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  • New
    October 15, 2019

    Shared Infrastructure Models and O-RAN Vendor Disruption

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    With mobile network operators facing increased network spend and still defining incremental 5G revenue opportunities, Venture Insights believes it is time to look again at network sharing models. In particular we believe a focus on regional RAN sharing and small cells may be targets for either joint venture or neutral host players. Venture estimates that Government (States/Federal) and Industry spend at the end of round 6 of the blackspot program could be as high as $1.2B. Plus there is additional regional connectivity spending from states around Australia. Examples of blackspot funding for regional rail projects highlight the lack of benefits for all end customers from non-shared network projects versus shared. If Governments continue to heavily subsidise regional network coverage then they should consider the customer benefits of active RAN infrastructure sharing and the use of train repeaters to maximise investment outcomes. In addition, since these networks are capable of wireless and fixed wireless solutions, these network models should also consider the role of NBN.
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  • October 10, 2019

    UK BVOD advertising: on-demand in demand

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    Broadcaster video on demand (BVOD) advertising is in demand with an £89m rise in 2018 spend to £391m, and is predicted to double within the next six years. The rise of on-demand viewing has created a scaled advertising proposition with a strong 16-34 profile – a relief for both broadcasters and advertisers, given the long-term decline in linear TV impacts for younger audiences. Big challenges remain: linear TV ad loads look excessive in on-demand, BVOD CPTs can be off-puttingly high, and measurement is still unresolved. BVOD is a welcome bright spot which faces online video competition head-on, but it won’t be able to turn broadcasters’ fortunes around alone
  • September 23, 2019

    European mobile in Q2 2019: No real let-up

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    European mobile revenue trends are not yet improving. Italy is still flat-lining at almost -10%, Spain worsened again, and the UK deteriorated sharply. France is the only good news story. 5G rollouts seem somewhat tentative. Indications from the UK that it is leading to a more competitive environment may discourage European operators from exacerbating already challenging markets. Prior year comparables for Southern Europe will be more flattering in the second half of this year although a doubling in the drag from intra EU calls will dampen any recovery
  • September 19, 2019

    Use cases for AI in Telco: An era of mainstream adoption

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    Many tier 1 telcos have begun to implement AI initiatives to build and operate their network, sell more efficiently and improve the customer support experience. Based on our industry interviews, we expect increasing competitive intensity in the telco market to drive increased adoption of AI beyond the largest incumbents and into RSPs
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  • September 17, 2019

    Cut-price iPhones: Apple’s innovative approach

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    Apple’s iPhone launch event was relatively light on iPhone, which shared the stage with games, TV, Watch, iPad and retail announcements. This reflects Apple’s developing priorities: as iPhone sales soften, it needs to find new ways to extract value from the wealthy user base it has spent a decade nurturing. Apple has embraced this new strategy, offering a range of cheaper points of entry into its ecosystem, making the lost profits back on accessories or content subscriptions
  • September 9, 2019

    UK mobile market Q2 2019: Reality bites, and will bite some more

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    The UK mobile market suffered its worst performance in five years this quarter with Vodafone alone, somewhat inexplicably, bucking the trend.5G capacity is impacting pricing trends with SIM-only packages flattening and unlimited packages increasing in popularity and complexity.As the operators invest in solving rural coverage and rolling out 5G, they will continue to be hit by regulation. Out-of-contract notifications and discounts are next in a long series of assaults.
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  • September 6, 2019

    TPG FY19 update – there’s a lot riding on the merger…

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    On 5th September, TPG released its FY19 results. Reported profits plunged 56% to A$174mn in FY19 from A$396mn in FY18, with majority of the drop driven a write down of its spectrum assets. FY20 guidance indicates that TPG is preparing for further earnings pain with EBITDA expected to be in the A$735mn to A$750mn range, about 10% lower than FY19 EBITDA.
  • August 28, 2019

    Vocus: building their identity as an infrastructure business

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    On 22nd August, Vocus announced its FY19 earnings. While Vocus delivered on its FY19 guidance, the outlook for the next 2-3 years remains subdued as Vocus faces an uphill battle to turnaround its business. Competitive intensity will continue to remain high across the consumer and enterprise segments. Therefore, how Vocus develops its infrastructure business will remain crucial.  
  • August 22, 2019

    VHA and TPG need a Plan B

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    The ACCC has opposed the $15bn merger between TPG and VHA. In the ACCC’s view the proposed merger will reduce competition in mobile services as TPG would be precluded from becoming the fourth mobile operator. TPG has announced that it has ceased the rollout of its mobile network and will not become the fourth mobile operator. VHA now wants the Federal Court to find that the proposed merger is not anti-competitive, so the merger can proceed.
  • August 20, 2019

    Telstra FY19 earnings update: adjusting to a new normal…

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    On 15th August 2019, Telstra announced its FY19 earnings. Falling ARPUs and NBN related impacts outweighed subscriber gains resulting in earnings declines. The Australian telco market remains competitive with nearly all sub-segments experiencing varying degrees of pricing pressure. Telstra as the market leader is most at risk as competitors increase share across different segments.
  • August 19, 2019

    Virgin Media UK: subscribers fall but ARPU grows

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    Virgin Media’s results were quite mixed, with the subscriber base shrinking in a very slow market, but ARPU and revenue returning to growth despite pricing pressure and regulatory drags. The outlook remains challenging, but market pricing does seem to be easing with no repeat of the damaging Openreach price cuts on the horizon. ‘Full fibre’ roll-outs will bring further challenges, but opportunities as well, with the accompanying focus on higher speeds likely to be a significant operational upside in the short to medium term.
  • August 16, 2019

    Sky UK Q2 2019 results: strong subscriber growth and long-term in [...]

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    Sky’s Q2 results were encouraging overall, with significant subscriber growth swinging direct-to-consumer revenue growth back to positive. ARPU declined once more, since new streaming customers are taking lower-priced products, but total revenue growth accelerated to 2.4%. EBITDA rose 20%, primarily due to the dropping out of some large one-off costs. Next quarter, Sky will begin making savings on the new Premier League rights contract, and increased football rights costs in Italy and Germany will have annualised out. Having launched Sky Studios in June, Sky is focused on producing original European content, with ambitions to double spend over the next five years, in a calibrated response to the Netflix-led race for content.
  • August 15, 2019

    Finally, a long-term perspective – Infrastructure Australia [...]

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    Infrastructure Australia’s (IA) first audit in 2015 was the first national picture of Australia’s infrastructure challenges. IA’s second audit released in August 2019 seeks to identify challenges and opportunities across Australia’s transport, social infrastructure, energy, water and Telecommunications sectors. IA also considered the key future trends facing Australians as well as the direct views of infrastructure users across Australia.
  • August 14, 2019

    BT: Temporary problems, long-term promise

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    BT’s divisions had contrasting fortunes in Q1 2019/20, with Consumer revenue growth sharply turning negative but Openreach external revenue growth accelerating to 10%, leaving the Group level unchanged at -1% and EBITDA on course to meet guidance. Consumer was hit by several regulatory and pricing factors mainly affecting mobile, and the short-term outlook remains tough, with a number of legacy pricing issues across fixed and mobile still to be resolved. Openreach is reaping the benefit of previous price declines annualizing out, allowing it to take full advantage of higher speed demand, and due to its full fibre roll-out this dynamic could persevere for years.
  • August 9, 2019

    Optus 1QFY20 earnings update: 5G and Optus Sport will drive growt [...]

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    On 8th August 2019 Optus announced its 1QFY20 earnings. Revenues were up driven by mobile handset sales and NBN migration payments, in spite of a drop in mobile service revenues and continued weakness in the enterprise segment. 5G and Optus Sport remain the key growth areas going forward.
  • August 5, 2019

    Vodafone UK: some signs of life but an uncertain road to recovery

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    Vodafone’s newfound focus on performance improvement is showing signs of delivering – more on the cost than revenue side. Tower sharing has the potential to ultimately enhance European cashflow by 10%. The revenue picture is more mixed with churn improving but a very varied operational picture across its major European markets. Although Vodafone highlights the potential for German cable to drive growth post Liberty Global deal completion, their current 0.4% growth in Germany does not give cause for optimism
  • August 2, 2019

    O2 UK: Lower costs mitigate the challenging environment

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    O2’s service revenue growth slipped decisively into negative territory at -1.8% this quarter as the punishing regulatory regime took its toll. Underlying EBITDA growth of 4% was particularly impressive in the circumstances; likely aided by more direct distribution as well as tight cost control. The coming week will unveil how this compares to peers; we anticipate results which reflect a tough environment with little let-up on the horizon
  • July 25, 2019

    Australian MVNO market overview – no longer just about price

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    Australian MVNOs have reached a market share of 13% nationwide, as competitive MNO offerings now appeal to value conscious customers. New network technologies and the commoditised mobile industry are increasing the competitive intensity. Differentiation and cross selling will become increasingly important for MVNOs to build and retain market share
  • July 24, 2019

    TalkTalk UK Q1 2019/20 results: Slower but steadier

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    TalkTalk suffered subscriber losses and falling consumer revenue growth in Q1, with churn still high despite the high speed base growing, countered by ARPU growing for the first time since 2017. The subscriber drop was, however, modest and looks quite deliberate, with there being evidence of price firming in both direct and indirect channels supporting both ARPU and margin. This more cautious approach, if it can be sustained, puts the company on a much more healthy footing in our view, allowing it to achieve its financial targets without increasingly unsustainable existing customer price rises
  • July 17, 2019

    Monthly Australian TMT Wrap: June 2019

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    June was a relatively quiet month for Australian TMT space although few significant announcements.
  • July 5, 2019

    Vocus Strategy update: leverage fibre, subsea and mobile to build [...]

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    Vocus held its strategy day on 3rd July 2019, detailing its efforts to turning around its business units. Its core Network Services and Retail units require substantial investment to stimulate revenue and market share growth. Vocus has identified mobile and its subsea cable assets as key drivers for growth. After two unsuccessful merger attempts in the last month, Vocus needs to ensure it can transform the company.
  • June 27, 2019

    2019 UK TV advertising backstopped by Brexit

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    We expect total TV ad revenues to decline 3.3% in H1 2019, partly due to a return to Earth following the idyllic conditions of the World Cup in June 2018. Bad omens for advertising for H2 include the sagging economy since April and the Government’s impetus to achieve Brexit on 31 October, with or without a deal. Our forecast remains a 3% decline for total TV ad revenues for 2019 as a whole, with the risk of a more serious downturn in 2020 in the wake of Brexit.
  • June 25, 2019

    European mobile in Q1 2019: Toughest conditions in four years

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    European mobile service revenue growth slipped again to -2.0%; its worst performance in four years.Regulation limiting intra-EU call prices could hit hard next quarter – with the UK likely to be hardest hit by up to 6% of revenues and 20% of EBITDA. Excluding the EU-call impact, we see greatest scope for improving trends in Italy and France thanks to easier comps and diminishing competitive intensity.

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  • June 24, 2019

    Monthly Australian TMT Wrap: May 2019

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    May was another busy month for the telco sector with significant announcements on three major M&A deals in the market. Furthermore, M&A activity continued to be strong in May with several deals announced.