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  • August 27, 2020

    Webscale Playbook: Tencent

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    Tencent’s meteoric rise into one of the leading internet businesses coincides with China’s internet boom that started at the end of 20th century. According to the ITU estimates, just ~1.8% of China’s total population were internet users in the year 2000 – two years after Tencent was founded – that has now exploded to about 64%. Tencent’s initial journey began with the desktop-based instant messaging offering, QQ (initially QICQ), which slowly gained popularity and provided the company with a strong footprint in the domestic market. The start of the new decade saw more users going mobile with the increased cellphone penetration in the country, which led Tencent to launch its popular mobile instant messaging app, WeChat (Weixin in China) in 2011.
  • August 27, 2020

    New Zealand Telco Market Outlook

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    We anticipate a negative-growth telecommunications market over the next few years, with broadband growth offset by declines in mobile and fixed voice.
  • August 25, 2020

    UK mobile market in Q2 2020 – Recovery interrupted

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    The sector was hit harder than expected by COVID-19 with service revenues declining by 7% overall vs a decline of just 1.6% in the previous quarter. Many telecoms operators across Europe have become more negative on the near-term outlook than they were a couple of months ago with full year guidance now downgraded by almost all players
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  • August 24, 2020

    UK broadband, telephony and pay TV trends Q2 2020 – Things [...]

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    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
  • August 21, 2020

    Virgin Media UK – Indeterminately boosted

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    Virgin Media had its strongest subscriber performance for years in Q2, with its (ex-Project Lightning) existing base footprint showing positive growth to add to the subscribers gained on its Project Lightning network extension. This was partly due to temporary factors, with both Openreach and Sky not able to do in-home installations for part of the quarter, but the company has reported some sustained momentum, with the crisis boosting demand for higher speed broadband, and has decided not to implement its usual annual price increase in H2 to avoid the usual accompanying churn and customer dissatisfaction, instead choosing to prioritise subscriber growth to compensate for the ARPU shortfall.
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  • August 20, 2020

    Optus 1QFY21 and Vocus FY20 earnings update: revenues fall amidst [...]

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    Both Optus’ and Vocus’ revenues were impacted by COVID-19. Both operators saw mobile revenues decline in the last quarter, as consumers relied more on fixed broadband while working from home. Pre-COVID-19, we noted rising pressure on mobile ARPUs due to competition and increased consumer interest in cheaper plans. We forecast that COVID-19 would exacerbate these pressures, and this has been validated by Vocus’, Optus’ and Telstra’s results this week.
  • August 18, 2020

    BT UK – COVID-19 hit, fibre promise

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    BT’s first full quarter under the shadow of COVID-19 revealed a mix of negative impacts not entirely as predicted, by ourselves or indeed BT itself. The suspension of sport certainly had an impact on BT Sport revenue, but only about half of what we had feared (less than £50 million versus around £100 million), and Openreach was also relatively unaffected, perhaps having returned to full service levels quicker than anticipated. There was a strong negative impact on B2B revenue, but this was much more focused on SMEs than large corporates, with Global’s financials largely unaffected (so far), and mobile (which BT had not specifically warned about) was hit hard across consumer and (especially) B2B, with the results of the other mobile operators suggesting that the effect was market-wide.
  • August 18, 2020

    ITV UK H1 2020 results

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    There may be light at the end of the tunnel. After Q2 advertising revenues dropped 43% YoY, ITV has noted that there has been an upward trajectory (July down 23%, August appearing to be even better). This would leave ITV’s advertising revenues down between 15-25% for 2020 (ITV is unwilling to give forecasts). It appears that advertisers are beginning to think further ahead than they have for months—anecdotally, while around 80% of ad revenue is normally booked prior to the month’s start, this had reversed to about 20% in Q2.
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  • August 17, 2020

    Telstra and nbn Co FY20 update: increasing wireless and enterpris [...]

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    Telstra’s and nbn Co’s FY20 results show the early impact of COVID-19, but also contain indications of underlying shifts in the industry. We expect rising competition for fixed broadband subscribers as the mobile network owners (MNOs) try to maximise returns from the 5G mobile investment by launching 5G fixed wireless. Telstra’s announcement it will roll out 5G fixed wireless will step up this rivalry.  
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  • August 14, 2020

    Update: Foxtel SVOD growth can’t prevent major restructure

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    Last year we reported on Foxtel’s battle with its OTT rivals, and its attempt to capture a share of the OTT market. In 2019, we had a number of concerns about Foxtel. With the release of the News Corp FY20 results on 11 August 2020, this report examines whether our concerns were justified. In summary, we think that the last twelve months have largely borne them out, with the exception of Kayo cannibalisation.  
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  • August 12, 2020

    Art of the deal – Microsoft swoops for TikTok

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    Microsoft hopes to buy TikTok from Chinese owner ByteDance before President Trump’s Executive Order halts transactions with the company in mid-September. Twitter is now in the game, but is unlikely to prevail
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  • August 12, 2020

    O2 UK: COVID and loss of Carphone bite

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    Along with the rest of the mobile market, O2’s results were harder-hit by COVID than expected, with service and total revenues down by 9% and 4% respectively
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  • August 11, 2020

    Sky UK Q2 2020 results – Emerging from the worst?

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    Sport is back, but its recent hiatus amid the COVID-19 crisis hit Sky hard, with Q2 revenue plunging 12.9% year-on-year. EBITDA remains flat for now, with sports rights cost absorption postponed but not cancelled
  • August 6, 2020

    The New Era of Voice Commerce: Be in It to Win It

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    The rise of voice technology is transforming the way we consume information and make purchases, giving customers the option to engage in a hands-free and seamless shopping experience.  
  • August 4, 2020

    Too big to derail – Facebook unmoved by its advertiser boyc [...]

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    Facebook grew revenues by 11% in Q2. This rate is higher than investors expected, but still driven to record lows by the pandemic slowdown. It forecasts 10% growth in Q3  
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  • August 3, 2020

    Vodafone UK: Growth dips due to COVID and more

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    Vodafone’s performance this quarter was hit both by COVID and an underlying deterioration in its operational momentum—disappointing given regulatory easing and easier comparables  
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  • July 30, 2020

    Australian Telecommunications Market Outlook

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    We anticipate a negative-growth telecommunications market over the next few years, with slow growth in consumer revenues being offset by declines in the enterprise market. In 2020, we expect COVID19 to have a negative effect on both consumer and enterprise revenues as economic activity declines.  
  • July 29, 2020

    TalkTalk UK: Post-lockdown challenges and opportunities

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    TalkTalk started its new financial year with revenue growth declining to -8% in Q1, although this is partly lockdown-related, and costs have also declined as churn plummeted  
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  • July 28, 2020

    HBO Max: Failing to generate retail momentum

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    In a cautionary note on the prospects of the SVOD boom, the 27 May US launch of direct-to-consumer video service HBO Max did not save its parent company Home Box Office from a 5% year-on-year (YoY) decrease in revenues in Q2 2020.  
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  • July 24, 2020

    Technology and connectivity critical for Australian SMBs

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    With COVID-19, the Australian economy has undergone a large demand-side shock where consumer demand for many products and services has disappeared following the introduction of social distancing rules to flatten the infection curve.  
  • July 22, 2020

    UK Betting & gaming advertising – Inadequate solution [...]

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    The Betting and Gaming Council (BGC) which represents 90% of the UK’s betting and gaming industry (but not the National Lottery/other lotteries) announced its withdrawal of all TV and radio advertising for casino, slots and bingo during lockdown
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  • July 20, 2020

    UK TV broadcasters – Silver linings from COVID-19

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    Admissions and box office revenues in 2020 will be the lowest in over three decades. The pandemic forced the closure of theatres, putting pressure on cinema to a degree unlike ever before
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  • July 16, 2020

    New Zealand Consumer Broadband Behavioural Survey

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    The purpose of this survey (completed 29th April 2020) was to understand the change in consumers broadband usage behaviour due to COVID-19 for a range of new reasons including work from home, video conferencing with friends and family, school learning, adult learning and entertainment.  
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  • July 15, 2020

    UK Huawei ban – Counting the cost

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    Press reports suggest that the restrictions on Huawei equipment may morph into a full ban, with new installations stopping soon and existing equipment to be removed by 2029
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