Telecom

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  • September 5, 2018

    High 5G consumer interest keeps pressure on network rollout

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    Operator positioning for 5G network plans in Australia and New Zealand continues to pick up pace – as Venture Insights’ latest consumer mobile survey demonstrates strong interest from Australian consumers. Leadership in 5G network rollout is likely to provide strong benefits from the acquisition of early adopters from competing networks.

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  • September 3, 2018

    UK Commercial TV impact trends: better than viewing trends, worse [...]

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    There has been no shortage of attention paid to declining TV viewing over recent years, but much of it focuses on overall viewing time rather than advertising delivery. This is to overlook the engine driving most of the UK’s television industry. Commercial impact delivery has held up well relative to overall viewing, and is strong for certain key demographics. Nonetheless there are generational and behavioural changes afoot which are exerting downward pressures on impacts, especially for younger audiences. An archipelago of Love Islands is needed (Stranger Things have happened).

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  • Free
    August 31, 2018

    Consumers lose while the market wins: TPG and Vodafone merger

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    TPG and Vodafone announced the merging of the two companies to form a third major telco which will challenge leaders Telstra and Optus. This move is positive news for the market as the likelihood of a mobile price war is expected to be reduced, stabilising ARPUs and margins.  

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  • August 30, 2018

    IoT in Transport – rise of the connected transport market

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    The Internet of Things is set to transform the transport industry by driving real-time connectivity between vehicles and transport infrastructure. In Australia, the transport IoT market is forecast to generate about A$5bn in revenue in the next five years.

  • August 29, 2018

    UK broadband, telephony and pay TV trends Q2 2018: Great volume, [...]

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    The UK broadband subscription market re-accelerated in the June quarter, bucking a consistent downwards trend that has been established for over three years, with line rental and pay TV subscriptions also accelerating having both also experienced a more general downwards shift over the last few years. The broadband acceleration may be short-lived, with line rental only a little more sustainable. Pay TV is perhaps the most robust recovery given that the over-the-top new entrants (primarily Netflix and Amazon) are now firmly establishing themselves as add-ons not substitutes.Revenue growth however took a more familiar path, dipping to 1.6% from 2.8% in  the previous quarter, as BT’s overlapping price increase predictably dropped out, partially mitigated by an improvement in ARPU growth at TalkTalk caused by an improved (i.e. slightly less damaging) mix effect.  
  • August 24, 2018

    Vocus FY18 earnings update: Focus on the business segment

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    On 22nd August 2018, Vocus announced its FY18 financial results. Despite revenue and EBITDA increasing slightly, net profit fell 16%. Its SMB product Commander posted a revenue decline of 15%. Vocus needs to take immediate action to make the most of its fixed asset opportunities, acquire larger market share in Enterprise in NSW and VIC, and focus on differentiated products that reduce its dependence on legacy solutions.

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  • August 20, 2018

    Virgin Media Q2 2018 results: Measured approach in a tough market

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    Virgin Media had a mixed quarter, with subscriber ARPU growth maintained, partly driven by a triple play focus with pay TV and telephony adds much improved, but subscriber and broadband net adds unchanged. Cable revenue growth did slow from 3.6% to 3.1%, mainly due to the previous quarter’s net adds slowdown working through, and it is still growing the fastest of the big operators in a slow-growth market that still suffers from pricing pressure at the low end. Its network roll-out was slower than last year and only just above the weather-impacted previous quarter, which appears to be deliberate, and which may at least partly relate to an uncertain regulatory and commercial climate over ‘full fibre’ roll-out by others.  
  • Free
    August 17, 2018

    Telstra FY18 earnings update: there’s a lot riding on 5G and Io [...]

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    On 16th August 2018, Telstra announced its FY18 earnings. While subscriber growth remained strong, it was not strong enough to offset ARPU declines. Telstra is betting its future on new initiatives (IoT) and network technologies (5G) to remain ahead in times of increasing competitive pressure in both fixed and mobile, however it faces competition from multiple other market participants.    
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  • August 14, 2018

    Down, but not out: Why there’s still life in terrestrial broadc [...]

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    Australian viewers are shifting irresistibly towards on-demand formats and IP-based video viewing. But is there still life in the terrestrial platform? And what does this mean for broadcasters and other industry participants? You could be forgiven for thinking that broadcast television is an anachronism, a relic of a time when audiences watched what was programmed, when it was programmed (more or less), and knew no better. Likewise, when every other headline lauds the benefits of online content delivery (though perhaps not so much at the moment given Optus’ recent World Cup travails – more on that later), it is surely a forgone conclusion that terrestrial broadcast is in terminal decline, following Blockbuster and Borders to the exits. However, our analysis suggests that while IP delivery is ascendant, there is still likely to be a significant and long-term role for terrestrial broadcast in Australia. In this report, we explore the factors driving the shift towards IP-based content delivery and argue why this shift does not spell the death of terrestrial broadcast, at least over the coming decade.Given this assessment, broadcasters and other industry participants need to carefully balance the expected ascendancy of IP with the potential longevity of the DTT platform as they place bets on the future of video entertainment.  
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  • August 9, 2018

    IoT Connectivity Technologies

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    The Internet of Things is becoming a pervasive part of our technology ecosystem. At its heart, communication and connectivity technologies enable IoT devices to interact and share information. There are a number of connectivity options available for IoT networks, each with specific characteristics which makes them suitable for specific applications and use cases.        
  • August 7, 2018

    BT Q1 2018/19 results: On target in the short term, making progre [...]

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    BT’s Q1 results were fairly robust given a number of one-offs hitting in the quarter, with revenue growth of -2% in line with full year guidance, EBITDA growth of 1% ahead of plan, and a number of metrics looking promising. Openreach’s newly announced volume discount plans offer advantages in growing high and higher speed volumes, infrastructure competitiveness and regulatory pricing pressure, while giving up little in external revenue, a win-win-win for BT at least. Full-fibre regulation appears to be slowly moving towards more clarity, but is still far too unclear to justify an accelerated investment, with critical issues being ducked (for now) by government and Ofcom alike.  
  • Free
    August 5, 2018

    Venture Advisory Monthly Wrap – July 2018

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    Venture Advisory provides a review of leading Australasian telco, media and technology companies on a monthly basis. This review considers amongst other things share price performers ( best and worst performers during the month), company news flow and ASX release updates and respective valuation trading multiples. The report is designed for busy executives and investment professionals that want to get a flash update and stay on top of key news flow.  If you wish to find out more or have an deeper enquiry please feel free to contact Nigel Pugh or Sarah Houghton.
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  • August 2, 2018

    Revenues down, guidance in the balance: Vodafone Q1 2018/19 resul [...]

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    EBITDA growth guidance of 1-5% is in question with group revenues flat to down. Counting AMAP growth in local currencies helps, as will cost control and roaming relief. Sustaining growth in Germany will be key; convergence-led ARPU declines could prove to be something Vodafone can’t afford. Vodafone’s UK business performed strongly in terms of mobile subscribers and fixed business financials, although revenue growth is still lacklustre. Profitability is expected to increase markedly, boosted 10ppts by roaming tariff relief. Although we view Iliad’s business model in Italy as unsustainable, it will nonetheless continue to put significant pressure on Vodafone Italy’s ARPU, which is almost three times that of Iliad’s package.  
  • August 1, 2018

    Hulu: Why Disney wants 21st Century Fox

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    Disney’s potential acquisition of certain 21st Century Fox assets is assuredly a play for further scale at a time when the company’s traditional domain, the family home, is increasingly welcoming services such as Netflix. The deal will consolidate Disney’s dominant film business. But also, the robustness of traditional television, especially 21CF’s cable interests, along with IP assets, will allow Disney to better control the inevitable viewer transition from linear to online and on-demand. Becoming the one media company with both a strong broadcast and online offering—the control of Hulu, a new Disney streaming service, ESPN+ and other add-on services—could grant Disney the ability to navigate the storm of change and dictate its own future.
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  • July 26, 2018

    The drive for convergence: a value-destructive strategy

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    Many European telecoms operators are pursuing a fixed/mobile convergence strategy on the pretext that the addition of mobile reduces churn. We see no evidence of churn reduction from this strategy. Discounts required to encourage take-up of fixed/mobile services are often value-destructive, even before competitor reaction: a 10% bundle discount necessitates a 2ppt improvement in churn to wash its face economically. M&A premia on the basis of convergence synergies raise the hurdle even higher. Most UK operators offer very limited discounts on fixed/mobile bundles for now, sensibly focusing on enhanced services. Vodafone is the most aggressive, albeit less so than it is elsewhere. All UK players should hope that it stays this way.
  • July 25, 2018

    Unlimited mobile data – not quite all you can eat…

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    Mobile data usage in Australia is expected to increase 6x between 2017 to 2021, driven by advances in mobile technologies, increasing time spent on larger screen smartphones and rising video streaming on mobile. Unlimited mobile data plans have finally made their way to Australian shores, as Telcos look to counter the impact of rising competitive intensity.  
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  • July 20, 2018

    Focus back on ARPU: TalkTalk Group Q1 2018/19 results

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    TalkTalk had another strong quarter for broadband net adds, adding 80k versus its full year target of 150k+. All of this was due to strong wholesale, with retail net adds slightly negative, although in the market and seasonal context even this retail performance is quite respectable. On-net revenue growth improved strongly to around 4%, with its ARPU decline moderating to 2%, and ARPU should be helped further by price increases for existing and new customers alike in July. TalkTalk therefore looks well placed to hit full year targets, albeit with considerable help from its wholesale customers and some aggressive price increases. The focus back onto ARPU and away from (expensively) chasing retail subscriber growth is nonetheless to be applauded.  
  • Free
    July 13, 2018

    5G Update July 2018 – auctions caps, potential vendor bans and [...]

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    Regulatory announcements regarding 5G will affect competition dynamics as the first 5G services are closer to launch. Internationally, there is excitement but also caution as the potential high price of providing 5G services will mean expected benefits such as unlimited mobile plans prove to be difficult to justify economically.
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  • July 12, 2018

    Virtual Reality in 2018: Ready Player None?

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    Yet another annual hype cycle in 2018 can’t hide a tepid consumer appetite for all VR platforms and heavy weather for the industry as a whole. The launch of Oculus GO, a standalone device at an attractive price, is a milestone for VR; nevertheless, even Facebook remains worried about reach and the state of the industry. Mobile AR is still a strategic focus for Google and Apple, producing diverse applications instead of just games, but new headsets from Microsoft and Magic Leap which promise advanced MR experiences have no launch dates.
  • Free
    July 5, 2018

    Venture Advisory Monthly Wrap – June 2018

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    Venture Advisory provides a review of leading Australasian telco, media and technology companies on a monthly basis. This review considers amongst other things share price performers ( best and worst performers during the month), company news flow and ASX release updates and respective valuation trading multiples. The report is designed for busy executives and investment professionals that want to get a flash update and stay on top of key news flow.  If you wish to find out more or have an deeper enquiry please feel free to contact Nigel Pugh or Sarah Houghton.
    $0.00
  • TV platform forecasts to 2026: DTT and pay-lite set to grow
    TV platform forecasts to 2026: DTT and pay-lite set to grow
    June 29, 2018

    Is CRR still critical to protect advertisers from ITV?

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    The workings of the TV advertising market are a mystery to most. Overlaying an arcane ‘share of broadcast spend’ trading mechanism is regulation in the form of CRR, which has prevented anti-competitive activity by ITV since 2003. CRR will protect advertisers ‘for as long as needed’. Most advertisers we canvassed believe it should stay in place, but the sell-side and auditors say CRR has passed its ‘Best before’ date and is heading towards its ‘Use by’ date. We propose a review of CRR by the Competition and Markets Authority (CMA) to determine whether it is now helping or hindering the TV advertising ecosystem to become fit-for-purpose for the digital age.
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  • June 28, 2018

    The home screen: distribution, discovery and data on connected TV [...]

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    The TV, the main screen in the house, is rapidly becoming connected to the internet, opening a new front in the battle for people's attention. Tech players, pay-TV operators, and manufacturers are all aiming to control the user interface, ad delivery and data collection, leaving incumbent broadcaster interests less well represented. To protect their position, and the principles of public service broadcasting, broadcasters will have to work with each other at home and in Europe to leverage their content and social importance.  
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  • June 27, 2018

    ‘Telstra 2022’ – the inevitable end game of Australia’s n [...]

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    Telstra has been on the path to structural separation ever since Senator Conroy came up with his plan for the nbn back in 2009. With its one-off nbn payments winding down, Telstra had no choice but to overhaul its business structure, structurally separate its assets & significantly reduce headcount. But this strategy comes with major implementation risk and any mis-steps could quickly negate the expected benefits.
  • June 26, 2018

    Sky finally renews Serie A rights until 2021

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    Italy’s top football league awarded Sky the broadcasting rights to seven games per week from August 2018 until May 2021 for €780 million per year, up €208 million. UK-based Perform will carry three games for €193 million. Mediaset exits the market, freeing Sky from price competition. Besides Serie A, Sky added Mediaset’s Hollywood series and films to its content line up in May and will include the Champions League from August. We expect costs to rise by up to €500 million per year, which could be recouped by cuts in content and by recruiting Mediaset subscribers, notably on Sky’s new DTT feed. The best model for Perform would be to wholesale its new DAZN service to Sky, but even if a deal is found we doubt it could break even within the rights cycle.
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