Please Login / Register to purchase and view full reports.
-
New
June 10, 2021NBNâs SAU Discussion Paper: Putting the broadband market on a n [...]
Focus Report, ReportsThe NBN Coâs 7 June Discussion Paper on a new wholesale pricing scheme will, if implemented, shift Australiaâs broadband industry economics onto a new path. The timing is no coincidence. As the migration to the NBN concludes and NBNâs 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, 2021Looking to annualisation and beyond: UK mobile market in Q1 2021
Market Outlook, Reports -
June 3, 2021Monthly Telco Roundup for May 2021
Flash Report, ReportsIn 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
- Telstraâs renewable energy push has legs
- Regional connectivity gets a boost in AU and NZ budgets
-
June 2, 2021Some recovery, more to come: UK broadband, telephony and pay TV t [...]
Market Outlook, Reports -
May 31, 2021Trade books in the pandemic: Fair retail ending
Focus Report, Reports- 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, 2021AU video viewing forecast to 2030: The new normal emerges
Focus Report, ReportsIn 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, 2021Vodafone: Throwing money at the problem
Focus Report, Reports- Vodafoneâs additional investment to boost a growth story that isnât yet delivering failed to impress investors who value cashflow much more than promises for tomorrow, particularly given Vodafoneâs track record with restructuring plans and product development
- Itâs 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, 2021O2: Focus on profitability pays off
Focus Report, Reports- The highlight of what seems set to be O2âs 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 H3Gâs 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 O2âs relative growth will suffer from lower in-contract price rises than peers this spring
May 23, 2021European ad-supported TV: Two consolidation paths
Flash Report, ReportsWave after wave of consolidation in the entertainment industry has progressively dwarfed European operators: in 2010, the revenues of the regionâs largest broadcaster, the RTL Group, already amounted to just 20% of Disneyâs, 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, 2021BT: The J-curve cometh
Focus Report, Reports- 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, 2021Publishing in the pandemic: Print squeeze, digital boost
Focus Report, Reports- The press industry lost ÂŁ1 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 ânew normalâ, is mixed. Consumer work patterns and news, information and entertainment habits are unlikely to âbounce backâ to pre-pandemic levels, placing free commuter titles at particular risk. Signs of confidence through online innovation are welcome
May 18, 2021Sky v.2.0: Aggregation, originals and fibre
Focus Report, Reports- 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 studiosâ 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 Skyâs 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 Comcastâs 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, 2021Virgin Media: Ending on a high
Focus Report, Reports- Virgin Mediaâs 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, 2021Venture Insights AU survey 2021: Broadband market converges as NB [...]
Focus Report, ReportsIn 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, 2021TV advertising: Evolving the model
Focus Report, ReportsAdvertising income has been the lifeblood of commercial TV for decades, but declining linear audiencesâcombined with digital video alternativesâmean 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, 2021BT Sport for sale: All change for the game changer
Flash Report, ReportsA 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, 2021Premier League rights: Forgoing a faithful formula?
Flash Report, ReportsThe 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 partiesâmainly centring around financial stability and certainty, especially given the pandemic, which has cost the Premier League clubs an estimated additional ÂŁ1.5 billion of operating losses[1]âthe 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. ÂŁ1.4 billion in fiscal 2020 and c. ÂŁ1.3 billion in fiscal 2021. This compares to a baseline of ÂŁ580 million of operating losses in 2019, pre-pandemic. Figures do not account for player trading.
May 6, 2021Venture Insights NZ survey 2021: No end in sight for NZ mobile co [...]
Focus Report, ReportsIn 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, 2021ITV Q1 2021 results: Returning to 2019 levels
Flash Report, ReportsTotal 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 yearâfollowing the strong end to 2020âthere 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 ÂŁ402 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, 2021BBC licence fee settlement: Push outside London will need further [...]
Focus Report, Reports- The launch of the BBCâs blueprint for its approach to the Nations and Regions is timely, coinciding with the kick-off of negotiations over the BBCâs financial settlement for the next charter period
- If the licence fee were to be frozen or only an inflationary increase applied, by 2027 the BBCâs annual licence income would be ÂŁ302-539 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 BBCâs other commercial ventures) would need to grow by an order of magnitude
May 4, 2021Appleâs privacy rollout: A trial for regulators
Flash Report, ReportsApple 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, 2021Deals not quite done: 5G spectrum auction final results
Flash Report, ReportsThe 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, 2021The push for OpenRAN: Careful what you wish for
Flash Report, ReportsThe term âOpenRANâ 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, 2021Netflix Q1 2021: Muted growth, but after a massive 2020, does it [...]
Flash Report, ReportsGrowth 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 servicesâsee the growth of Disney+âpulling 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.