Format: Mar 2017
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Sector(s) Datesort ascending
Google UK Q1 results: feeling the squeeze

Google UK delivered solid performance in Q1, with gross revenues up about 8% YoY to £440 million; however, the huge growth of previous years has ended, due to a combination of recession and growing maturity in search

Key verticals (finance and travel) are being impacted by the downturn, but Google should continue to benefit from the secular shift of advertising to online and increasing advertiser focus on measureable ROI

We now estimate that Google’s UK gross revenues will rise by 4% this year to £1.66 billion, supported by volume growth in search, with little contribution from display and mobile still firmly rooted in the experimental phase

  • Google
Internet, Media 25 April 2009
Carphone Warehouse March quarter trading update and analyst day

In fixed line, net broadband additions for the quarter were strong at TalkTalk given a tough market, but remained firmly negative at AOL UK

We are sceptical of new guidance for fixed line for the year to March 2010, but still expect reasonable performance, given the slowdown in broadband market growth

The distribution business continued to defy the consumer downturn in volume terms, with 12% connections growth and a solid outlook for next year, although the pain is being felt at the margin level

  • TalkTalk
  • Carphone Warehouse
Telecoms, Fixed Line 22 April 2009
Digital Britain summit: talk is cheap

Friday’s Digital Britain summit generated more heat than light but nonetheless provided a useful forum for the articulation of the views of government and some other key players

There appears to remain a significant gap between government aspirations for a high speed broadband Britain and the commercial realities. All eyes are now on Wednesday’s Budget to see the extent to which the government is prepared to put its money where its mouth is

In online content, achieving an outcome that reduces piracy, avoids oligopoly and encourages continued innovation in content creation remains the key challenge for both industry and government

Telecoms, Media, Fixed Line 19 April 2009
Online classifieds: signs of recession


Confirmation of robust UK online classified growth in 2008 from IAB/PwC should not be interpreted as ‘business as usual’, with signs of severe turbulence emerging in the final months of the year for pro-cyclical activities like recruitment and property

Even online giants such as AutoTrader, Rightmove and Jobsite will be unable to offset the underlying collapse in their respective marketplaces in 2009, and we anticipate low levels of activity to persist into 2010 and potentially beyond

However, if the short-term prospects for online classifieds are less robust than many have assumed, the long-term consequences of the trends in classified will be devastating for local newspapers, with the shift in marketplace activities to national digital brands from the local press accelerating through the recession


Internet, Media 7 April 2009
UK pay-TV in 2009: recession and competition concerns

Leading pay-TV operators Sky and Virgin Media (VMed) have shown little sign of recessionary damage in 2008 and the outlook for Q1 2009 remains positive. Difficulties are apparent at complementary pay-TV service provider Setanta

Ofcom’s pay-TV investigation enters its final stages in 2009. Ofcom faces a formidable challenge to devise a workable wholesale must-offer solution for premium film and sports content that fosters competition across all platforms

With prospects fading fast of a VMed sale of its UKTV and possibly VMTV assets to a BBCW/Channel 4 joint venture, Discovery looks an increasingly suitable candidate, as competition concerns could arise if Sky was the chosen partner

  • Virgin Media
  • Sky
Media, TV 7 April 2009
NGA in Italy

This report concludes our series of country reports (France, Germany, the Netherlands, Spain and Sweden) on next generation access on the Continent

Although Italy boasts the largest FTTH network in Europe, it is the least propitious market for new NGA plans among those we have surveyed. Telecom Italia has no specific plans for NGA, precluded by its level of indebtedness, and neither does any of the altnets

Because Italy does not want to be ‘left behind’ on NGA, a public/private partnership dedicated to building local FTTH networks for wholesaling to service providers is likely to be created in the near future. Its initial focus is likely to be denser city centres, where broadband penetration is high, and pockets of demand for FTTH-based applications can be located

Fixed Line, Telecoms, Non-UK Telecoms 4 April 2009
Iliad’s 2008 results and prospects

Iliad, now France’s number two broadband provider, will increase total revenues by 10% per year by 2012, mainly by growing its subscriber base (rather than ARPU) in a market however rapidly reaching maturity

Excluding mobile, the EBITDA margin could rise by five percentage points to 40% in 2012, but a mobile launch in 2011 would pare the margin down to 32%

Funding both the fibre-to-the-home and the mobile network capex commitments could compress Iliad’s cumulative cash flow to just €168 million during 2009-2012, thus requiring new financing or a minority partner in the mobile venture

  • Iliad
Telecoms, Mobile, Fixed Line, Non-UK Telecoms 31 March 2009
UK broadband and telephony market Q4 2008

UK broadband subscriber growth continued to decline in Q4 2008 year-on-year. We expect declining growth throughout 2009, with the growth rate remaining positive, but in single figures

  • Sky
  • Orange
  • TalkTalk
  • Carphone Warehouse
  • Virgin Media
  • BT
Fixed Line, Telecoms 30 March 2009
Recession hits UK internet advertising

IAB/PwC released figures for 2008 showing that annual spending on internet advertising rose 19.1% to £3.35 billion, accounting for close to 20% of total UK advertising, far higher than in any other major market

The recession started to bite in H2 2008. As budgets are cut, display has been hit harder than search and classified, as a rising share of inventory (almost 50%) is sold by ad networks for discounted CPMs or on a performance-basis

Our revised forecast for internet advertising is for zero growth in 2009, with a low single digit rise in paid search offset by falls in display and classified

  • Google
Media, Internet 30 March 2009
H3G 2008 results: Italy drags the group down

H3G group’s H2 2008 results showed a 5% decline in revenue on a constant currency basis and a return to strongly negative underlying EBITDA, with a margin of -17% in H2 2008 and -8% for the year as a whole, versus a margin of -1% in 2007

The UK performed reasonably well, with 11% revenue growth and improving margins, albeit still being cashflow negative, but Italy suffered from an 18% revenue decline and falling margins

The company’s target of positive EBIT in 2009 looks very unlikely without contributions from some major accounting adjustments, and the consolidation move in Australia looks likely to be repeated elsewhere

  • Hutchison 3G
Telecoms, Mobile, Non-UK Telecoms 29 March 2009
Mobile revenue growth Dec 2008 quarter

Overall reported year-on-year growth for the top 5 markets recovered in the quarter to December after a significant fall in the previous quarter, rising from 0.2% to 0.8%

However this movement was entirely due to the improving regulatory landscape which reduced the negative impact on growth by 0.6ppts in the quarter, particularly due to less pressure on growth from last year’s roaming cuts, which we estimate reduced reported growth by 1.3ppts this quarter vs. 1.9ppts last quarter

Stripping out these negative influences, and our estimate of underlying service revenue growth for the quarter is flat at 2.2%

Telecoms, Mobile, Non-UK Telecoms 29 March 2009
UK DTV forecasts to 2018 March 2009 update

UK Digital TV (DTV) growth has finally started to slow significantly. By the end of 2008, 86% of TV homes and 91% of the population living in TV homes had DTV reception on one or more sets

Almost the only growth now is coming from the satellite sector, as Freeview digital terrestrial TV (DTT) reception reaches its upper limit prior to the full commencement of digital switchover (DSO) in spring 2009. This will see the digital technical household coverage of the main PSB channels extend from 80% to 98.5% by the completion of DSO in 2012. These forecasts update our previous forecasts issued in June 2008 (see UK DTV Homes to 2017 June update [2008-62])


Media, TV 27 March 2009
Copyright owners and ad-supported digital content models: more trouble brewing

Highlighting the challenges of the ad-supported digital music model, SpiralFrog, the first licensed service to launch in the US, collapsed recently in a sea of red ink and failed promises

Newly licensed ‘cloud’ jukeboxes like Spotify or We7 are struggling to make sense of the ad-supported model whose licensing costs far outweigh their potential revenue at present

Digital Britain’s proposed Digital Rights Agency could improve the licensing environment for cloud jukeboxes, but we expect copyright owners will take particular care to avoid substitution of music consumption from pay-for to ‘free’ (but ad-supported), unless the financial rewards are commensurate

Media, Music and Radio 26 March 2009
UK behavioural targeting: Google raises the ante

Google’s announcement that it will offer ‘interest-based’ advertising to key partners on YouTube and its AdSense publisher network from next month, with a wider rollout later this year, raises the ante for behavioural targeting

Targeting based on users’ activity on publisher websites has become widespread, but concerns over privacy have slowed deployment of technologies that track users’ entire click-stream activity on the internet, such as Phorm

Exponents believe that behavioural targeting will boost the market for internet display, which we estimate was worth £650 million in 2008. In our view, its main impact will be to accelerate the shift to performance-based pricing

  • Google
Media, Internet 24 March 2009
Revised offers at Virgin Media: light before the dawn?

We expect VMed to use the upgrading of its 2 Mbit/s broadband base to 10 Mbit/s as the basis for a de facto price increase

The resulting increase in revenue could be substantial, although growth in subsequent years is likely to be reduced by lower gross additions

We continue to expect cash flow performance in 2009 to be resilient but unspectacular. However, the prospects for double digit growth in subsequent years to 2012 are beginning to look more promising

  • Virgin Media
Fixed Line, Telecoms 17 March 2009
UK Commercial Radio Update

This report updates our ongoing coverage of the UK commercial radio sector (UK Commercial Radio Q2 2008 [2008-84]), and includes our latest revenue forecasts for the period 2009-2013 (Table 1)

In the context of a UK recession that is proving to be deeper and longer than official forecasts had anticipated in 2008, we have severely downgraded our advertising forecasts. We now anticipate that, following the 6.4% decline in 2008 to £560.2 million, commercial radio advertising revenues will decline by a further 14.6% in 2009, to £478.2 million (compared to the peak of £641 million reached in 2004)

Media, Music and Radio 13 March 2009
Further pain at Johnston Press

Johnston Press results for 2008 (calendar year) all too eloquently illustrate accelerating local media advertising decline, with property advertising down 10% in Q1 and 55% in Q4

Write-downs have forced Johnston to record losses of £429 million in the year and there is a very real threat that the publisher will breach its borrowing covenants in June 2009, or by the end of the year

While digital is highlighted as the only growth area for the group, we remain concerned that many local publishers are effectively accelerating their own decline by ‘doing too much too well’ in terms of digital news provision at the expense of the quality of their newspapers

Media, Press 13 March 2009
The Digital Dividend: made for mobile

Ofcom has reallocated its Digital Dividend spectrum, allowing the UK to fit in with plans for harmonised usage of the spectrum across Europe, resulting in most of the spectrum being made ‘mobile friendly’, and a little left for digital TV services

The revised plans provide a much improved platform for mobile services in a very attractive spectrum band, with European harmonisation providing the potential for standardised (i.e. cheap) equipment and handsets

On the downside, there will still be insufficient quantity of spectrum to satisfy demand from the mobile operators, with five operators chasing three decent blocks of spectrum, so the auction is likely to be very competitive

Telecoms, Mobile 12 March 2009
Canal+ FY 2008 results

Vivendi’s Canal+ Group overshot its 2008 EBITA target, despite sluggish subscription growth, delivering to shareholders some of the promised post-merger gains from “synergies” with TPS

For 2009, Vivendi has issued cautious revenue and EBITA guidance that, on current trends, will easily be met. However, management has now recognised that initial targets for 2010 will be “hard to reach” – as we have already warned

In the medium term, a further downside risk for Canal+ Group is the likely loss of exclusivity for the distribution of themed channels, which could be the outcome of the anti-trust investigation of CanalSat, with a ruling expected in 2009

  • Canal Plus
Media, TV, Non-UK Media 11 March 2009
Ofcom's statement on Next Generation Access: green light, red ink?

Ofcom’s statement on Next Generation Access (NGA) gives BT the maximum possible incentive to invest by allowing a high degree of pricing freedom and some short cuts to reduce implementation costs

But Ofcom cannot guarantee that BT will make a return from NGA, only the existence of an opportunity to make one

Ofcom’s statement is certainly positive for BT, but we remain sceptical of the business case for BT NGA, particularly given the low price of all-copper based offers and Virgin Media’s roll-out of 50 Mbit/s broadband

  • Vodafone
  • O2
  • BT
Telecoms, Fixed Line 6 March 2009