Telecom

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  • December 11, 2018

    5G Update December 2018 – Telstra leading the race to 5G

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    Q4 2018 has been a busy time for 5G players with the government auctioning valuable spectrum bands and an update on Telstra’s progress on 5G. Australia is tracking well to have initial 5G services in 2019. This will enable strong growth in devices and mobile data consumption.
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  • December 7, 2018

    Virgin Media UK Q3 2018 results: Cautiously accelerating growth

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    Virgin Media’s revenue growth accelerated in Q3, off the back of improved subscriber ARPU and triple play growth, but actual customer and broadband figures slowed in line with the weakening market. Network roll-out was still (deliberately) slow, with the rate now well below the previous year, and the company indicating that it is not expecting to accelerate, although it is still the fastest new network builder in the UK by some margin. Both the ARPU focus and slow roll-out point to a cautious approach, with the company happier to ensure its existing customers offer good yields than to seek significant market share growth at this stage, which is probably wise.
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  • December 6, 2018

    Refocus imperative at Vodafone UK

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    Vodafone’s deteriorating financial performance is as much due to an increasing margin of underperformance relative to its peers as to challenging markets such as Italy. A strategic refocus on operational performance is long overdue and seems largely sensible, save for the continued push for discount-led convergence products which are driving underperformance. Although Vodafone posted 3% organic EBITDA growth for H1 of this year and is guiding to same for the full year, we view this definition as overly flattering with true EBITDA performance flat and revenues in decline.        
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  • December 5, 2018

    TalkTalk stabilising, but strong growth evasive

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    TalkTalk had very solid Q2 and H1 results, with broadband net adds staying positive, high speed net adds accelerating, revenue growth above 3% and EBITDA rebounding back to growth. This was helped at the revenue line by a price increase in the quarter and in EBITDA terms by steep Openreach price reductions, with strong revenue growth and any EBITDA growth hard to replicate once these effects have annualised out. The company has nonetheless stabilised its subscriber base, revenue and profitability after some erratic years, with cost-cutting providing some potential for growth going forward.
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  • December 3, 2018

    O2 UK: scope for outperformance near-term, solid results thereaft [...]

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    O2 has managed to deliver a solid financial performance over the past several quarters in spite of network constraints which are now resolved. With signs that they are becoming more assertive in the market, and with continued brand strength and low churn, there is scope for that performance to hasten from here. Over the medium to long term, turnaround plans from the other MNOs could thwart outperformance by O2 but with an holistic culture of leading-edge marketing and innovation, we expect at least sustained solid results.
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  • November 30, 2018

    UK HFSS TV watershed idea should be put to bed

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    The ban on pre-9pm TV ads for HFSS (high in fat, salt or sugar) products being considered by the Government would not play a constructive or quantifiable role in reversing the UK’s rising childhood obesity rates. The ban on HFSS product ads since 2008 around children’s programming has not impeded the inexorable rise of childhood obesity. In 2010, Ofcom termed an HFSS watershed ban ‘disproportionate’ and ‘ineffective’. In 2018, a watershed ban would be even less effective. Children’s linear broadcast TV viewing is down by half since 2010, mainly to YouTube’s advantage, which benefits from light-touch HFSS regulation.
  • November 20, 2018

    BT Q2 2018/19 results: Beating expectations, guidance still look [...]

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    BT’s Q2 results were well ahead of both its full year guidance run-rate and financial market expectations, with revenue flat and EBITDA up 3% versus guidance and consensus at -2% for both metrics. Operating metrics were more mixed, with broadband churn high and (our estimate of) net adds low, but fixed ARPU was solid, backed up by rapid adoption of BT Plus, fibre adoption re-accelerated and mobile was strong across all metrics. While part of the outperformance was likely due to H1/H2 phasing, it also reflects fairly conservative expectations and a solid operating performance, and hence full year guidance still looks very beatable, with a positive outlook beyond this.
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  • November 19, 2018

    Australian Mobile Telco Market Outlook

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    The Australian mobile market has been traditionally characterised as a mature market with steady growth driven by population growth and mobile broadband. However, this market is about to see strong innovation (5G) and disruption (TPG-Vodafone merger) in the next few years. We forecast the mobile market will remain the largest segment in the overall telco market with A$22.3bn in revenue by 2022. With the merger between TPG and Vodafone to form a third full service telco in the market, we expect the competitive intensity to increase with incumbents facing pricing and margin pressure from 2018-19 onwards. However, despite TPG’s aggressive initial pricing and service offering, at this stage we have been conservative in our estimates with respect to TPG-Vodafone’s impact on incumbent market shares as we expect a gradual subscriber take-up of the network over 2018-2022. The arrival of 5G and emergence of wireless access to the Internet as an alternative to fixed broadband means that the mobile market will continue to experience strong growth, with ARPUs steadying. Venture Insights believes that 5G coupled with IoT will enable the transition from a connectivity based revenue model to a services based revenue model for mobile operators.
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  • November 16, 2018

    UK PSB SVOD

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    The Public Service Broadcasters (PSBs) have been mulling a possible SVOD service, a decade after their ad-supported Project Kangaroo was blocked on competition grounds. Even if a reboot between the BBC and ITV were this time to be approved, we do not think Kangaroo 2 can succeed as a significant SVOD entrant in its home turf of the UK, above all because it’s too late. Other flaws in the offer are that it would be too small, non-premium, too old (archive), and too old (viewing profile), plus lacking sufficient financial resource to produce a pipeline of unique series.
  • November 15, 2018

    UBS Australasia Conference – 5G’s accelerating progress

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    Venture Insights attended the annual UBS Investors Conference for 2018 on 12th and 13th November, with a number of interesting panels across the two days. The participants of the 5G panel moderated by Venture Insights commented on the positive effects 5G will have on not just the telco industry but also verticals such as healthcare, transportation and manufacturing.
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  • November 13, 2018

    Misplaced UK media spend in a booming identity economy: a brand o [...]

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    Most UK consumer spending, and the vast majority of its growth, is in categories which reflect who we are and where we feel we belong: lifestyle signifiers, passions, and social activities. Communities are at the heart of this growing economy, but ad spend on media which visibly targets us as members of a group in a relevant context has on average lagged behind in these categories. Advertisers recognising the power of emotionally and culturally relevant context in media, sponsorships or events, are finding an opportunity for building brands for the identity economy.
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  • November 12, 2018

    Radcomms 2018 & the upcoming 3.6GHz spectrum auctions

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    ACMA’s premier conference Radcomms 2018 was held on October 30-31 with industry experts presenting and discussing a range of topical issues regarding spectrum regulation, new emerging trends and industry policies. Australia’s spectrum regulation should be fast tracked to enable telcos to deploy next generation technologies faster to consumers. We expect strong competition for spectrum in the upcoming 3.6GHz auction.
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  • November 2, 2018

    UK PSB solidarity and collaboration

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    The Public Service Broadcasters (PSBs) are in the process of sliding from TV dominance to middling contenders, in terms of content expenditure and significance to viewers. There are calls from many sides that the PSBs need to collaborate in order to thrive, in an era when global debt-funded SVOD services are making all the running. This note explores what can realistically be achieved by PSB collaboration; where partnerships work best; and the areas best avoided.  
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  • November 1, 2018

    Australian Telecommunications Market Outlook

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    • The introduction and the rollout of the NBN has been one of the key inflection points in the Australian telco market. However, as the rollout progresses, complaints continue and the tug-of war with RSPs over CVC charges continues. This discord has led to both major and smaller RSPs experiencing a tight squeeze on margins and opportunities for bypass options
    • The Mobile segment continues its upward march but the market is about to see the impacts of a new wave of innovation (5G, IoT) and disruption (TPG Vodafone merger) in the next few years. This will severely impact fixed line broadband and nbn’s business case
    • The merger between TPG and Vodafone will create a strong third MNO in Australia and long term competition and pricing pressure with Optus and Telstra
    • Growth and broader acceptance in public cloud solutions is driving growth in the data markets as the corporate market is increasingly consolidating their voice, data and applications traffic
  • October 22, 2018

    New Zealand consumer interest growing for 5G mobile

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    Venture Insights’ latest New Zealand consumer mobile survey demonstrates growing 5G interest with video streaming and fixed wireless broadband shaping up to be key use cases. Leadership in 5G network rollout is likely to provide strong benefits from the acquisition of early adopters from competing networks.
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  • October 16, 2018

    Future Trends In Telecom and Video: Comms Day Melbourne Congress

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    On 10th October 2018, Venture Insight’s Managing Director Nigel Pugh, presented Venture’s recent Australian Mobile Survey results at the Comms Day Congress in Melbourne. The presentation includes Venture’s survey results and views on (i) consumer 5G awareness, migration and the battle for the early adopter market segment, (ii) consumer usage of mobile video and streaming services, (iii) 5G use case for mobile and telco media bundling, (iv) 5G use case for fixed wireless and (v) messaging usage versus traditional applications.
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  • Free
    October 13, 2018

    Venture Advisory Monthly Wrap – September 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
  • October 9, 2018

    The role of IoT in the Healthcare Industry

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    IoT is set to transform the healthcare industry enabling ease of data collection, analysis and bringing medical services into patients’ hands.. Advanced procedures and real time services can be made possible, improving efficiency and reducing redundant costs. However, there are many hurdles that need to be overcome for the IoT vision to be realised and will likely take many years.
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  • October 5, 2018

    Apple – Price is the object: the iPhone and its services

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    With a carefully priced, strong line-up of iPhones, Apple will consolidate its main revenue line and core user base in the near term. The latter feeds into a services business showing impressive growth, but which is also marked by missed opportunities and mounting negative consequences on the rest of the online ecosystem. For media businesses, Apple’s impact is larger than ever, inevitably leading to new kinds of friction around commercial terms, App store policies and browser features.
  • October 3, 2018

    What Sky means for Comcast

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    Comcast’s £30.6 billion acquisition of Sky brings to an end the long-running ownership battle since Disney agreed to tender Fox’s 39% stake to Comcast, also ending the Murdoch Family Trust’s interest in Sky. Comcast’s US domestic cable and global NBCU media businesses complement Sky’s European operation. Sky’s telecoms business is likely to expand, while the TV side should benefit from NBCU’s global distribution might, with greater revenues generated by its original content. Fox’s long-running battle with UK regulators over the public interest dimensions of the proposed Sky acquisition has also ended. Plurality of media is preserved by Comcast’s undertakings to support Sky News for 10 years.
  • September 27, 2018

    Mobile Video, 5G Adoption and Telco Media Strategies

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    Telcos, both globally and locally, have increasingly turned to media and content, in particular sports content, to provide diversification, differentiation and to turn around slowing growth in revenue and ARPUs. Venture Insights’ latest mobile survey shows strong interest in both 5G adoption and mobile video usage – indicating a clear consumer use case for 5G.
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  • September 19, 2018

    TPG FY18 earnings update: Steady, as merger approaches

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    On 18th September 2018, TPG announced its full FY18 financial results as an independent entity. Consumer performance has declined slightly, but TPG has extracted value out of its fibre assets in the corporate segment. Overall, the outlook for TPG is positive as it looks to utilise Vodafone’s mobile capabilities and branding to complement its own broadband strengths.
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  • September 18, 2018

    nbn Corporate Plan 2019 – challenging times ahead

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    nbn recently released its Corporate Plan 2019. Key performance targets were not met largely due to a delay in the HFC rollout, and as a result future forecasts were downgraded, and revenues deferred. As the rollout passes the halfway mark, nbn must focus on sustaining infrastructure quality, adopting a successful wholesale pricing strategy and address customer complaints issues.
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  • September 17, 2018

    UK Broadcast TV is growing very old, very quickly

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    UK mobile market service revenue grew by 1.7% in Q2, up from 1.3% in the previous quarter, a disappointing result in the context of boosts from both IFRS 15 accounting and the annual price rises in the quarter. O2 was the star performer this quarter, with its service revenue growth leaping ahead to claim the top spot. BT/EE’s service revenue growth declined on an underlying basis, with weak contract net adds over the last six months catching up with it, and H3G and Vodafone were slightly improved and steady respectively excluding some one-off effects. Next quarter, the impact from the EU roaming cuts will annualise out, providing a substantial fillip to all operators. Ceteris paribus, this would put market growth in the vicinity of 4%, a figure not reached for years.