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  • New
    December 13, 2019

    UK broadband, telephony and pay TV trends Q3 2019: Darkest before [...]

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    Market revenue growth fell in Q3 to below 1%, and may drop below zero next quarter as existing customer pricing comes under more pressure. New customer pricing is however rising, and average pricing should rise much further as ultrafast increases in availability and popularity. Political enthusiasm for full fibre should be welcomed, although some specific plans are likely to do more harm than good if implemented literally
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  • New
    December 12, 2019

    Australia fixed broadband pricing trends – price differentials [...]

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    Broadband services are critical enablers for access to information, employment, markets and key services. Consumer demand for broadband services has grown rapidly in the last decade with household penetration increasing to 85% in 2017 compared to 64% in 2009. This report analyses the competitive environment in the fixed broadband market and focuses on consumer price trends in the fixed broadband market for the NBN. In particular, we analyse the major RSPs – Telstra, Optus, TPG and Aussie Broadband to evaluate their broadband offerings in the retail market.

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  • New
    December 11, 2019

    UK mobile market Q3 2019: Weathering the storm

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    The UK mobile market suffered its worst performance in six years this quarter as competition heated up and regulation continued to bite. Vodafone’s unlimited tariffs have proven popular, reaching 5% of its contract base in one quarter, helping to drive its outperformance. Some reprieve is in prospect next quarter, before the impact of out-of-contract notifications and automatic discounts from February, although there is the possibility of pre-emptive moves bringing some of the effects forward
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  • December 4, 2019

    Virgin Media UK: challenging quarter, but opportunities ahead

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    Virgin Media had a challenging quarter, with its early price rise driving weak subscriber figures and product spin-down, resulting in reduced revenue growth and an accelerated OCF decline. The market environment remains challenging with very competitive pricing on superfast and little push for ultrafast, but superfast pricing is easing and competitors’ ultrafast pushes should accelerate in 2020. Full fibre roll-outs remain a threat and an opportunity in almost equal measure, with Virgin Media’s positioning likely to be clarified as the regulatory mist clears over the next year

  • December 3, 2019

    TalkTalk UK: A discount brand pushing a premium product

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    TalkTalk enjoyed impressive EBITDA growth of 14% in H1 19/20, despite revenue growth pitching down sharply in Q2, and gross margin falling due to the rapid adoption of high speed broadband. The fall in costs was driven by a combination of good expense control and lower subscriber acquisition costs, in part due to improved efficiency, but in part due to a falling subscriber base, which is not a sustainable route to earnings growth. While the current dynamics are challenging, market prices have been firming recently, and should firm further as ultrafast becomes more popular, but TalkTalk needs to move to a more premium pricing position to take full advantage

  • December 2, 2019

    Champions League senses end of growth cycle

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    With pay-TV competition faltering, UEFA is aiming to stimulate demand for 2021-24 TV rights with early auctions, a possible relaunch of FTA broadcasts, and even, unrealistically, by considering an online service of its own. In the recently completed UK auction, facing no major threat from Sky, BT kept the rights at an almost flat price – probably missing a cost saving opportunity. In the upcoming auctions on the Continent, with former buyers such as SFR, Mediaset and Vodafone having cut back on premium sports, the major platforms’ bids will probably be unchallenged

  • 5G Cover
    5G Cover
    December 2, 2019

    Telstra FY19 Investor Day – InfraCo, Enterprise and 5G to remai [...]

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    Telstra held is annual Investor Day event on 27th November 2019. Telstra CEO Andy Penn and senior management covered off progress on its T22 strategy, financial and earnings outlook, changing dynamics in the Enterprise market, progress on the 5G rollout, entry into gaming and changes to InfraCo. In this report, we have analysed some of the key announcements from the event and provided our take on the same.
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  • November 26, 2019

    Turnaround still elusive at Vodafone Europe

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    Vodafone continues to strike a very shareholder-friendly focus and tone but its operating performance remains decidedly muted, with revenue growth up just a touch but EBITDA growth halved. Vodafone’s drive for convergence is still costing it dearly. German mobile ARPU is down 7% and Liberty Global’s assets disappointed on their first consolidation with cashflow enhancement less than half that expected. Apart from its ill-advised convergence strategy, Vodafone is making many sensible moves and there are indications that its unlimited plans are gaining traction. With leverage tight, pressure is mounting for demonstrable improvements in the financials some time very soon.

  • November 25, 2019

    Sky UK Q3 2019 results: balanced, but more to come?

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    While Sky’s overall revenues continue to rise, Q3’s growth was hampered by a significant fall in advertising revenue and to a lesser extent a slowdown in content sales. Underlying EBITDA growth was in the mid-teens. Next quarter, Sky will continue to benefit from lower Premier League rights costs versus last season, and profit appears on track to meet full year guidance. Q3 saw a rare decline in Sky’s total number of customers due to the conclusion of Game of Thrones. Sky clearly understands the value of unique content—recently extending its HBO deal. In our view, this was essential, since without a distribution deal for Disney+ (launching in the UK in March) Sky would lose Disney’s alluring content.

  • November 18, 2019

    O2 UK doing better than appears in tough times

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    In spite of total revenue growth of 4%, O2’s service revenue growth took another step down to -3% this quarter, consistent with the worsening environment and EE’s results. Its true performance is likely better than reported as IFRS15 has an artificially dampening effect on its service revenue as a consequence of O2’s Custom Plans, and is something of a boost to its impressive 6% EBITDA growth. O2 needs to continue to pedal hard to keep ahead of this challenging environment – with little let-up on the regulatory front, more aggression from Vodafone and H3G, and a potential regulatory hit to its Custom Plans
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  • November 13, 2019

    NEXTDC FY19 update: growing fast with the market

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    On 30th October 2019, NEXTDC had its 9th Annual General Meeting. The Australian DC market remains competitive and given the demand most of the DC providers are expected to grow fast. NEXTDC is counting on high growth rate of demand for hyperscale data centres and is clear about its trajectory
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  • November 11, 2019

    UK’s BT: Bumps on the road to recovery

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    BT suffered a weak Q2 with revenue and (particularly) EBITDA declines accelerating, but this was mainly down to timing (particularly at Openreach, which will likely recover in Q3), with the company confident in maintaining full year expectations. BT’s fixed broadband business enjoyed some recovery as the pricing environment improves, but will suffer another price timing bump next quarter, and its mobile business is suffering from a tough market environment that is unlikely to improve in the short term. The company is busy re-branding, re-positioning and transforming, but the outlook for football rights costs and fibre roll-out regulation will dominate in the short term, and further bumps (such as the Virgin MVNO contract loss) may emerge.
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  • November 6, 2019

    Champions League rights auction: BT’s cost-cutting opportunity

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    Champions League UK TV rights, at £394m/season, appear to have reached a ceiling, with costs on a per match basis now comparable to the more-desirable Premier League. In the imminent auction, current rightsholder BT is the clear frontrunner. Potential competitors appear reluctant: Sky Sports has thrived since losing the rights in 2015, and no other players can reasonably compete at this spend. This presents BT with a golden opportunity to rein in costs, with a view to moving BT Sport towards breakeven at an important time for the wider business, considering the financial pressure it is facing

  • November 4, 2019

    Peak football revenues and post-boom scenarios

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    Broadcast licensing revenues for football are likely to be ex-growth in the top five markets in Europe, with some limited upside from sponsorship and out-of-Europe rights. The broadcast revenue boom stoked the rise of super clubs with global fan bases, feeding player transfer valuations, and a potential downturn of the latter could magnify the impact of the revenue decline. The leagues in Italy, France and Spain are more exposed to the risks of broadcast licensing revenue decline, while the Premier League’s model looks robust

  • October 31, 2019

    Australian MVNO Market Overview

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    On 29th October 2019, Venture Insights presented their views on the Australian MVNO market at Telstra Wholesale’s Business Connect conference in Sydney.Global MVNO market size is expected to nearly double between 2018 to 2025, growing at CAGR of about 8%.The Australian MVNO market has grown from 1.5m subscribers in 2010 to 3.2m subscribers in 2018. MVNO subscribers have grown at a CAGR of 10% (2011-18) compared with MNO handset subscribers which have grown at a CAGR of 0.9%. However, MVNOs have over 20% in metro areas – demonstrating continued market focus on pricing. In addition, our survey results showed strong future demand for MVNOs. ~40% of metro respondents who were considering shifting, indicating they would select a MVNO. As such, we expect MVNO subscriber market share to continue to rise especially in metro areas. With a focus on niche segments or linkages to strong brands, the test of most MVNOs is (i) how well they know their target customers, (ii) what other services could be bundled and (iii) are there new market segments to target.
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  • October 23, 2019

    UK Telecoms sector returns: Money’s too tight to mention

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    Mobile sector returns are low, particularly for smaller-scale operators, with H3G earning less than its cost of capital. Regulatory initiatives, spectrum auctions and 5G look set to worsen this picture as H3G strives to gain viable scale. Back-book pricing is crucial to the returns of fixed challengers. Regulatory intervention is likely to lead to a waterbed effect in the fixed sector and exacerbate challenges in mobile. New entrant business case in full fibre is limited to de facto monopoly opportunities. There is the potential for BT’s returns to increase markedly if it gets full fibre right but new entrants’ inferior economics are unlikely to offer sufficient investor appeal
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  • 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.