February 6, 2015 Reports
TalkTalk’s revenue growth accelerated to over 4% in Q3, despite a tough comparative, with a price increase towards the end of the quarter and robust corporate revenue growth helping, giving it good momentum into 2015. Broadband net adds of 15k were unchanged on the previous quarter, disappointing given a broader market bounce, but the company expects acceleration next quarter. The company warned of lower than expected EBITDA margin in H2 2014/15, making its medium term 25% target look more challenging, but margins are still likely to improve going forward.
TalkTalk’s revenue growth accelerated to over 4% in Q3, despite a tough comparative, with a price increase towards the end of the [...]
February 6, 2015 Reports
Vodafone Europe’s service revenue growth continued to recover into its Q3, with the growth of -2.7% a further improvement of over 2ppts. This was largely driven by improved subscriber numbers, with contract ARPU in general still falling, although in the UK it notably returned to growth, with the pending consolidation bringing both threats and opportunities. Vodafone’s Project Spring investment appears to be bringing benefits before it is even halfway complete, boding well for its future impact.
Vodafone Europe’s service revenue growth continued to recover into its Q3, with the growth of -2.7% a further improvement of over [...]
February 3, 2015 Reports
BT Group revenue growth dropped to -1%, but entirely due to one-off factors, with its consumer division accelerating underlying growth and roughly maintaining broadband net adds share. Fibre net adds had a record quarter, driven by growth at Sky/TalkTalk et al, and BT is trialing the next generation of high speed broadband which could sustain profitable wholesale revenue growth for years to come. Upcoming developments over consolidation, quad play and sport rights are likely to continue to dominate the headlines, but it is growing capacity demand and BT’s ability to meet this that will drive BT’s long term value.
BT Group revenue growth dropped to -1%, but entirely due to one-off factors, with its consumer division accelerating underlying gro [...]
February 3, 2015 Reports
This Digital UK 2015 report is a collaborative effort by research partners Enders Analysis and EY. Encapsulating materials in the public domain and proprietary to the partners, it sets out to demonstrate the vibrancy of the UK’s digital economy and its potential for growth. Key UK strengths include: Rapid expansion of Next Generation Access (NGA) network coverage and 98% population coverage of 4G by the end of 2015 thanks to private and public investment. 45 million adult consumers on fixed line broadband and 45 million forecast to be using mobile broadband by 2020, thanks to the embrace of smartphones and tablets. Business e-commerce sales to consumers and other businesses of £556 billion in 2013, or 20% of non-financial business turnover, on a par with the US. The UK’s world-class digital infrastructure and its vast pool of smart connected consumers are unique strengths, and could be converted to leadership on the digital business models of the future. However, as important as the tech industry is to the future of the UK, the UK’s many existing businesses in other sectors could also aspire to be ‘fit for the digital age’. This will not only drive value for UK businesses, but if pursued energetically, it will help resolve the UK’s productivity puzzle.
This Digital UK 2015 report is a collaborative effort by research partners Enders Analysis and EY. Encapsulating materials in the p [...]
January 29, 2015 Reports
Ofcom anticipates opposing the use of core DTT spectrum for mobile broadband at WRC-15 in November in recognition of the importance of broadcasting. Assuming the aligned UK and wider European position prevails at WRC-15, DTT spectrum will be exclusive to broadcast until 2030, providing certainty for broadcasters and programme makers to enable ongoing investment in the platform. However, there will be continued pushback from the mobile network operators to expand the spectrum made available to mobile broadband earlier, and broadcast will need to remain as vibrant and competitive as it is today.
Ofcom anticipates opposing the use of core DTT spectrum for mobile broadband at WRC-15 in November in recognition of the importance [...]
January 28, 2015 Reports
Customer movement between operators shows susceptibility to dynamism in branding; O2 are picking up the majority of EE churners as customers move to the new “cool brand” while EE pull in Vodafone churners tempted by the new “best network”. O2 have the lowest churn though the lion’s share move to Vodafone and H3G churners are more evenly picked up by the other three. Customer perceptions of own operator network quality are high among the big 3 with no less than 75% of customers reporting theirs is the best network. O2 is the best regarded while H3G is the least best regarded highlighting a stark contrast between the (prospective) merging parties. Consumers report little interest in quad play and indeed operators in the both fixed and mobile markets have publicly confirmed the same from other market research. However the arrival of converged players in the form of a merged BT/EE or Vodafone re-entering the fixed space will see operators seeking to change this.
Customer movement between operators shows susceptibility to dynamism in branding; O2 are picking up the majority of EE churners as [...]
January 27, 2015 Reports
The posited deal merging H3G and O2 would create a new largest UK mobile operator with 40% market share, with massive synergy benefits available from cutting overlapping network and operations costs. Regulatory hurdles would be very significant, and the remedies required may well counteract the benefits of reduced network operator competition, as they will be designed to do. For Vodafone and EE, the impact will be mixed; a potentially aggressive competitor is removed, but their preferred positioning as being the best mobile networks is under threat.
The posited deal merging H3G and O2 would create a new largest UK mobile operator with 40% market share, with massive synergy benef [...]
January 26, 2015 Reports
In marked contrast to its Q3 2014 results release, Netflix reported a strong Q4 with respect to paid subscriptions that was ahead of company guidance and consensus expectations. The positive news about subscriber numbers, which saw a sharp jump in share price immediately after the results, was heavily reinforced by Netflix’s announcement of its aim to expand its global base from 50 to 200 countries over the next two years and generate a material profit from 2017.
In marked contrast to its Q3 2014 results release, Netflix reported a strong Q4 with respect to paid subscriptions that was ahead o [...]
January 16, 2015 Reports
Ofcom has decided to implement a fibre margin squeeze test on BT, starting in March, which will include the costs of BT Sport as part of the calculation. Ofcom has stated that on its preliminary figures, BT does currently pass the test, but given earlier statements we conclude that it does not have a lot of headroom. This will make it challenging for BT to absorb the extra costs for its Champions League rights hitting from July without breaching the test, and even harder to absorb an increased cost for Premier League rights, reducing its incentive to bid aggressively in the upcoming auction.
Ofcom has decided to implement a fibre margin squeeze test on BT, starting in March, which will include the costs of BT Sport as pa [...]
December 17, 2014 Reports
Underpinned by a legislative regime since the 1970s designed to prevent sex discrimination and unequal pay between men and women, the UK has enjoyed successive and ever bigger waves of young women gaining the education and skills to enter the work force as professionals, now standing at 5 million strong. The UK also boasts 1 million female-led companies and the digital age has greatly expanded the opportunity for entrepreneurship for women to be their own bosses. The workplace inflicts a stiff ‘motherhood penalty’ that produces a yawning gender pay gap for women in their 40s and 50s as men more readily gain access to managerial and executive positions, radiating from there to board positions, where Lord Davies’ initiative for FTSE companies has led some to endorse the merit of a diversity of directors on boards. On the whole, however, employers often overlook the potential to optimise talent management practices to accommodate maternity and support the work-life balance of employees, prevent sexism and unequal pay, and offer women an equality of opportunity to accede to top jobs. Companies that do so could be more likely to establish a lasting competitive advantage and the UK economy will gain too from releasing the talent and energy of women at work.
Underpinned by a legislative regime since the 1970s designed to prevent sex discrimination and unequa [...]