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  • February 26, 2018

    Virgin Media Q4 2017 results: Growth limited by market pressures

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    Virgin Media’s Q4 performance was a little softer than expected, with subscriber figures quite weak and no improvement in ARPU growth despite a better implementation of its annual price rise. The cause is however likely market-driven, with broadband demand slowing and all operators struggling for ARPU growth, and Virgin Media does now lead the market for subscriber, RGU and revenue growth.The prospects for 2018 are solid if not spectacular, with Project Lightning driving market share gains and ARPU defended by a network speed advantage that will last for many years yet.
  • February 9, 2018

    Tencent: gaming giant heads west

    Tencent, by some counts the world’s most valuable media and entertainment company but still relatively unknown outside Asia, is riding games growth to global clout. The company offers a blueprint for successfully integrating media and entertainment companies, saving on overheads while retaining key talent and organisational culture . Tencent’s recent investments in Snap and Spotify suggest media platform ambitions beyond games in the West, but close ties to the Chinese  government could complicate regulatory approval for strategic acquisitions.
  • February 8, 2018

    Unlicensed Spectrum – a wireless pathway for OTT disruption?

    For many decades, wireless services using licensed spectrum have been the backbone of our communication networks.However, with rapid improvements in technology, communication networks using unlicensed spectrum could witness an explosion in usage and utility that could rival the licensed experience and even the NBN.
  • February 5, 2018

    Chinese online media platforms

    Baidu, Alibaba, and Tencent (BAT) have built their leading market positions in Chinese online media on the back of the mobile revolution and an absence of foreign rivals. The big three’s rivalry in online advertising reflects a broader struggle over key gatekeeper roles in the Chinese online economy, albeit one shaped by state intervention. While benefiting from protectionism at home, BAT are weak in most foreign markets and links to the Chinese state may hamper international expansion, particularly in the US
  • December 21, 2017

    Recruitment classified marketplace: Tech giants eye up LinkedIn [...]

    A strong UK labour market, with record low unemployment but historically high vacancies, has supported growth in the recruitment industry, though trends may be peaking as we reach unknown territory. These trends play out in the recruitment market before they become apparent in the labour market.Despite the fragmentation of the online recruitment listings marketplace, Indeed is well-placed to dominate this space due to its increased scale and aggressive investment strategy. Both Google and Facebook have announced their intention to move into the recruitment listings sphere, which may have consequences not only for classified expenditure but further up the value chain with the agency model. However, both giants have attempted to move into online classifieds before, with little demonstrable success.
  • December 21, 2017

    Vertical marketplaces overview and property classified outlook: E [...]

    The slowing UK economy since Q3 2016 has had a knock-on effect on the property and autos marketplaces underlying UK classified advertising revenues, with house prices slowing, transactions stabilising (instead of rising), and new car registrations down sharply in 2017 to date. Recruitment activity by agencies and employers has instead been dynamic as the UK nears full employment. Advertisers in these verticals continue to switch expenditure from print classifieds to internet portals and search, which offer superior lead generation, analytics, and user experience. Only in property do local newspapers still fulfill an important estate agency branding function for the local area, although declining readership is blunting this value to advertisers. Portal dominance comes at a price to advertisers in property, where Rightmove has resisted agent efforts to lessen dependence by listing on other brands, as well as in used autos, where Auto Trader has long reigned supreme. Recruitment is a more contested market for portals, reflecting the diverse and fragmented nature of the jobs market, but Indeed has a strong grip on the low-end, while LinkedIn remains unchallenged in social recruitment advertising
  • UK mobile market Q4 2016 – Nearly back to growth
    UK mobile market Q4 2016 – Nearly back to growth
    December 18, 2017

    European mobile in Q3 2017: Still growing (just)

    European mobile service revenue growth declined this quarter to 0.3%, likely due in large part to the increased negative impact from the European roaming surcharge cuts, which we estimate at around 0.5-1.0ppts for Europe as a whole. The continued growth was supported by continued ‘more-for-more’ price increases coupled with strong data volume growth. Partially countering this, there has been a step up in competition at the low end in some markets, often driven by the smaller operators. Looking forward, the negative EU roaming impact is likely to decline from next quarter given the end of the summer holiday season, and on balance we would expect positive price increase trends to overcome negative low end competitive trends, at least in the short term. This might change in 2018, as Iliad launches in Italy, and recently consolidated operators become more of a threat.    
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  • December 18, 2017

    UK online ad forecast 2017-2019: A grey digital market

    We estimate that UK online ad spend grew by 12.3% this year, with growth concentrated almost exclusively in mobile search and social in-feed advertising (particularly video), and mostly incremental to overall ad spend. Even after payments to publishers and distributors, Google and Facebook captured 80% of all net new spend in the market, and 96% of it flowed through their platforms. Despite improving standardisation and disclosure, the outstanding issues around measurement, the ad-tech supply chain, and particularly the obscure and growing Google/Facebook/Amazon segment, lead us to identify a large portion of digital advertising as a “grey market”: difficult to get a handle on, with uncertain beneficiaries and slippery definitions
  • December 14, 2017

    Iliad launching in Italy:Breaking the curse of the fourth operato [...]

    Against the consolidation trend in the European market, France’s Iliad is to launch a fourth mobile network in Italy in the next few weeks, thanks to a roaming and frequency access agreement with Windtre — this deal allowed Wind and Tre to gain regulatory clearance for their merger. The model followed by Iliad’s Free Mobile in France since 2012 cannot be reproduced in Italy, where prices are already low and where it has no established brand reputation. Iliad’s owner Xavier Niel’s experience in oligopolistic Switzerland is of little relevance, and Germany’s Drillisch use of M&A to fill its capacity is not an option in Italy. Nevertheless Iliad has opportunities to seize in Italy where subscriber churn is the highest in Europe, customer service variable, and trust in telecoms brands very low. A credible consumer-friendly value offer could become a real alternative to the three incumbents, although distribution will still be a challenge
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  • December 11, 2017

    UK mobile market Q3 2017

    Mobile service revenue growth dipped this quarter but this was likely entirely due to the predictable (and predicted) impact of the abolition of EU roaming surcharges.  On an underlying basis, growth improved. BT/EE extended its lead in both service revenue and contract subscriber growth terms. EE’s substantial investments in network quality and customer service have driven returns to scale, and its multi-brand approach is working well. Contrasting with the returns to scale seen at EE, TalkTalk’s MVNO has suffered the reverse of this, unable to break-even despite peaking at just shy of 1 million customers, and deciding to retreat to an agency model.  Sky Mobile is performing respectably well in context, but may be headed for scale issues itself.
  • December 7, 2017

    Vodafone Q2 2017/18 results: Revenue flat-ish, profits surge

    Vodafone Europe’s revenue growth was very similar to the previous quarter at just under 1%, but this was impressive given the considerable drag of roaming cuts, with ‘more-for-more’ tariffs coupled with data volume growth driving underlying improvement. Flat-ish revenue was enough to send EBITDA surging 13%, or around 9% excluding some one-off distortions, driven by good cost control and falling handset costs, with this trend previously disguised by profitability issues in the UK. Looking forward, the question is whether Vodafone is doing enough to cope with future competitive threats. Competitive indicators (churn, NPS) have not improved; its new initiatives are quite mixed; and competitive intensity is likely to increase across a number of markets.
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  • November 24, 2017

    TalkTalk Group Q2 2017/18 results: Growth at a cost

    TalkTalk continued to maintain positive broadband net adds in Q2 despite increased churn, and its on-net revenue growth turned positive as well, helped by the turnaround in subscriber growth trends and an overlapping price increase implemented during the quarter. The return to growth is taking its toll in marketing costs however, and the company is now guiding to a full year ‘headline’ EBITDA at the lower end of its previous given range, and this is after redefining ‘headline’ to exclude losses from its winding-down mobile business. Even this looks challenging given the cost trends in the first half of the year. The company’s new strategy of subscriber growth and focusing on the basics is probably the right one, but it is proving tough to implement in a slowing and increasingly competitive market
  • November 23, 2017

    Disruptive mobile business models – Is TPG going to be ‘Free [...]

    TPG plans to disrupt the A$18bn mobile market by launching its mobile network in Sydney, Melbourne and Canberra by mid-2018 and build out its network to 80% of the population. It will deploy a small cell network across key metros, complemented by a traditional macro network. Free Mobile (France), 2degrees (New Zealand) and FreedomPop (US/Europe) have used disruptive business models to capture share from incumbents. Free Mobile and 2degrees captured about 18% and 23% of market share respectively, and FreedomPop has added approximately 2mn subscribers since launch. With four out of five key factors going in favour of TPG, a roaming deal will also likely accelerate market share gain. However, the incumbent MNOs in the Australian mobile market are already competing on price, coverage and data, and there are many MVNOs in the low ARPU prepaid segment offering competitive pricing and data

  • October 25, 2017

    Australia’s 5G roadmap – on your mark, get set, go…

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    While 5G standards are yet to be finalised, it is clear 5G will significantly increase network performance with improved connectivity, faster speeds and very low latency. However, to fully exploit the potential of 5G, the Australian telco market needs a policy framework that prioritises 5G and focuses on spectrum management and deployment strategies.
  • Mounting risks to marketing effectiveness
    Mounting risks to marketing effectiveness
    October 20, 2017

    US ISPs hail the end of online privacy rules

    The Federal Communications Commission’s Privacy Order (FCC) was overturned by the Senate, clearing the way for ISPs to ramp up consumer data-driven advertising revenue. While Google and Facebook dominate digital advertising in the US as in other markets, the US is alone in removing regulatory barriers to ISPs taking a piece of the pie. US ISPs now have a self-regulatory regime for consumer rights on transparency, security and data breaches; but in the UK and EU, privacy advocates prefer enforceable rights
  • Free
    October 19, 2017

    Australian MVNOs are here to stay but…

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    Australian MVNOs have doubled their market share in the last seven years with BYO and non-contract mobile plans being the primary driver of Australian MVNOs’ success. While MVNOs are still appealing to Australian consumers due to price advantage, new network technologies and rising competition from MNOs both new and incumbent are increasing the competitive intensity.
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  • October 16, 2017

    Consumer Magazine Publishing Part Two: The Power of Brands and In [...]

    In a challenging digital marketplace, publishers face a crisis of purpose. To navigate the turbulent seas, publishers must invest more in their brands and the industry as a whole must innovate. Consumer engagement, previously held by magazines, has sailed to social media where young influencers across Instagram, YouTube and Snapchat challenge established norms of content discovery and curation. Magazines are more heterogeneous than is commonly assumed, and strength lies in a distinctive brand. To right the course, we recommend the industry carry out bespoke reviews that outline brand-specific audiences, use-cases and revenue solutions, and exploit systematic audience data to optimise all brand manifestations - with enhanced marketing income a secondary benefit.

  • October 6, 2017

    European mobile in Q2 2017

    European mobile service revenue growth witnessed a rare growth spike this quarter with growth rising to 0.5%, likely due in large part to the reduced impact this quarter from the European roaming cut regulation, but also helped by a slight softening of MTR cuts and continued ‘more-for-more’ price increases. In the upcoming September quarter this roaming regulation holiday will end and the full impact of ‘free roaming’ will be felt, with the impact intensified by the quarter containing the main summer holiday season, thus the spike in mobile service revenue growth is likely to more-than-reverse. ‘Worry free’ data has always had consumer appeal, but it appears to have also reached operator appeal given its improved economics, and given its reported success at improving ARPUs we expect zero-rated launches to continue

  • October 5, 2017

    New Zealand Mobile Market Outlook

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    Challenging times driven by increasing competitive intensity, rising data usage and transitioning to new network technologies
  • October 4, 2017

    UK Mobile Market Q2 2017

    Mobile service revenue growth continued to improve on a reported basis, rising to 1.1% from 0.3% in the March quarter, but most of this improvement came from a significant dip in the MTR cut drag, with underlying growth improving by a much more modest 0.2ppts. The quarter also benefited from the current round of in-contract price increases, which were more widespread and at a higher level than last year, and also from a brief holiday in the impact of roaming cut regulation, with the full abolition of retail charges only being implemented on 15 June, too late to have a major impact in the current quarter. Looking forward, the roaming regulation holiday will end with a jolt in the September quarter, with a full three months of zero retail roaming charges coinciding with the main holiday season for mobile consumers, which could impact market growth by up to 2ppts by our (tentative) estimates
  • Mounting risks to marketing effectiveness
    Mounting risks to marketing effectiveness
    September 8, 2017

    Internet Trends H1 2017: Fruits of the mobile revolution

    With smartphones in the pockets of 3/4 of the UK population, and accounting for over half of all online minutes, the mobile revolution is in its final stages, allowing us to survey its impact. As the number of social media users continues growing, untapped older demographics and Instagram help the Facebook suite of apps grow in the UK, but Snapchat is the social media app of choice for UK teens. News publishers face issues with brand attribution as social media platforms overtake search as the main news aggregators online, while small UK video publishers have become unlikely winners in a global market for soft news, infotainment and gags that dominate social video
  • August 16, 2017

    Virgin Media Q2 2017 results: Mixed quarter, but still the faste [...]

    Virgin Media’s subscriber figures in Q2 were a little mixed, with total homes and broadband figures weaker than a year earlier, but pay TV much stronger. ARPU growth fell though, largely due to price increase timing effects, leading to a modest dip in revenue growth. Project Lightning premises passed during the quarter rose to 127k, making at least some progress towards upping its run-rate after changing its roll-out management team and approach, the company declined to give indications of how this will evolve. The broader market context is still one of slowing broadband volume growth, and Virgin Media continues to take market share, being the fastest growing of the ‘big 4’ in both subscriber and RGU volumes
  • August 9, 2017

    BT Q1 2017/18 results: Back to growth (for now at least)

    BT Group revenue returned to growth, at least temporarily, helped by overlapping price rises in consumer, one-off regulated price cuts on leased lines annualising out, and mobile handset sales improving. Regulatory news was unusually positive, with Openreach taking the initiative on FTTP, and BT winning an appeal against damaging leased line regulation, which may end up being significantly eased. BT continues to do well in consumer and struggle in business markets, with the ongoing deceleration in the consumer broadband market the main cloud on the horizon.
  • July 31, 2017

    Vodafone Q1 2017/18 results: Broadly flat, but promising signs

    Vodafone Europe’s revenue growth bounced back from a weak previous quarter, but its top 4 markets combined were broadly flat in underlying terms. There are nonetheless promising underlying signs, including reduced churn, (slowly) improving subscriber growth and steady NPS. Vodafone has launched all-you-can-eat social/music/video bundles under the ‘Vodafone Pass’ moniker in several markets, which appear both popular and ARPU-enhancing, and being early to market with such an innovation is laudable. Next quarter Vodafone will be hit by the full force of the EU roaming regulation, but excluding this factor the performance is likely to be steady at least, helped in part by the UK business recovering from its recent weaknesses