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The ‘big 4’ ISPs’ combined revenue remained in decline in Q4 2024 at -0.4%, partly due to a BT accounting quirk but mainly due to altnets gaining share
ARPU growth of 2% is roughly compensating for subscriber declines of 2%, but this ARPU growth is likely to weaken in 2025 as various boosts drop out
A recovery will come as the altnets slow in H2 2025 (if not before) due to their restrained expansion, which cannot come soon enough for the big ISPs
France’s Ligue 1 launched a D2C platform in the UK last year after failing to sell the rights – “a sign of weakness”, according to media commentator Claire Enders of Enders Analysis.
“Fairy godmothers don’t always show up. The tech companies have not shown up and it’s for a very good reason. The models are very difficult and painful and it takes years to build them up,” said Enders.
Claire Enders, the co-founder of Enders Analysis, a leading British research firm, was even more apocalyptic in her assessment of the piracy epidemic.
“We’ve had covid and a cost of living crisis in almost every market and that has led to incredible spikes in piracy,” she said. “It’s the number one problem in sport. It’s worth about 50 per cent of most markets and in India it’s more like 90 per cent.”
Enders believes that one of the reasons the Premier League’s media rights continue to grow in value is that the league, in partnership with its broadcast partners, police and Britain’s leading internet service providers, has been much tougher on piracy than its counterparts elsewhere.
She was particularly scathing about French football’s decision to ditch its long-term broadcast partner Canal+ in 2020 and described Italy’s efforts to fight piracy as “slack”.
With the formation of Vodafone3, we envisage continued intense competition at the low end of the mobile market, a ramping up of pressure at the top end over time, and some opportunities in the short term.
New information on spectrum trading confirms the view that BT/EE will be most capacity constrained, but with various strategic options available to it.
Expected EBITDA growth of 9% p.a. at Vodafone3 would allow Vodafone Group to almost double its excess FCF. Budgeting for buying CK Hutchison’s stake, however, may curtail Vodafone’s spending over the coming years.
VMO2 had another mixed quarter to end a difficult 2024, with revenue growth improving but EBITDA growth falling, and other metrics mixed at best.
The company hopes to put this behind it with guidance for both revenue and EBITDA growth in 2025, a tough ask given current momentum.
Ultimately achieving or exceeding this may depend on altnet pressure receding, which we expect it to do, but perhaps more towards the end of the year than the beginning.
Claire Enders, who has studied the Murdoch empire for 40 years, is among many analysts who see little logic in the recent developments. “As a business analyst, I don’t see what the purpose was. I don’t see what they’re in such great disagreement about, since they’ve all contributed hugely to the value created since the nadir of the company only 13 years ago.”
Enders said: “You wouldn’t even be able to put a valuation on those companies [the UK newspapers] because of the rules in place on foreign ownership.” While the radio assets are admired, the company moved its upstart news channel TalkTV because of losses.
The requirement for accurate audience measurement led to the creation of separate industry JICs— developed by media owners, agencies, advertisers and trade bodies—used for planning and as credible trading currencies.
However, now as brand advertisers need to be able to optimise campaigns across all audiovisual—and ideally all display—they want full cross-media measurement, and are therefore investing in the Origin platform.
But not all ‘views’ are equal; context is important. While most advertisers understand this, there is a risk that some ascribe the same value to all AV. Broadcasters are understandably wary.
“[Under the Broccolis] they were very restrained and disciplined about what they were producing, but you’d think the opposite is going to happen now,” said Tom Harrington, head of television for the research service Enders Analysis. “Amazon spent a lot of money on this and they’ll want more content for it.”
Telcos are increasingly developing APIs to share selected network data with third parties, with the goal of supporting useful end-user applications.
Capabilities are still nascent, but the potential is real. Telcos need to adopt a pragmatic approach that looks to match API capabilities to useful products, and build increasing scale over time.
Security is the largest near-term opportunity for API products, but AI is the key emerging area, with telcos potentially able to play an ambitious role in providing APIs to help manage the growth of autonomous AI agents.