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  • UK mobile market Q4 2016 – Nearly back to growth
    UK mobile market Q4 2016 – Nearly back to growth
    April 21, 2017

    UK mobile market Q4 2016 – Nearly back to growth

    UK mobile service revenue growth was -0.1% in Q4, a 0.6ppt improvement from the previous quarter. This was helped by some modest price firming, continued strong data growth, and some inflation in handset prices. In the shorter term, the outlook for market service revenue growth is fairly positive, with ARPU-enhancing pricing moves in evidence, supported by continuing strong data volume growth, and existing customer price increases due to take effect from Q2 2017.

  • Slides for Media & Telecoms: 2017 & Beyond Conference
    Slides for Media & Telecoms: 2017 & Beyond Conference
    April 19, 2017

    Slides for Media & Telecoms: 2017 & Beyond Conference

    Slides from the presentations by the following speakers at the Media & Telecoms: 2017 and Beyond conference on 2 March 2017: Tom Mockridge, Virgin Media; Frank Sixt, Hutchison; Andrew Griffith, Sky; Geoff Austin, Moelis & Company; Mike Darcey, News UK; Matthew Kirk, Vodafone.
  • Slides for Media & Telecoms: 2017 & Beyond Conference
    Slides for Media & Telecoms: 2017 & Beyond Conference
    April 19, 2017

    Media & Telecoms: 2017 & Beyond Conference transcript

    Enders Analysis co-hosted the annual Media & Telecoms 2017 & Beyond conference in conjunction with Deloitte, Moelis & Company, Linklaters and LionTree, in London on 2 March 2017. The day saw over 450 senior attendees come together to listen to 30 leaders and senior executives of some of the most creative and innovative businesses in the media and telecoms sector, and was chaired by David Abraham.

  • European mobile in Q4 2016
    European mobile in Q4 2016
    April 19, 2017

    European mobile in Q4 2016

    European mobile service revenue growth was unchanged in Q4 on the previous quarter at -0.1%, tantalisingly close to growth but just held back by renewed mobile termination rate cuts in Germany. ‘More-for-more’ tariff changes are becoming increasingly commonplace, as operators increase data bundle sizes to allow for volume demand growth, but nudge up pricing as partial compensation. This has not yet translated into positive revenue growth across Europe as a whole, but increasingly looks like it will do, with a number of moves made in early 2017.
  • April 12, 2017

    French election: High tide of populism receding?

    France’s first round of the presidential election on 23 April looks set to deliver a run-off on 6 May between nationalist Marine Le Pen and pro-EU, pro-NATO reformer Emmanuel Macron, who holds a 20 point lead in that contest – a much higher margin than last year’s mistaken projections for Clinton and Remain Should Mr. Macron become president and win a majority in the June parliamentary elections, a challenge for nascent party En Marche!, his reformist platform would tackle France’s main economic issue: low employment. The anticipated privatisation of Orange could launch a burst of media and telecom M&A
  • April 6, 2017

    Article 50 triggers Brexit in 2019

    The UK intends to exit the EU on 29 March 2019 and will submit the hoped-for agreement on a new strategic partnership with the EU to a vote in Parliament. The EU and the UK agree to seek an early settlement on the rights of 4 million nationals and the Irish border. Incentives diverge on the size of the UK’s Brexit bill. Unless a withdrawal agreement is reached, the EU will balk at starting talks on the UK’s desired free trade agreement (FTA), making a hard Brexit more likely than not.
  • March 22, 2017

    360 and Virtual Reality: a new angle for video entertainment

    The temporary cool-off in hype around VR following a very buzzy 2016 is not reducing the flow of investment and talent into the industry, notably in video production utilising 360Video technology; setting the stage for the development of a truly new entertainment medium. Fully immersive interactive worlds will continue to be the mainstay of the video games industry, while video entertainment will exist in a multi-track environment, with some genres (news, documentaries , natural history) making 360Video mainstream well before long-form narrative-driven entertainment. 2017 will still be a challenging year for consumer device VR roll-out and mass market adoption; Oculus, Google, and Sony continue to seed the market, providing large scale funding and equipment directly to developers and content producers.

  • TV platform forecasts to 2026: DTT and pay-lite set to grow
    TV platform forecasts to 2026: DTT and pay-lite set to grow
    March 8, 2017

    The connected evolution of UK TV platforms

    The past 14 months have seen a flurry of activity from the major UK television platforms, with all but one releasing a revamped version of their television offering; a neccessary reaction to the rise of VOD consumption and the threat this poses to traditional models. The result is 'connected' offerings, with the major players aiming to exploit the impact of this technology by seamlessly integrating on-demand capabilities, and in doing so mitigate the further shockwaves resulting from its emergence. No offering is likely to single-handedly alter the current subscriber landscape radically; with the pay platforms' each taking a unique—and to a degree—entrenched path that affirms its core consumer base, the greatest shifting of sands will likely come from changes in consumer trends or content quality.

  • February 28, 2017

    ComCom says no to ‘Skodafone’ – What now?

    The proposed merger of Sky TV and Vodafone in New Zealand was rejected by the Commerce Commission on 23rd February 2017. We discuss the reasoning behind this decision as well as the wider implications for Sky TV, Vodafone and the industry.
  • February 24, 2017

    Virgin Media Q4 2016 results: Accelerated build, delayed benefits

    Virgin Media successfully ramped up its network extension in Q4, passing more than double the homes in the previous quarter, and above the rate required to meet 2017 expectations. Net customer additions were, however, relatively weak, entirely due to extra churn caused by the price increase implemented in the quarter. The price increase’s effect on ARPU and revenue growth was muted by ARPU discounting for new customers, leaving revenue growth broadly unchanged. Subscriber growth has already improved in early 2017, and is likely to continue to improve through the year. The discounted ARPU impact will be more sustained, but robust revenue growth is still likely throughout the year.
  • February 9, 2017

    Vodafone Q3 2016/17 results: Modest slowdown

    Vodafone Europe’s mobile service revenue growth worsened to -0.6% from -0.2% in the previous quarter, the first deterioration following at least nine quarters of consecutive improvement, with the UK particularly weak. The company could nonetheless grow profits handsomely if revenue growth stabilises at this level, with more clarity on the medium term prospects for this likely to come with next quarter’s results and guidance for 2017/18. Our main concern continues to be the company’s declining subscriber share, particularly in consolidating markets where its historic advantages of having high market share may be rapidly eroded.

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  • February 7, 2017

    TalkTalk Group Q3 2016/17 results: Weak quarter, reassuring guida [...]

    TalkTalk had a weak quarter, as was pre-warned, with the decline in the broadband base accelerating and consumer revenue growth of -6% slightly worse than the previous quarter. Guidance was however very bullish, with the company confident that it can bounce back to return to positive net adds in the March quarter, while still hitting its profitability guidance. This looks a difficult task in a market which is still highly competitive, but if it can achieve it, the longer term aim of a stable customer base and growing revenue and profits looks much more plausible.
  • February 3, 2017

    Sky on track: H1 2017 results

    Sky H1 2017 results are broadly in line with company guidance on revenues, costs and synergies given at the 2016 Investor Day. The core focus since the formation of European Sky in November 2014 has been investment for growth in all sectors of the business (i.e. retail products, content offers and customer service), an approach that is beginning to bear fruit. Sky Italy had a notably “excellent” start to the year. Most eye-catching in the results release was the planned launch in fiscal 2018 of an IP alternative to Sky’s DTH service. That speaks volumes about the know-how Sky has accumulated over the last ten years in meeting customer demands and building customer relationships.

  • February 1, 2017

    BT Q3 2016/17 results: Strong core, let down elsewhere

    BT had a solid enough quarter, with revenue and EBITDA growth dipping due to pre-warned temporary factors, consumer continuing to outgrow business, and very solid operating trends evident, especially in high speed broadband and mobile. This has of course been entirely overshadowed by the profit warning, with prospective weaknesses in UK public sector and international corporate of far more concern than the contained, albeit surprising, accounting irregularities in Italy. BT has a large share of revenue and a much smaller share of profit from corporate/government data network/IT services, which are erratic in nature and arguably in long term decline in their current form, and without major changes they will continue to be so.

  • December 16, 2016

    UK broadband, telephony and pay TV trends Q3 2016: Peak growth?

    UK residential communications market revenue growth accelerated to 5.8% in Q3, from 5.0% in the previous quarter, helped by an overlapping price rise at BT, and supported by firm pricing and accelerating high speed adoption elsewhere. Volume growth in the core three products – broadband, line rental and pay TV – in contrast continues to slow, with little sign that this will ever re-accelerate. In the longer term we cannot see ARPU growth acceleration continuing to fully compensate, and market revenue growth might also have peaked. Virgin Media is putting extra pressure on the other operators through its network extension roll-out, broadband speed advantage and improving pay TV service. Sky and TalkTalk are becoming increasingly aggressive in marketing high speed broadband to help protect themselves (and perhaps also to boost ARPU), with Openreach’s high speed net adds being mostly derived outside BT’s retail divisions for the first time this quarter.
  • December 16, 2016

    TalkTalk Group Q2 2016/17 results: Growing profits, slowing reven [...]

    TalkTalk’s broadband subscriber decline has re-accelerated, with retail weaker than wholesale, and its consumer revenue is declining at 6%. This is partly due to price change timings, partly due to last year’s cyber-attack, but also partly due to underlying weak retail broadband subscriber growth. EBITDA did grow strongly, although this was in part due to less subscriber growth. The new pricing plans will likely drive more short term revenue weakness, but could potentially drive lower churn in the medium term, and they have renewed TalkTalk’s price competitiveness, particularly on high speed products.

  • The Internet of All Things - Towards the Hyper-connected World
    The Internet of All Things - Towards the Hyper-connected World
    December 6, 2016

    The Internet of All Things – Towards the Hyper-connected Wo [...]

    The Internet of Things offers enormous opportunities for Australian organisations to be pioneers in the convergence of operational and information technology. Many organisations across different industries are now realising value in a hyper-connected world. We discuss the nature of the Internet of Things, the current and future adoption rates amongst both consumers and industries, the challenges and issues associated with device uptake as well as the future of the Internet of Things.
  • December 2, 2016

    Brexit impact on UK-EU trade in creative services

    Brexit poses direct risks to exports to the Continent of regulated services, such as audiovisual (AV) media services, if the UK ceases to qualify for the Single Market. Since 1994, the EU has formalised a ‘cultural exception’ in the World Trade Organisation (WTO) and in all trade agreements aside from the European Economic Area (EEA). Many countries have emulated the policy since, making it challenging for the UK’s AV cluster to gain significant additional market access from future bilateral trade deals.

  • November 25, 2016

    SFR and the downsides of the LBO model

    France’s number two telecoms operator has suffered extensive damage since the 2014 takeover by Altice, which engaged in a slash-and-burn leveraged buy-out. Market share loss has triggered a revenue decline, with uncertainty of when this might stabilise. Increased investments will barely allow SFR to stand still in the competitive race for 4G and fibre deployment. Cash flow, while in decline, is sufficient to meet high debt payments – but rising bond yields could pressure P&L. SFR aims to appeal to subscribers through enlarged bundles of content sourced mainly from Altice investments in media, but execution seems geared to achieve VAT optimisation and augment the group’s political influence – which may be needed as massive job cuts are planned.

  • November 24, 2016

    Vodafone Q2 2016/17 results: Strong in parts

    Vodafone Europe has improved its mobile service revenue growth to near zero (-0.2%), and narrowed its revenue growth gap to competitors to a mere slither (0.2ppts), allowing it to return to significant EBITDA growth (3.1%). The primary driver for this was however ‘more-for-more’ price increases, which have been followed by competitors only in part, and it is still losing contract subscriber share across its major markets (with significant local variation). Its overall network performance statistics are flat, and customer NPS statistics are improving in some markets and worsening in others. Future outperformance is possible, but by no means guaranteed, and we believe that stabilising market share should be more of a priority than price rises.

  • The changing face of the data centre - Enabling digital transformation
    The changing face of the data centre - Enabling digital transformation
    November 16, 2016

    The changing face of the data centre – Enabling digital tra [...]

    Driven by digital disruption, service innovation is going into overdrive as global and local players compete for a share in Australia’s fast growing data centre market. As Australia’s appetite for everything digital grows, the role of the data centre undergoes transformation from a passive hub to an enabler of innovation. We discuss the key areas of growth within the data centre market and how they are likely to change amidst continual disruption.

  • November 10, 2016

    Virgin Media Q3 2016 results: Continued acceleration

    Virgin Media continued to accelerate in Q3, with subscriber numbers accelerating despite the broader market slowdown, driven by its network extension starting to have a material impact and an enhanced TV offering reversing its pay TV decline. The only weak area was mobile, with revenue and subscriber growth slowing, and convergence stalling. The company hopes that its 4G launch will reinvigorate this; we believe that consumer demand for fixed/mobile convergence remains limited. The early price rise implemented in November will likely help ARPU but harm churn during the rest of the year; for 2017 and beyond the accelerating network extension will increasingly drive volume and revenue growth.

  • The pace of consolidation continues — Superloop acquires BigAir
    The pace of consolidation continues — Superloop acquires BigAir
    October 17, 2016

    The pace of consolidation continues — Superloop acquires BigAir

    Superloop has acquired BigAir to create a wholesale and retail alternative to the nbn across corporate, campus, metro and regional markets in Australia with a merged entity enterprise value of around $500 million. We discuss the key drivers for the acquisition, the impact to the market and immediate outcomes following completion.

  • October 4, 2016

    Trade policy path to Brexit for the UK

    Brexit will take place in March 2019 and the rush is now on to complete the UK’s exit through Article 50 negotiations and set the framework for post-Brexit trade with the EU. Trade-related investment by companies is at high risk from uncertainty; a free-trade area (FTA) for manufactured products should be a priority for 2019. Barriers to trade in services in the EU are more nebulous than tariffs and far more political in Member States, justifying a Comprehensive Economic Partnership (CEP).