 2027 the BBC’s annual licence income would be £302-539 million lower in real terms. Just to maintain the BBC's current levels of funding, it would need an inflationary increase, plus an annual increase of 2.0%
    • The BBC's commercial ventures are unlikely to cover any shortfall in licence fee income. To generate sufficient dividends to cover the shortfall for the PSB group, income produced by BBC Studios (and the BBC’s other commercial ventures) would need to grow by an order of magnitude
    Sector , , .
  • May 4, 2021

    Apple’s privacy rollout: A trial for regulators

    ,
    Apple this week rolled out new restrictions on the collection of mobile user data by third-party businesses. From Monday, all apps submitted to the App Store must enable the App Tracking Transparency (ATT) program, which requires app owners to display an opt-in window  by default before tracking users across third-party sites: Apple says it will ban apps that offer users rewards for enabling tracking. Developers estimate that around 80% of users may opt out, upending advertisers' ability to follow high-value iOS users across multiple apps and services. This lucrative pool of more than a billion mobile users is more robust than ever, with Apple reporting a 66% jump in iPhone sales last quarter.  
  • April 29, 2021

    Deals not quite done: 5G spectrum auction final results

    ,
    The main part of the second UK 5G spectrum auction completed on 17 March 2021, with the nature and number of blocks won by each operator decided, and we discussed the results and implications in End-of-line spectrum 50% off: UK second 5G auction results. This morning (27 April 2021) Ofcom announced the final results of the auction, which incorporates the assignment stage, i.e. deciding which particular blocks of very similar spectrum each operator receives, as well as announcing a proposed spectrum trade (still subject to Ofcom approval) between Vodafone and O2.  
  • April 29, 2021

    The push for OpenRAN: Careful what you wish for

    ,
    The term ‘OpenRAN’ covers both the separation of hardware and software across different RAN (Radio Access Network, the 'last mile' of mobile networks) elements (essentially the boxes that sit next to the antenna, at the bottom of the antenna, and/or in a nearby exchange), and having open interfaces between these elements in a variety of configurations. If this is standardised (i.e. standardising the hardware/software split and the APIs), this would allow the 'mixing and matching' of different vendors within an operator's RAN; while many operators currently have more than one RAN supplier even within a single country, these are separated geographically, and on any given site equipment has to be replaced or upgraded (to 5G for example) using equipment from the original supplier.  
  • April 29, 2021

    Netflix Q1 2021: Muted growth, but after a massive 2020, does it [...]

    ,

    Growth is down but the benefits from COVID-19 have been banked and are enduring

    Netflix added four million subscribers (net adds) in Q1 2021, compared to 15.7 million in Q1 2020. As we have noted in previous reports, 2020 was the most abnormal, fertile and opportune environment imaginable for streaming services—see the growth of Disney+—pulling forward new subscribers, delaying churn, and allowing Netflix to add 36.6 million net subscribers globally (versus 18.2 million in 2019). All, while pushing up engagement levels as linear competition was disproportionally hobbled by production shutdowns and out-of-home entertainment was put out of action.