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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

For the second year running, 2014 has seen a steep year-on-year decline in total daily average viewing time, which fell by almost 5%, and was again, as in 2013, greatest among younger age demos, especially among children aged 4-15 where the decline reached double figures

Connectivity and the rapidly growing population of smartphones and tablets appear the main, though not the only, causes of a decline that appears general across the main PSB, PSB family and non-PSB channel groups. The decline nevertheless varies by channel genre, with the more youth oriented, such as Children and Music, feeling the connectivity squeeze the most

Whilst the great majority of non-PSB channels are only available on the pay-TV platforms, the DTT platform provides a significant audience and advertising contribution (ballpark estimate of £150-200 million per annum) to the relatively small group of leading free-to-air non-PSB channels, which are also less constrained in developing their online initiatives than the mixed advertising/subscription non-PSB channels on the pay-TV platforms

In 2014 Canal+’s core premium French pay-TV business has continued to lose subscribers and swallowed a VAT increase. But this was offset by growth in FTA ad sales, in ARPU, in overseas subscriptions and by acquisitions. EBITDA has continued the decline which commenced in 2013

Eleven years ago Canal+ in France and Sky in Britain had the same household penetration, but since then a gap has opened up and now Canal+ lags behind at 21% compared to Sky’s 34%. The French platform suffers from its regulated focus on films and its neglect of hardware

A deep revision of Canal+’s model is needed, through building a library of scripted series and a revamp of the consumer proposition to differentiate on quality and user experience. Building on recent initiatives, mediocre IPTV services should be bypassed by OTT bundles on fibre, and the satellite offering upgraded

The European mobile market had a rare quarter of solid improvement in Q3, with reported service revenue growth improving by over 2ppts to -4.7%, helped by a 1ppt improvement in regulated MTR cuts (which have now dropped to near zero) and a 1ppt improvement in underlying growth

The improvement appears largely driven by improved pricing trends, with the improvement in Italy particularly strong. However we feel that pricing is still in general in a fragile equilibrium, with the potential longer term structural improvements - consolidation and network focus - yet to be made

Consolidation has certainly progressed, but more in-market mobile deals need to be made, and while current levels of investment are encouraging, with accelerating data volume growth also encouraging, they will take some time to have an effect at the consumer level

One year on from the launch of the latest generation of gaming consoles Microsoft and Sony remain locked in a high stakes struggle for dominance of the gaming industry, and longer term viability of the console category.

Sony’s PS4, which we estimate outsold Microsoft’s Xbox One 3:1 in Q3, looks certain to win this round in a return to form for Sony following the relative disappointment of the PS3. Microsoft, struggling from missteps early in the Xbox One cycle, may have left it too late to catch up.

The wider games market continues to shift to mobile and online gaming, as developers seek to exploit the vast installed base of connected devices. New console gaming experiences from Steam and Amazon may be the primary growth driver for controller-based gameplay.

In 2014 Canal+’s core premium French pay-TV business has continued to lose subscribers and swallowed a VAT increase. But this was offset by growth in FTA ad sales, in ARPU, in overseas subscriptions and by acquisitions. EBITDA has continued the decline which commenced in 2013

Eleven years ago Canal+ in France and Sky in Britain had the same household penetration, but since then a gap has opened up and now Canal+ lags behind at 21% compared to Sky’s 34%. The French platform suffers from its regulated focus on films and its neglect of hardware

A deep revision of Canal+’s model is needed, through building a library of scripted series, and a revamp of the consumer proposition to differentiate on quality and user experience. Building on recent initiatives, mediocre IPTV services should be bypassed by OTT bundles on fibre, and the satellite offering upgraded

A merger between BT and EE would create a converged operator directly serving around half of the UK adult population with fixed broadband, mobile or both services

We remain sceptical of the direct benefits of quad play and cross-selling, but we can see the benefits of merging the largest fixed and mobile operators under a single brand, and the long term strategic sense of owning both networks in case converged service offerings do become more important

The implications for other market participants are mixed, with benefits in the short term from the distraction of a large merger, and perhaps some regulatory concessions, but a longer term threat from the enlarged brand, and BT having a much enlarged customer base over which to spread content costs